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Renewcell Files for Bankruptcy

The Swedish textile recycler said it was unable to secure sufficient long-term funds to continue operations.
Renewcell's textile recycling plant.
Swedish textile recycler Renewcell has filed for bankruptcy. (Alexander Donka)

Swedish textile recycler Renewcell said Sunday it filed for bankruptcy after failing to secure sufficient long-term funding to continue operations.

The company launched a strategic review in November, after it emerged that demand for its recycled raw material was much weaker than expected. It managed to raise $10 million in short-term funding from investors and lenders (including its biggest shareholder, H&M) in December. But efforts to secure further investment have proved unsuccessful.

The situation marks a blow to efforts to introduce new, more sustainable materials to the market at scale. Renewcell, which developed technology to recycle used cotton textiles into a feedstock for yarns like viscose and lyocell, was an early mover in the space and viewed as a litmus test for others.

“This is a sad day for the environment, our employees, our shareholders, and our other stakeholders, and it is a testament to the lack of leadership and necessary pace of change in the fashion industry” Renewcell board chairman Michael Berg said in a statement.

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Learn more:

What’s Blocking the Rise of More Sustainable Materials?

Weaker-than-expected demand for Swedish textile recycler Renewcell’s recycled cellulose pulp has highlighted broader hurdles challenging efforts to lessen fashion’s environmental footprint.

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