The inventory crisis that now faces the garment trade adds to a litany of well-known sustainability issues. Some brands are leading calls for a radical new approach. Angeli Mehta reports
As with many other sectors of the economy, the question now being asked of the fashion industry is whether Covid-19 will provide the shock to the system so desperately needed to force a rethink of unsustainably rapid growth.
With retail shops shuttered by lockdowns, and precipitous declines even in online sales as consumer spending switched to necessities, the average market capitalisation of apparel, fashion and luxury brands dropped almost 40% in the year to the end of March, according to McKinsey, which expects “a large number” of global fashion companies to go bankrupt in the next 12 to 18 months.
The inventory crisis that now faces the industry, as it grapples with disposing of mountains of unsold stock, merely exacerbates a litany of well-known problems: long, complex supply chains that span the globe; a high carbon footprint and heavy consumption of water and chemicals; a rapid expansion in production which has led to unwanted clothing dumped in Africa, to the detriment of local production.
Above all we understood we went way too far. Our reckless actions have burned the house we live in
In 2016, WRAP estimated the fashion industry global supply chain waste was 800,000 tonnes, even before any clothing reached the consumer. In the UK alone that year 300,000 tonnes of clothing went to landfill. And as clothes buying has accelerated, our clothes are in use for less time.
Despite growing recognition in recent years of the fundamental shift that’s needed, the industry as a whole has moved only slowly, with little progress on broad sustainability targets.
Then came the pandemic. As May drew to a close, Gucci – one of the industry’s most influential labels – announced it was going to take a “seasonless” approach to collections, one that would decrease output and increase sustainability.
“Above all we understood we went way too far. Our reckless actions have burned the house we live in,” its creative director Alessandro Michele wrote in his lockdown diary.
Gucci’s parent, Kering, told Ethical Corporation that its sustainability teams were hard at work focusing on the group’s 2025 sustainability targets.
Gucci’s announcement followed an open letter from more than 500 figures from across the global fashion industry outlining steps to become more responsible: “We agreed that the current environment, although challenging, presents an opportunity for a fundamental and welcome change that will simplify our businesses, making them more environmentally and socially sustainable and ultimately align them more closely with customers’ needs.”
At the fast fashion end of the industry there have been no visible signs of a rethink on the pile them high, sell them cheap business model
The signatories said they would work to increase sustainability throughout the supply chain and sale calendar by producing fewer unnecessary products, less waste in fabrics and inventory, and travelling less. It’s a welcome commitment from an industry that accounts for 10% of global carbon emissions.
At the fast fashion end of the industry, however, there have been no visible signs of a rethink on the pile them high, sell them cheap business model. The more immediate talk is of heavy discounting to shift unsold stock, and brands unwilling to pay what they owed garment workers for goods already made but not delivered.
McKinsey’s survey of North American and western European sourcing executives reveals not all brands are taking steps to support their supplier base. And only 19% are providing pre-payment for orders, even though 64% of respondents said this action would have a significant impact. (See Millions of garment workers face destitution as fashion brands cancel orders) H&M was one of the first to undertake to pay its suppliers and says it will “work in collaboration to promote the establishment of sustainable systems of social protection.”
“When we look at the crisis, it shows the limit of the current model and how fragile global supply chains are and the lack of resilience that exists. As we look at rebuilding, there are a lot of questions for the industry – do we go back to normal, or do we explore an alternative?” asks Francois Souchet who leads the Make Fashion Circular initiative at the Ellen MacArthur Foundation.
“The climate crisis is not going away. Companies will still have to find answers to this, while creating recovery – and the circular economy offers that alternative.”
A survey of sourcing executives conducted in April by McKinsey indicates they now expect a shift to a more flexible, demand-driven and sustainable model.
Moreover, it suggests the pandemic has increased consumer interest in sustainability: a survey of consumers carried out in Europe and the US in March suggested 20% of them want to support local business, and in Europe 16% said they’d be buying more socially and ecologically sustainable clothing in future.
Companies with a focus on innovation and sustainability will emerge from this crisis all the more strongly
Consumers have also taken note of efforts by brands to look after their employees, contributing items like PPE, or donating to their communities. A study by the Boston Consulting Group, the Sustainable Apparel Coalition and Higg Co says more sustainable business practices will get the industry through the current crisis, and urges firms to meet supply chain obligations.
