Yahoo Finance Textile Recycler Renewcell Finds Buyer Following Bankruptcy
PARIS — Embattled cotton textile-to-textile recycler Renewcell has found a buyer, following its bankruptcy in February.
The company has been acquired by investment banking firm Altor, which will rename the company after its core product Circulose. Altor will acquire the Renewcell assets, including its factory in Sweden.
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Altor intends to safeguard the patented Circulose product, which is a fiber pulp made from textile waste.
“We extend our deepest gratitude to our customers, partners and stakeholders for their unwavering support and collaboration during this journey,” said Circulose chief executive officer Magnus Lundmark. “Together, we will continue to drive positive change, leveraging Altor’s expertise and resources to enhance our capabilities and secure a confident future for Circulose and the broader textile community.”
Renewcell declared bankruptcy following consecutive quarters of slow sales and repeated appeals to brands to step up to the sustainability plate and purchase its product.
Its full-scale factory went online in November 2022, with a capacity to produce about 60,000 tons of pulp annually, and a target of 360,000 tons a year by 2030.
The company produced 6,498 tons of its pulp product in the third quarter, with nearly all of it being sold, which was about half of what the company needed to sell to reach a breakeven point. By the end of 2023, the company produced 2,043 tons of the fiber, but only delivered 129 tons to customers.
“[Circulose] will remain at the forefront to create a sustainable future for the fashion and textile industry. This commitment to innovation and sustainability is further strengthened by Altor’s investment, which provides the resources and network needed to scale Circulose’s impact and reach,” the company said in a statement.
It assured existing partners that the supply chain will not be disrupted.
In October 2023, Zara parent company Inditex agreed to acquire 2,000 tons of material made with Circulose through its Hong Kong-based fiber producer Tangshan Sanyou, which had an existing offtake agreement with Renewcell for Circulose pulp.
In 2017, H&M Group became an early investor in Renewcell and took a minority stake in the company. The fast-fashion behemoth introduced garments made with the Circulose material in its spring 2020 collection. H&M committed to scale up the use of the material across its brands over five years.
“We don’t shy away from a challenge and this one is worth taking, both for the uniqueness of the patented technology and the urgency of scaling circular solutions for the entire textile and fashion industry, particularly to replace virgin cotton and [man-made circulosic fibers]. We are determined to partner with key stakeholders across the value chain to together unlock the potential of Circulose,” said Altor principal Clara Zverina.
Industry organization Canopy had rallied brands following Renewcell’s bankruptcy, enlisting 30 companies, including Mango and Zalando, to sign letters of intent to purchase Circulose to support the company, and working to align brands on material blends to optimize the supply chain.
“We were confident that the phoenix would rise from the ashes,” said Canopy executive director Nicole Rycroft. “The fashion value chain is now better primed to ensure these innovations have an easier path to market and scale. We are excited that Altor’s investment in Circulose provides all of us with a second chance.”
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