Shein Partners With Queen of Raw to Source Deadstock Fabrics

One million yards. That’s how much Stephanie Benedetto, the “queen” of online deadstock marketplace Queen of Raw, estimated would make Shein a clear “global leader” in rescuing the fashion industry’s production leftovers.

So 1 million yards it was, said Caitrin Watson, Shein’s director of sustainability. Watson became acquainted with Benedetto when she was sourcing fabric at Lafayette 148 New York. From the get-go, Watson was a fan of Queen of Raw’s mission of keeping pre-consumer castoffs from the landfill. And what better way for Shein to participate in the circular economy than making products out of materials that already exist?

More from Sourcing Journal

“It just makes sense. It’s already sitting there,” she said. “Ultimately, the biggest waste is if you can’t use the materials that have gone all the way through the supply chain.”

The number, enough to pump out up to 1 million of the e-tail titan’s crocheted tank tops, backless sundresses and halter-neck bodysuits, many of them less than $10 apiece, is a “stake in the ground,” Watson said. The plan is to make good on the target by 2025 at the very latest. After that, there could be an annual commitment. Or maybe another clothing retailer decides to snap up even more deadstock, spurring Shein to “raise our bar,” she said.

Benedetto calls Materia MX, the proprietary software it developed to matchmake sellers and buyers of deadstock materials, the “ERP of excess.”

“We’re trademarking that,” she said with a laugh. “It is just that—it is a place for large enterprise companies to be able to manage all this deadstock, from raw materials to finished goods in one place, centralize it and then take action. We can help them manage everything from internal reuse to external resale to donation and recycling.”

As the platform has grown, so too have its abilities. Queen of Raw teamed up with the Massachusetts Institute of Technology’s Solve initiative to develop algorithms that quantify how much water, carbon, waste or dollars companies save by selling or purchasing deadstock.

“It actually provides books and records that are auditable,” she said.

Benedetto, who is based in New York, estimates that more than $288 billion in unused fabrics, trims and hardware is just sitting around in warehouses all over the world gathering dust. Queen of Raw, she said, makes it fast and easy for companies to trade in these materials, which her company vets according to its verification standards. She calls it a win-win: Sellers are able to recoup the value of their unwanted inventory, while buyers can snag a wide swath of high-quality materials, including silks and leathers, at discounts that can range from 25 to 50 percent.

Shein embarked on what Watson called an “exploratory pilot phase” in January without fanfare, by incorporating a handful of Queen of Raw-sourced fabrics into its production. These included a black knitted fabric, derived from 83 percent polyamide and 17 percent elastane, that the Gen Z fave stitched into a ruched off-shoulder blouse, priced at $12.49. It turned a chartreuse version of the material into a long-sleeved curve-hugging dress with an asymmetrical neckline, which it sold at $18.

“So we did the sourcing, we got the swatches, we did the sampling. It looked good. We did quality testing—the team wanted to know ‘O.K., is this going to be a viable high-quality deadstock’; they passed the quality tests,” Watson said. “Then we posted them quietly—didn’t do a big promotion around them or anything like that.”

The Singapore-headquartered firm wanted to see how the looks performed organically, and “organically we got five-star reviews,” she said. The site even received comments specifically about the quality of the fabric, all overwhelmingly positive.

“It gave the team’s confidence that this was that this could work,” Watson added. “We wanted to take this new business model and try to fit it as seamlessly into our current business model.”

Shein will be sourcing its deadstock close to its central production hub of Guangzhou. (The Madison Fisher collaborator recently announced it will be expanding its manufacturing footprint to Brazil.) Because China is the world’s largest clothing exporter, the region provides an embarrassment of riches when it comes to glut fabrics.

“Our software has identified over 20 million meters of first-grade, high-quality deadstock just for my clients,” Benedetto said.

Watson is “warming” Shein’s sourcing team up to different options. Mostly it’s used to looking for certain kinds of textiles, such as stretch fabrics and synthetic knits, that dovetail with the company’s youthful aesthetic, she said. By leveraging deadstock’s more affordable price points, TikTok’s most namedropped brand is able to glean more so-called “preferred” fibers, including recycled polyester and Tencel, along with materials it’s never used before, like silk, leather and even cashmere.

With its soft launch an unmitigated success, the IPO aspirant intends to ramp things up. Later this month, Shein will fete a collection, under the auspices of its EvoluShein by Design initiative, that will feature surplus textiles. It’s putting together dedicated teams that will focus on developing styles using deadstock materials. Future partnerships with other brands are another possibility.

“This is really a new system,” Watson said. “This is really something that we are building from scratch that we have an opportunity to create a blueprint for other companies. If we can make this work and use the technology to source as quickly, as efficiently and with [as much] trust as any other sourcing relationship, then it does make this entire circular economy of deadstock viable for anyone.”

