When Chloe Songer and Stuart Ahlum launched shoe brand Thousand Fell shortly before the pandemic, they wanted to prove that it was possible to recycle their shoes again and again – and make a profit, too.
Their vision was, if not quite mainstream, at the heart of environmental activists’ advocacy for circular fashion – the idea that the industry could reorient itself around products that are made, bought, recycled, remade and resold while consuming the fewer new resources possible. .
It was even more difficult than they had thought.
“Transforming old sneakers into new sneakers is expensive; it’s not cost effective and it’s not scalable,” Songer said.
The problem wasn’t with the design of their shoes, or consumers who couldn’t be bothered to return worn-out pairs (this was solved by a $20 “recycling deposit” that customers got back when they returned their sneakers).
The trickiest problem was much more mundane: shipping. Recyclers and sneaker manufacturers are set up to transport bulk materials around the world. Thousand Fell’s approach was much more expensive, costing up to $13 just to smuggle a pair of sneakers from a customer’s home to a recycler. A bespoke recycling program to deal with each pair as it cost over $7 for each set of shoes.
As Ahlum and Songer grappled with these issues, Thousand Fell became a testing ground for a bigger goal. While the brand continues to operate – and has been profitable for the past nine months – it is now part of a larger venture, called SuperCircle, aimed at solving the challenge of moving old clothes from consumers’ wardrobes into the recycling system.
Fashion’s holy grail sustainability solution
The company is betting on a broader move towards a more circular fashion system.
Brands have embraced the concept because it offers them a holy grail solution that at least partially dismisses the suggestion that the industry should simply slow down and produce less in order to reduce its environmental impact. Regulators in Europe have made circularity a keystone of their strategy for the industry, while consumers, bombarded with images of old jeans, tattered t-shirts and tired trainers piled up in landfills, seek responsible ways to dispose of their old clothes.
It’s the not very sexy and not very public gap in the landscape of circularity.
Companies such as H&M Group, Inditex, owner of Zara, and Ralph Lauren have invested in textile recycling solutions which are beginning to grow. By the end of the decade, almost 30% of post-consumer textile waste in Europe could be transformed into valuable raw materials, compared to less than 1% today, according to a report published last month by the consultancy McKinsey & Co.
But relatively little attention has been paid to the logistical challenge that SuperCircle aims to overcome. This gap is “the most significant challenge” to scaling emerging recycling solutions, according to the McKinsey report.
At present, only a fraction of old clothes are even collected – most go into the trash and are simply burned or sent to landfill. Most of what comes back into the system through brand-backed take-back programs or charitable donations is exported to places like Chile and Ghana to be resold. Much of it is of such poor quality that it simply ends up in landfill at its final destination.
Garments that are not marked for resale still need to be carefully sorted to meet the requirements of recycling systems, which often can only handle a specific fiber type or blend. Currently, sorting discarded clothing is a largely manual and expensive process, followed by more labor to remove items such as zippers and buttons. And recyclers want bulk volumes, which means brands can’t return clothes or shoes one at a time.
“It’s the not-so-sexy, not-too-public gap in the circularity landscape,” said Kathleen Talbot, chief sustainability officer at Reformation, SuperCircle’s first brand partner. “How do you actually collect these things, and how do you consolidate and manage the logistics and connect post-consumer returns to these recycling partners?”
SuperCircle’s proposal is to digitize this process as much as possible. Its technology and logistics platform supports the brands’ consumer apparel take-back programs and connects to their returns process to eliminate inventory that cannot be resold to recycling partners. Brands get transparency on the destination of their old clothes and data on the associated environmental savings.
The company raised $4.2 million in a funding round earlier this year from investors including Wireframe Ventures and Capital One. The platform went live in May and is on track to have over 10 brand partners on board by the end of the year. Next year, his goal is to add at least 30 more.
Fashion’s new last mile
The logistical problem is similar in complexity to the “last mile” challenge of shipping online orders from warehouses to individual consumers’ doorsteps. Moving old clothes from closets to recyclers means reverse engineering this process with additional layers of analysis, sorting and data processing.
SuperCircle builds on a decade of innovation to make this element of delivery and return more efficient.
For consumers, the company’s take-back service is a lot like processing an online return. To recycle a pair of old Reformation jeans, for example, shoppers register on the brand’s website, where they can choose from a range of options that also include resale and repair. Potential recyclers select the type of garment they would like to return (at this time, Reformation’s service is limited to branded denim, sweaters, shoes and sportswear, garments that can be transformed into the new material ) and when it was purchased. They then receive a printable shipping label or QR code, which can be used to return the items in-store or at one of 14,000 take-back locations across the United States. As a bonus, users can earn up to $25 in store credit for returning their used clothes.
The logistical problem is similar in complexity to the “last mile” challenge.
If the original purchase was made online, SuperCircle syncs with users’ order history to get more details about each product. The goal is to extract data on the material composition of each item to reduce the need for manual sorting. For returns that are unidentifiable or bulk returns that are not tied to a specific brand, SuperCircle is investigating emerging infrared sorting technologies to help mitigate this issue. Each shipment is digitally tagged to facilitate its delivery to the correct destination and ensure traceability of marks.
The company has 12 different recycling partners in the United States and a handful in Europe and Latin America. It ships aggregate bales of waste from customers approximately once a month or once a quarter, depending on volumes.
This has led to real cost savings: most logistics providers are set up to deliver products to customers as quickly as possible, and even returns are geared to speed, so unwanted products have a chance to get back to customers. shelves before the end of their sales cycle. Garments destined for recycling do not face this kind of time pressure, which opens up the possibility of slowing down, optimizing and consolidating shipments to reduce prices.
“On execution, everyone wants two-day deliveries,” Ahlum said. “We reverse-engineered it so that speed isn’t the factor, it’s cost and the environment.”
Build a business model
SuperCircle leans into a white space that exists because textile-to-textile recycling solutions are just beginning to develop. Until now, companies had little incentive to try to solve the complex logistics involved. Efforts to address this play against existing markets for second-hand exports and downcycling.
“It’s a tough conversation when you’re trying to present [a brand] spend $50,000 to recycle inventory with us, or burn [it and get a tax write-off] or sell it for 80 cents apiece,” Songer said.
Regulations and incentives to encourage recycling could help. So does a crackdown on greenwashing that increases pressure on brands to actually support sustainability claims. Recycling programs and circularity claims are particularly targeted because so little clothing is actually recycled.
“There’s a bit of this black box,” Talbot of Reformation said. “Many of us are very sensitive to the fact that a large part of these products are exported.”
In addition to its logistics offer, SuperCircle aims to give brands visibility on what happens to their end-of-life products and the associated environmental impact.
“This will be the next frontier of assurances and reporting on ‘Where are these things actually going?’,” Talbot of Reformation said. “It’s not only relevant, but really essential for brands to take seriously.”
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