Katrin Ley, managing director of the Dutch sustainability initiative Fashion For Good, says: “Companies with a focus on innovation and sustainability are more prepared to meet the challenges ahead and will emerge from this crisis all the more strongly.”
She sees the crisis as presenting “an opportunity to re-evaluate practices, better plan, streamline and coordinate our efforts to maintain the momentum we have achieved, and to ensure our efforts remain on track once we are on the other side of this.”
Not surprisingly, many companies have slowed down on sustainability actions. “They’ve had to focus on navigating the crisis – surviving – and that probably delayed some actions. But a lot of companies we’re working with will resume as soon as they can,” says Souchet of Ellen MacArthur Foundation.
As an example, he points to the ongoing Jeans Redesign initiative. Last year, more than 40 companies signed up to principles on best practice across garment durability, fibre and chemical use, and recyclability. Signatories include Bestseller, C&A, GAP, Guess, H&M and Tommy Hilfiger.
The target is for jeans to be on the market before May next year, with some still pledging to deliver this autumn. Moreover, 17 new mills and brands, including Banana Republic and Wrangler, signed up in April, despite the disruption of Covid-19, an encouraging step in the beginnings of a more circular economy.
Companies are afraid that if they change just one product that might open them to more criticism than if they do nothing
Over the past two years, Souchet reports a lot more appetite for the conversation, but also fear: “A lot of companies are interested … but they really don’t know where or how to start. And if they do, they’re afraid that if they change just one product that might open them to more criticism than if they do nothing. That’s the next frontier.”
Before the pandemic, there were already innovations around made-to-order and new types of supply chains. More companies were exploring lending, resale and refurbishment. US resale platform ThredUP had expected the second-hand market would more than double by 2023 compared with 2018. It estimated the resale market was growing 21 times faster than the retail apparel market.
China’s YCloset has 15 million subscribers who pay a monthly fee and can buy an item after they’ve rented it. Last December, H&M said it would test the waters with one of its brands, and launched its first rental service for festive gowns.
“The circular economy will create different jobs: if you think about improving clothing utilisation, reselling, renting – and on top of that, the sorting, collection and end-of-use solutions. If you include that in the thinking, the circular economy could potentially benefit people in different geographies,” Souchet suggests. These could perhaps provide an alternative if the predictions of re-shoring and shortening supply chains are realised.
So perhaps a brighter future beckons. But right now, this crisis leaves retailers and brands with huge amounts of unsold stock, with heavy discounting expected once businesses re-open. Caroline Rush, chief executive of the British Fashion Council, told Euronews Now that fashion designers should have to consider recycling this excess stock “so that the product we have is re-used, shredded, goes back into new yarns and created for the future”.
If they don’t, even more pressure will be put on the recycling end of the chain, already struggling to cope with the huge volumes of clothing consumers discard every year.
Since lockdown, the value of goods collected through textile banks has plummeted from £130/tonne in March, to an average of £30
The Textile Recycling Association fears that unsold stock will take the place of secondhand clothing in many markets in eastern Europe. With Covid-19, the main markets for used clothing and textiles in Africa have closed, with Kenya – one of the biggest takers of UK textiles – banning imports until further notice.
The association anticipates an influx of second-hand clothing (cleared out by a nation under lockdown) once charity shops and recycling sites open again. Since the lockdown, the value of goods collected through textile banks has plummeted from £130/tonne in March, to an average of just £30.
With prices tumbling, and export markets closed, it fears there may be nowhere for clothes to go other than energy-from-waste incineration.
Proof, if any were needed, that the industry and its consumers really do need to change their ways.
Angeli Mehta is a former BBC current affairs producer, with a research PhD. She now writes about science, and has a particular interest in the environment and sustainability. @AngeliMehta.
Main picture credit: Nacho Doce/Reuters
This article is part of our in-depth Circular Economy briefing. See also:
WRAP Gucci fast fashion H&M Kering Make Fashion Circular Initiative Fashion for Good Ellen Macarthur Foundation ThredUP YCloset Textile Recycling Association