Setback for the textile industry: Re:NewCell files for bankruptcy

The Swedish company is forced to file for bankruptcy due to a lack of financing options

Source and Copyright by Re:NewCell

Author: House of Eden

  • Re:NewCell is known for innovative recycling of cellulosic textile waste and their patented Circulose process
  • The company files for bankruptcy due to a lack of funds for the strategic review and fails despite intensive negotiations
  • The bankruptcy is a wake-up call to the fashion industry to stop prioritizing profit over innovation

Re:NewCell is known for its innovative approach to recycling cellulosic textile waste. Founded in 2012, the company developed a patented process for recycling cellulosic textile waste. Their innovative material is called Circulose. For now, the company has experienced complete success: in 2021, Re:NewCell was named one of the most innovative companies in the world by Fast Company and received recognition from TIME Magazine in 2020. The company's project was considered forward-looking, promising and transformative. This week the company announced its decision to file for bankruptcy. The Board made this decision due to the inability to secure sufficient funding to complete the strategic review initiated on November 20th 2023.

Failed negotiations led to bankruptcy

As part of this review, Re:NewCell has been conducting advanced negotiations in recent weeks with key stakeholders, including the two largest shareholders H&M and Girindus, as well as with existing lenders such as BNP Paribas, European Investment Bank, Finnvera, Nordea, AB Svensk Exportkredit and potential new investors. However, the intensive efforts did not lead to any viable solutions. Re:NewCell was unable to secure the necessary liquidity and capital for continued operations.

Chairman of the Board, Michael Berg, expressed his regret over the situation: "This is a sad day for the environment, our employees, our shareholders and other stakeholders, and it is a testament to the lack of leadership and the necessary speed of the Change in the fashion industry.”

Consumers still prioritize price over innovation

Re:NewCell's bankruptcy announcement is an unfortunate setback for all of us, especially for our environment. The innovative recycling of cellulosic textile waste by Re:NewCell was considered one of the first real milestones in the field of sustainable fashion. A real, honest and above all important innovation. But consumers don't seem to make enough use of this offer, even though there are constant calls for sustainable transformation. The bitter irony is that consumers still seem to reach for superficial promises of sustainability because they usually have lower costs. This will soothe their conscience and protect the wallet. However, companies with truly sustainable practices face financial challenges. The pursuit of image rather than true sustainability is symptomatic of a society that often gives priority to short-term illusions rather than putting its own needs aside for a moment.

Source by Re:NewCell Copyright by Alexander Donka

Wrong priorities in the fashion industry

Additionally, the question arises as to how much real change would be possible if leading companies, instead of investing in superficial advertising and sustainability campaigns, focused on innovative solutions. Re:NewCell had proven itself as a pioneer, but the lack of financial support, both from consumers and investors, shows that the priority is not really on sustainable practices. Money still plays the decisive role, even when it comes to saving our world. Companies often only emphasize sustainability when it is convenient, but when it matters, it becomes clear that their own profit comes first. With companies like Re:NewCell, success shouldn't be limited by money, but it seems as if no one is willing to raise the necessary capital.

This bankruptcy is not only the end of a company, but also a wake-up call for the entire fashion industry. It is high time that we as a society asked ourselves whether we are truly ready to take the necessary steps to promote true sustainability instead of getting lost in superficial claims.

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