All clothing sold in the EU might need to be recyclable from 2030. The University of Delaware's Leah Marsh and Dr Sheng Lu investigate the future potential of Europe's recycled clothing market.

Consumers’ increasing sustainability awareness has encouraged fashion retailers to carry more clothing made from recycled textile materials. For example, in Europe, one of the world’s largest apparel consumption markets, a growing number of fashion companies, from fast-fashion leaders like Zara and H&M to luxury brands such as Prada and Burberry, have entered the recycled clothing business.

According to the European Commission’s latest strategy for sustainable textiles, all clothing sold in the EU market could be required to be recyclable or use a certain amount of recycled content as of 2030.

Many analyses have reviewed the textile recycling techniques or consumers’ purchasing behaviours regarding related products. However, European fashion retailers’ detailed business strategy for selling recycled clothing products remained a “black box.”

By leveraging industry sources and a content analysis of companies’ websites, this study explores how retailers carry and sell clothing made from recycled textile materials in five of Europe’s largest economies – the United Kingdom (UK), Italy, Germany, France, and Spain.

These five countries account for nearly 60% of Europe’s clothing sales due to their high-income level. The analysis will focus on retailers’ product assortment and pricing strategies for recycled clothing products.

The aim is to help fashion companies better understand the business aspect of recycled clothing and explore the potential market access opportunities in Europe.

Note: in the study “recycled clothing” refers to an apparel item whose product label or online description explicitly mentions it contains recycled textile materials. In comparison “regular new clothing” refers to an apparel item whose product label or online description explicitly says it does not use recycled textile materials.

Europe’s recycled clothing market size and key players

The recycled clothing market in the five European countries included in this study have enjoyed fast growth over the past three years. Industry sources estimate that about 650,000 Stock-Keeping Units (SKUs) of clothing items made from recycled materials were newly launched in the five European countries in 2021, a substantial increase of nearly eight-fold from 2018 (or 147% average compound annual growth, CAGR). In comparison, the SKUs of regular new clothing available in the five markets increased by only about 28.3% over the same period.

However, despite the significant growth, recycled clothing remains a niche product in the five countries. Ultimately, recycled clothing only accounted for 1.5% of clothing launched in the five markets as of 2022 (Jan-May), although it was a notable rise from 0.4% in 2018.

Data also indicate that top fashion brands selling recycled clothing in the five markets include Adidas, Etam, Zara, Vera Moda, Undiz, Patagonia, H&M, VILA, Puma, and North Face. These retailers primarily launch recycled clothing to the mass market.

However, the top fashion brands with the largest market shares in the five countries are NOT necessarily big sellers of recycled clothing, such as Shein, Boohoo, Nike, Next, Tommy Hilfiger, Only, and Aliexpress. It could be the case that not all retailers have found it financially rewarding to carry recycled clothing or incorporate recycled clothing into their product assortment.

Meanwhile, similar to the regular new clothing market, around 11% of recycled clothing sold in the five countries targets the luxury segment. For example, Prada sold a EUR1,600 (US$1648.40) jacket using recycled nylon; one of Burberry’s hooded sweatshirts priced at GBP550 used 100% recycled polyester; and Marine Serre used recycled polyester for one of its hooded jackets, which sold for EUR1,000. Notably, a designer’s individual choice and vision for the product line often play a significant role in the availability of luxury recycled clothing in the market.

Product assortment analysis
Retailers in the five countries adopt a distinct product assortment strategy for clothing made from recycled materials.
First, clothing made from recycled materials concentrates on specific product categories, including outwear, swimwear, and bottoms. For example, from January 2018 to May 2022, about 20.2% of recycled clothing sold in the five countries was in the category of outwear, compared with only 10.9% of regular new clothing available in the market over the same period. Likewise, swimwear accounted for 6.4% of total recycled clothing sold in the five countries, but only 3.1%for regular new clothing.