How much of Shein’s lineup will eventually comprise deadstock remains to be seen, though Watson says it would be “amazing to see as much as possible.” The fast-fashion purveyor is prodigious in its output with some 6,000 new styles of clothing and shoes a day, though it insists that it produces each item in small batches of 50 to 100 that minimize waste. Even so, it stocks 600,000 SKUs on its website at any one time. Together with its bargain basement prices, broad use of petrochemical-based textiles and canny grasp of social media promotion, Shein’s business model has attracted widespread criticism for fueling overconsumption and, yes, waste.

“This initiative has some promise, but the benefits partially depend on what percentage of Shein’s total fabric usage it’s planning to source from deadstock,” said Elizabeth L. Cline, author and professor of fashion policy at Columbia University. “One million yards sounds like a lot, but it’s unclear if that makes up anything more than a sliver of the company’s total output.”

Shein, she added, needs to avoid greenwashing by overstating the environmental benefits of deadstock.

“Some brands count deadstock as if it has no environmental impact because it might have otherwise gone unused, which is misleading,” Cline said. “If the material hasn’t been used yet, the deadstock, in my estimation, still counts toward the company’s footprint as a new raw material. Shein’s participation in the deadstock market at such a large scale might also have the effect of encouraging brands to over-order and overproduce material, even if that isn’t their intention.”

Watson said that there is no reason why deadstock can’t make up a “huge” percentage of the Shein X incubator’s output. As part of its EvoluShein sustainability roadmap, the company is focusing on promoting products with responsible materials and manufacturing, she said. Using deadstock will help it achieve its goal of cutting its carbon footprint by 25 percent by 2030 even faster, she noted.

“What we are really excited about is not only being able to see how much deadstock we are rescuing in terms of yardage and tonnage, but then really being able to measure the water, the chemicals [and] the carbon that is potentially saved from using these materials rather than producing new materials,” Watson said.

For Patrick Duffy, founder of sustainability nonprofit Global Fashion Exchange, however, circularity won’t save fashion unless other aspects, like overproduction, are addressed as well. In other words, he said, innovative sourcing such as utilizing deadstock is only part of the solution.

“The ultimate objective is to lessen the amount of clothing that is initially produced and sold, particularly in regions of the world where closets overflow with far more clothing than we require and then ultimately [get] dumped in places in an effort to sweep it under the carpet, so to speak,” said Duffy from New York. “Reducing the amount we consume and significantly extending the lifespan of the clothing we purchase and wear will be the most effective and sustainable strategy to minimize the carbon emissions and waste produced via the fashion industry.”

Shein, which is currently being investigated by Congress for potential links with forced Uyghur labor in China, is no stranger to deflecting the jeers of its detractors, though it has also been charged with papering over its perceived sins. When it was accused of stealing designs from indie creators, it brought a number of them, such as Freak City L.A. and Nora Ink, into its fold. When reports of sweatshop-like conditions at its warehouses and factories hit headlines, the Nanjing-founded firm announced it would be spending $70 million on upgrades and community services. When naysayers harped on the disposability of its merchandise, Shein poured $50 million into an extended producer responsibility-like scheme to benefit communities impacted by textile waste, particularly those in the global South. It also dove into resale.

Watson sees its Queen of Raw collaboration as complementary to its partnership with The Or Foundation in Ghana, where an estimated 40 percent of imported clothing ends up as trash.

“EPR is all the way at the very end where there is going to be textile waste in the world, no matter what,” she said. “This is a way of mitigating issues all the way at the beginning.”

Still, Ann Runnel, founder and CEO of Estonia-based Reverse Resources sees another path that Shein can take. Her software-as-a-service platform, which seeks to scale textile-to-textile recycling, works with 14 percent of the largest brands, including H&M Group, representing roughly 5 percent of the fashion industry.

“From the Reverse Resources perspective, we are looking forward to a chance for a deeper conversation with Shein to also dig into the question of the recyclable waste streams,” she said. “There, I believe, our solution can create good synergy with Queen of Raw. Instead of deadstock, we focus on the journey of recyclable waste back to textile-to-textile recycling.”

Benedetto said she harbors no reservations about putting her name next to Shein’s. She doesn’t think that promoting deadstock encourages manufacturers to churn out more than they need, either. Holding excess stock is not only inefficient but also expensive, so it makes “zero business sense,” she said.

“I think we are all part of the problem and we are all part of the solution. And you cannot change what you can’t measure,” Benedetto said. “I want to work with everyone and have everyone participate so that we can all be a part of solving this. Changing just a small percentage of the way these massive companies do business can have a real impact. That’s what I believe in.”

Click here to read the full article.