H&M Move Into Textile-Sorting Could Be Huge Boost For Circular Economy

The circular economy, recycling, reuse, rental-over-ownership. It’s the buzz for 2023 and the movement picked up yet more momentum today, courtesy of global fast fashion retailer H&M.

Its move into the business of textile-sorting via a venture to deal with waste in the fashion industry, represents a potentially very significant step.

It’s also the company’s biggest announcement after a raft of initiatives aimed at reversing the environmental damage for which fast fashion is a prime culprit.

The latest step has seen the Swedish giant create a joint venture with recycling company Remondis, with the aim of extending the life of about 40 million garments this year alone.

The business is called Looper Textile Co. — a nod no doubt to the Looop system that it created in a Stockholm store to regenerate new garments from old — and will collect used and unwanted apparel for resell to second-hand fashion companies and the recycling industry.

“What we are doing is taking unsorted waste and transforming it into something usable,” Looper Textile Chief Executive Officer Emily Bolon told Bloomberg.

Looper Textile Plans

The plans is for Looper Textile to collect garments from municipal containers across Europe, alongside H&M’s own in-store collection program, which it put in place back in 2013.

The company reckons that up to 60% of items will be suited for resale, distributed via a network of companies online, across off-price second-hand chains in Eastern Europe and through importers in Africa.

Around one-third of apparel will go to recycling plants to be ‘downcycled’, predominantly into auto insulation or sofa stuffing, while the remaining approximately 5% of garments unfit for reuse or recycling will be incinerated for power, Bolon said.

Globally only about a third of unwanted apparel is collected, according to consultancy McKinsey & Co., and of those less than 1% is recycled into new fashions, according to the U.K. non-profit Ellen MacArthur Foundation.

H&M has been spearheading a number of sustainability campaigns. In January Roblox and H&M launched an ‘immersive gaming experience’ called Looptopia, which allows players to experiment with materials and patterns and create virtual garments for their avatar. It also includes social interaction, clothes trading and styling sessions.

In 2019 H&M launched a rental service in Stockholm for selected outfits from its Conscious Exclusive collection and in 2020 debuted a Looop machine for a store in the same city allowing consumers to have old garments repurposed.

Last summer H&M introduced denim range made from textile fibers using recycled materials and launched a joint makers initiative with IKEA to showcase local creatives at the Livat shopping center in west London.

H&M Results Hit

The moves come at a time when H&M has been hit by high apparel prices and the cost of exiting its Russian business.

In January, the group reported net sales for the three months to Nov. 30 2022 up 10% to $5.9 billion year-on-year despite store closures in China and Russia. Net sales for the full year between Dec. 1 2021 and Nov. 30 2022 increased by 12% year-on-year to $21.4 billion.

“Our decision to wind down the business in Russia has had a significant negative impact on our results,” Chief Executive Helena Helmersson said of the results.

“Rather than passing on the full cost to our customers, we chose to strengthen our market position further. The hikes in raw materials and freight costs combined with a historically strong U.S. dollar resulted in extensive cost increases for purchases of goods,” she added.

Indeed, its withdrawal from Russia and a cost-cutting program cost the business almost $252 million and the group closed 336 stores worldwide, including 175 in Russia and Belarus, in 2022.

However, the company is more upbeat about 2023, with sales up 5% in the most recent December-January period.