Renewcell Bankruptcy: What It Means for Circular Fashion

Renewcell bankruptcy has become one of the fashion industry’s biggest sustainability wake-up calls. Once viewed as a breakthrough company in textile-to-textile recycling, Renewcell represented the future of circular fashion before its sudden collapse exposed deeper problems within the industry.

In February, Renewcell filed for bankruptcy after a series of setbacks including warehouse fires, declining share prices, and halted sales of its flagship Circulose pulp material. The Renewcell bankruptcy shocked many across the sustainable fashion sector because the company had been widely promoted as a breakthrough solution for textile-to-textile recycling and circular manufacturing.

In case you missed it, Renewcell was known for transforming textile waste into new textiles through its Circulose material, a viscose fibre created from recycled cotton textile waste. The company quickly became one of the most visible innovators within circular fashion, attracting attention from major global brands and sustainability advocates alike.

We previously explored Circulose and the rise of next-generation fashion materials in an earlier Scarlet Destiny article. We’ve analysed this new-gen material in one of our previous articles, which you can check out here.

Unfortunately, Renewcell's situation is not the only demise in the new-gen textile industry. In 2023, Bolt Threads, a US-based startup known for its mushroom-based leather alternative Mylo - which we’ve also talked about here - and supported by major brands like Adidas, Stella McCartney and Lululemon, paused production indefinitely due to funding challenges. Similarly, The Restory, a circular fashion service that collaborated with luxury retailers such as Selfridges and Harrods, faced unexpected liquidation after its co-founders left the business in March 2023.

These losses in the sustainable fashion industry have caused significant issues, and as a consequence, there’s criticism starting towards the fashion industry for not aligning actions with words. In fact, H&M Group, after incorporating Renewcell's Circulose in their SS20 collection, pledged to expand the material's usage across its brands within five years, which didn’t happen. In October 2023, Inditex, the parent company of Zara, announced intentions to purchase the initial 2k tonnes of recycled cotton waste from Renewcell. Despite these companies’ announcements, Renewcell admitted that they received no orders at all, showcasing a lack of support from the industry itself. The Renewcell circular fashion crisis exposed how many brands continue to market sustainability ambitions without committing to large-scale implementation. The Renewcell bankruptcy also intensified criticism toward major fashion brands accused of promoting sustainability publicly while failing to financially support material innovation at scale.

With this limited financial help from the industry, the only option for Renewcell is to go bankrupt, of course. Now, the fashion industry is under scrutiny again for promising but not delivering on crucial goals like emission reductions, fair wages, and waste reduction. As fast fashion brands introduce sustainable materials in small, one-time collections without scaling up usage, they’re actually hindering the progress of sustainable manufacturing and cutting-edge materials from becoming mainstream, while securing themselves the “sustainable” label in the consumers’ common conceptions. These actions only confirm what we all already know to be greenwashing from brands such as H&M, Stradivarious, Zara, etc.

Assessing the future of new-gen materials, just like we have done for Mylo and Circulose, and their longevity poses a bit of a challenge now. From the demise of these two, the key lesson is to be patient and acknowledge that transitioning to a non-toxic material world may take time, not just a few years or months. The commitment to transparency, regulations, and corporate responsibility is still lacking, hindering the much needed progress towards a sustainable system. Renewcell's narrative should motivate the fashion industry to act collectively. Bridging the innovation gap and creating a business environment where sustainability is not just a moral duty but also a strategic commercial necessity is crucial. This involves forming solid, enduring partnerships with these new-gen materials innovators. These companies, on the other hand, should scrutinise their supporters and their motivations, ensuring their alignment to the future of the industry. If not, it may not be worthwhile. We’re now seeing H&M backing a company that will provide a textile-to-textile circular polyester called Syre, but is this just another ticking clock until this new-gen material finds its demise?!

The Renewcell circular fashion crisis exposed how many brands continue to market sustainability ambitions without committing to large-scale implementation. Ultimately, the Renewcell bankruptcy reveals how fragile sustainable innovation can become when long-term industry commitment is replaced by short-term sustainability marketing.

Explore more from Scarlet Destiny:

Circular fashion explained

The future of textile recycling

Why greenwashing still dominates fashion

Next-generation sustainable materials

Because sustainability cannot survive on branding alone.

[information sourced on draperonline.com and futurevvorld.com

All images sourced on canva.com]