Unsold clothes: why the ban on their destruction will also have perverse effects #672


Since 1 January 2022, the anti-waste law for a circular economy requires that unsold non-food products can no longer be destroyed. Clothes and shoes thus fall within the scope of this law.

Associations (Emmaus, Zero Waste, etc.) had denounced the practices of tearing or incineration.

This advance puts an end to these senseless practices in the light of the climate emergency. However, it is not without impact on the fashion, textile and clothing sector. And it could have perverse effects on the long-term objective of reducing production at source.

Unsold, ‘sleeping stocks

Unsold stock is production that could not be sold. In the textile industry, this is a classic inventory management variable. The manufacture of clothing or purchases are guided by the logic of repetition in volume from one year to the next, often leading to an inflation in the number of pieces to be sold.

Not about breaking news. Not about unfounded opinions.

Promotions and sales have always been the best way to dispose of the current season’s surplus. In the end, all the remaining products, the damaged ones and those returned by customers, become what we call the downstream unsold items.

Fabrics with defects, or the remains of a volume order, constitute the upstream unsold products of the producers and clutter up the warehouses. All of them are known as “dormant stocks” in French, but “dead stocks” in English. In fact, they represent an accounting cost for companies.

Until now, some brands agreed to let them go to secondary networks (sales, factory sales, private sales), others refused this solution and chose to destroy them. Since January, the latter option is no longer legally possible.

The challenges of “circular” fashion

This new regulation aims to optimise stock management and encourage thinking about reuse. In fact, producers and distributors are now thinking about the reuse and recycling of their unsold textiles in a circular economy.

The circular economy can be defined as “an economic system of exchange and production which, at all stages of the life cycle of products (goods and services), aims to increase the efficiency of resource use and reduce the impact on the environment while developing the well-being of individuals”.

In order to be operational, this notion often refers to actions identified by different “R” verbs. The most familiar to the general public are the 3 Rs – reduce, reuse and recycle – but the scientific literature distinguishes up to 9 Rs. These are not equivalent in terms of environmental impact and a hierarchy is needed between the different processes to which they correspond.

Following this logic, the circular economy should be understood as a process aiming firstly to extend the initial life of the product by seeking to preserve its intrinsic value at the highest possible level of utility, and secondly to increase the circularity of materials and components.

Upcycling diverted from its original purpose

By imposing a management of unsold goods, the surplus of new textiles upstream and downstream go directly to the status of waste without having a first life in a product. Making it compulsory to recycle them pushes companies to favour reuse actions and to create outlets for reselling them.

These ‘new’ sources feed into, but also disrupt, circular economic models based on reused products, as our current research shows. It uncovers the profound evolution of two historical models of circular fashion: upcycling and second-hand.

Upcycling consists of collecting second-hand clothes and textiles to modify them and give them added value (aesthetic and use). It corresponds to a logic of extending the initial life of a used product and reviving its circularity.

Currently, the upcycling market is rapidly refocusing on production from new “dormant” fabrics – end of rolls, fabric scraps from manufacturers, unsold clothes from retailers, etc. Thus, the key success factors for upcycling are now based primarily on the search for suppliers of unsold fabrics and the retention of this sourcing network. Sourcing is facilitated by the rise of platforms such as Queen of Raux, Uptrade, My little Coupon, Nona Source of the LVMH group, where players bid on the price of available materials.

This focus on the reuse of unsold goods calls into question one of the key principles of the circular economy: the maximisation of the number of consecutive cycles and the duration of each cycle embodied by the following sequential pattern: first use of the product, extension of the life span through repair and second hand, upcycling and recycling. By categorising a new product as waste to be revalorised, actors maintain, or even speculate on, unsold products (when they could adjust their management and reduce them).

Second hand with new?

Second-hand business models are also affected by the arrival of surplus products. Indeed, unsold textiles donated or sold to social economy charities, such as Emmaus, Secours Catholique, Oxfam or the Red Cross, raise many questions.

The development of a second-hand textile market “held” by consumers, accelerated by the creation of sales platforms such as Vinted or Vestiaire Collective, has already diverted part of the textile flows that consumers used to give to SSE structures. This first phenomenon has led to a decline in the quality of donations from individuals to these organisations.

At the same time, the law on unsold goods is likely to accelerate the phenomenon, already at work, of donations of unsold goods to SSE structures. The evolution of their model from the sale of second-hand clothes to an increase in the sale of unsold new products (which cannot be considered as second-hand) profiles an abundance of new fast fashion clothes, which are difficult to sell.

Objective: to reduce unsold goods

If these unsold products have not been bought by consumers, why should they be bought by these networks? A real question arises about the viability of the economic models of these structures, which have strong social and societal objectives.

The arrival of this law is salutary in the fight against waste, but it cannot overshadow the work of reflection on the reduction of unsold goods and the management practices of this sector. Like all good waste, the most virtuous unsold product is the one that is not produced.

The rise of the fight against upstream clothing waste through fashion 4.0, on-demand production, on-order, co-creation with consumers, combined with circular business models that deal with waste that has already been used and not ‘new waste’, give hope for a fashion that reduces unsold stock throughout the value chain.

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