Swedish company Renewcell, in which the H&M group is one of the main shareholders, announced on February 25 that it would be filing for bankruptcy with the Stockholm court. Renewcell was founded in 2012 and specialises in recycling clothing to produce new fibres, in particular a yarn called Circulose, which is used by major fashion groups around the world. Notably H&M, but also Bestseller, Tommy Hilfiger and Ganni.
Renewcell’s management says in a statement that the decision was taken because it was unable to secure sufficient liquidity to implement the strategic restructuring announced in November 2023. The company says it has “conducted advanced negotiations with its two main shareholders, H&M and Girindus, with its existing lenders BNP Paribas, the European Investment Bank, Finnvera, Nordea, and AB Svensk Exportkredit as well as with potential new investors regarding long-term financing solutions”. But to no avail.
The company blames the sluggishness of the clothing market. “This is a sad day for the environment, for our employees, for our shareholders and our other stakeholders. It is a testament to the fashion industry’s lack of leadership and adaptation to change,” said Renewcell Chairman Michael Berg.
Last November, the company was already pointing out how slow brands were to turn to recycled fibres, and saying that it was experiencing a drop in orders from clothing manufacturers who were devoting only a small part of their offer to more sustainable materials. Renewcell had opened a dedicated recycling plant in Sundsvall in 2022, aiming for high capacity and profitability, which it has not managed to achieve.
Renewcell had also formed partnerships with other upstream specialists in the fashion industry, in particular with the Austrian wood pulp-based materials specialist Lenzing. Lenzing announced in 2022 that it had ordered 80,000 to 100,000 tonnes of Circulose over five years to supply its own production of Tencel and Ecovero fibres.