In comparison, clothing made from recycled materials is less likely to be available for categories including tops and dresses. For example, from January 2018 to May 2022, tops comprise 45.4% of the regular new clothing sold in the five countries, but only 33.2% for recycled clothing (i.e., 12 percentage points gap). Dresses followed a similar pattern (10.5% of new clothing vs. 6.8% of recycled ones or 3.7 percentage points gap). Previous studies show that consumers often do not see the value of recycled clothing and are unwilling to sacrifice a clothing’s functional needs or aesthetic benefits in exchange for “sustainability.” Consumers’ preferences explain why specific apparel categories like formal dresses or wedding gowns rarely use recycled textiles.

Second, affected by the recycling technologies and the raw material supply, recycled clothing sold in the five countries mainly uses recycled polyester or a combination of two or more recycled fibres. For example, from January 2018 to May 2022, about 47% of recycled clothing sold in the five countries used a mix of recycled cotton and polyester, followed by items using 100% recycled polyester (29.1%). Apparel using a combination of recycled polyester and recycled nylon is also quite common (18.6%).
Notably, recycled polyester can be generated by mechanical and chemical processes using cheap inputs like plastic bottles, which explains its widespread usage. In comparison, it is still rare to see clothing made from 100% recycled cotton (less than 1% of the market total), given the technical difficulty of making recycled cotton strong and durable enough. The unbalanced supply of recycled textile raw materials by fibre types also contributes to the phenomenon that recycled clothing concentrates on specific categories. For example, swimwear and outwear are more likely to use recycled polyester than other textile fibres. In contrast, consumers may still prefer cotton over recycled polyester for tops like T-shirts and shirts.

Third, recycled clothing also adopts an interesting colour assortment different from regular new clothing in the five markets. For example, compared with regular ones, recycled clothing seems less likely to be in colours such as white and grey but more likely in colours such as black, green, and navies. One possible explanation is that recycled textile fibres’ physical limitations could make using specific dyeing processes (e.g., bleaching to white) or dyeing materials more challenging. On the other hand, recycled clothing uses green or navies more often as consumers see these earth-toned colours as more closely related to sustainability and circularity.

Additionally, recycled clothing looks more “boring” or “dull” overall. Notably, from January 2018 to May 2022, as much as 80% of recycled clothing available in the five countries adopted the plain pattern (i.e., the apparel item does not contain any graphics, spots, florals, or other designs) compared to only 60% of regular new clothing. Similar to the case of product categories, the current textiles recycling technologies could prevent the use of more complex designs for recycled clothing. recycled clothing. 

European recycled market’s pricing strategy

Retailers in the five countries carefully leverage pricing to promote recycled clothing and communicate its value to consumers. Either too high or too low, pricing could deter consumers’ purchase interest and affect a retailer’s profit. Two patterns are noteworthy:

On the one hand, retailers in the five countries generally tend to price recycled clothing lower than regular new clothing in the luxury & premium segment but often higher in the mass & value market. Notably, studies show that pricing recycled clothing faces a dilemma: whereas the production costs could be higher, consumers do not often see the value of such product (i.e., unwilling to pay a price premium). Thus, retailers may have to offer a relatively more attractive price to attract consumers to purchase recycled clothing, especially those targeting the high-end market. Also, in the luxury & premium market segment, retailers could price recycled clothing lower to compensate for their relatively inferior quality or lost functions, given the limitation of the current recycling technologies. However, to achieve the break-even point, retailers may have to price recycled clothing higher than regular new clothing, given the different cost structure.

On the other hand, retailers’ pricing for recycled clothing varies by product category in the five countries. For example, regardless of the market segments, retailers set a higher price for bottoms using recycled materials than regular new clothing. However, for outwear and underwear, recycled clothing is often priced lower. The reasons behind the interesting patterns can be explored further.

The future of Europe’s recycled clothing market 

In conclusion, the recycled clothing market will continue to expand in the years ahead with promising market potential. In particular, advancing recycling technologies will be critical to overcoming the physical shortcomings of recycled clothing and diversifying the product offers in the market.

Meanwhile, in collaboration with other stakeholders, retailers can do more to help consumers better understand the benefits of shopping for recycled clothing and change their perceptions about its low value and inferior quality.

By Just Style