Renewcell Fielding ‘Multiple’ Potential Buyers Post-Bankruptcy
Renewcell isn’t on the chopping block just yet.
The embattled Swedish textile recycler received “multiple” bids for its business and assets ahead of the March 28 deadline, bankruptcy administrator Lars-Henrik Andersson confirmed Thursday.
More from Sourcing Journal
The offers will undergo a “thorough review process,” with a final closing expected sometime in mid-April, Andersson said.
Until then the Circulose manufacturer, which creates pulp that can be dissolved to produce man-made cellulosic fibers such as lyocell, viscose, modal and acetate, remains mired in a holding pattern. The outlook remains uncertain: The brand could emerge from the process intact but with a new owner or it could be dismantled and sold for parts.
Among the pieces up for grabs is the Renewcell 1 plant, which became the world’s first industrial-scale textile-to-textile recycling facility when it opened on the site of a former paper mill, leased from Europe’s largest private owner of forest land, in August 2022. Located in the sun-drenched coastal city of Sundsvall, a scenic three-and-a-half-hour train ride north of Stockholm, it was so named because it was supposed to be a blueprint for others to come. Renewcell 1 could handle waste from Europe, while a Renewcell 2 or 3 in North America or South Asia could wrestle with castoffs from those markets, reducing the costs and pollution of long-distance transportation.
Renewcell 1 had an annual capacity of 60,000 metric tons. The company had expressed hopes that it could pump out more than 1 million metric tons of Circulose every year by 2030. The concept was revolutionary in an industry replete with lab and pilot-scale initiatives. Here was a solution that could not only reduce viscose production’s reliance on felling trees but also deal with fashion’s prodigious waste problem in a meaningful way. According to the Ellen MacArthur Foundation, less than 1 percent of old clothing is recycled into new garments. The overwhelming majority is downcycled into rags and upholstery stuffing, landfilled, incinerated or left to rot along the beaches of Accra in Ghana or on the sands of Chile’s Atacama Desert.
There has been no shortage of explanations for Renewcell’s sudden—if not completely unanticipated—collapse. It went public too quickly. The fiber was too expensive. Brands and retailers weren’t ponying up the solid offtake agreements that it so desperately needed. The supply chain was much too impatient for a quick and easy fix. A macroeconomic climate riddled with geopolitical conflict and uncertainty made everyone extra-leery of risk. What’s clear, however, is that when H&M Group, Renewcell’s largest shareholder, decided that it could no longer shoulder the brunt of the investment burden—and no one else was willing to commit more cash—the writing was on the wall.
When asked in a text message who might be biting, Tricia Carey, Renewcell’s chief commercial officer until the end of the month and one of the last employees standing, responded with an emoji of a face with a zippered-up mouth. She’s grateful, however, for the outpouring of support the firm has received, including from the Circulose Supplier Network of fiber producers, which have enough of the pulp for the next 18 to 24 months. The Circulose name is trademarked until at least 2028, or 2030 in some countries.
“As a group of spinners, knitters, weavers and garment makers, we understand that climate change is a major challenge that we must all take seriously,” Circulose Supplier Network members such as Kipas Holdings, Prosperity Textile and Karacasu Tekstil wrote in a joint letter recently. “Renewcell has been a key player in this effort, and we believe that they are a company worth saving. Since joining the Circulose Supplier Network, we have all made significant efforts to support Renewcell and their mission. We are committed to doing even more to help them succeed.”
All of which is to say is that even if this is goodbye, it’ll be a long one. H&M recently released a line of printed maxi dresses made with Circulose, while Ganni is feting a “Future Denim” frock. Simons in Canada just unveiled a collection of Breton stripe tops, denim jackets and wide-legged jeans. Reformation, the epitome of It-girl cool, has a range coming up in June. Other collaborations are likewise still in the hopper.
“Appreciate all the support from the Renewcell team, Canopy, Fashion for Good, Accelerating Circularity, Circulose Supplier Network partners and brands over the past months,” Carey said. “We know circular solutions can only scale when working together.”
Writing on LinkedIn on Thursday, author and Bloomberg columnist Adam Minter, who has been writing about waste and recycling since 2000, said he was certain that while Renewcell was the first, it won’t be the last.
“I suspect that the second, third and fourth iterations will learn from what didn’t work,” he said. “Along the way, they’ll be helped by growing consumer demand for sustainable apparel, and—above all—the increasingly desperate PR straits in which global apparel brands find themselves. Renewcell didn’t work, but they still need a Renewcell. The next iteration will likely have a better cost structure, won’t be ramping up just as Russia invades a European country and will be funded in part by folks who understand what went wrong the first time.”
Renewcell may be dead, in other words. But also long live Renewcell.
