The bankruptcy announcement came as a significant blow to the sustainable fashion movement, as Renewcell had established partnerships with major fashion brands such as H&M, PVH, and Levi’s®. These collaborations aimed to replace virgin materials like cotton and wood pulp with Circulose®, Renewcell’s recycled material that can be reused multiple times without quality loss.
The textile process on the website describes it as, “CIRCULOSE® is a branded dissolving pulp that we make from 100% textile waste, such as worn-out jeans and production scraps. Fiber producers use dissolving pulp to make viscose, lyocell, modal, acetate other kinds of biodegradable regenerated fibers (also called man-made cellulosic fibers).”
“These fibers are then spun into yarns, woven or knitted into fabrics and finally cut and sewn into new high-quality textile products.”
:The only difference with Circulose® is that they are made from textile waste instead of new cotton, oil or wood.”
H&M, in particular, had been a key partner and investor in Renewcell since 2017 and even held a 10.37% stake in the company. H&M’s commitment to sustainability includes a goal to use only recycled or other more sustainable materials by 2030, and the partnership with Renewcell was a step towards achieving this target.
Despite securing 100 million Swedish krona (approximately $9.8 million) in short-term funding from top shareholders including H&M and Girindus’s incubator arm Girincubator in December 2023, Renewcell cautioned that these funds were merely a stopgap solution. The financial challenges persisted, and the company’s Q3 earnings report showed a net loss of 94.5 million Swedish krona, following a Q2 2023 net loss of 105.4 million Swedish krona.
The bankruptcy of Renewcell is not only a setback for the company’s employees, shareholders, and stakeholders but also highlights the broader challenges faced by the fashion industry in transitioning to more sustainable practices.
