H&M has snapped up a bigger piece of a leading recycled-textiles manufacturer.
The Swedish retailer is part of a group of investors that has acquired 1.9 million shares in Renewcell, amounting to 6.25 percent of the company, from Girindus Investments. Together with the minority stake it secured in 2017, H&M is now Renewcell’s second-largest shareholder with an 11.51 percent slice.
“As a longstanding partner and investor in Renewcell, we’re happy to continue supporting this game-changing technology,” Erik Karlsson, acting head of H&M Co:Lab, the company’s investment arm, said in a statement. “Renewcell has taken a leadership position in the circular textile industry and we look forward to creating new and sustainable collections together in the coming years.”
Renewecell, also based in Sweden, is the producer of Circulose, which it bills as the first 100 percent recycled fashion fiber to be produced from old jeans, T-shirts and other castoff clothing at an industrial scale. Its plant in Kristinehamn has the capacity to recycle 7,000 tons of cotton and viscose textiles every year, the equivalent of 30 million T-shirts by weight, using a patented “climate-friendly” process developed by researchers from the Royal Institute of Technology in Stockholm. It’s currently constructing another facility in Ortviken, where it plans to recycle 60,000 tons beginning next July.
Taking garments that cannot be resold, Renewecell strips them of any buttons, zippers, dyes and contaminants such as polyester before crushing what remains into a pulp. This “slurry” is dried and turned into sheets of “pure Circulose,” which are packaged into bales and shipped to be processed into textiles. The entire process is powered by renewable energy and entirely closed loop, meaning that the chemicals and water are recovered and reused rather than discharged as effluent.
H&M laid claim to Circulose’s first commercial yardage, blending it with sustainably harvested wood fibers to create an “easy blue day dress” inspired by the French Riviera for its Conscious Exclusive collection in spring 2020.
The two companies reached a multi-year agreement in November of that year, ensuring that Circulose would be a “core part” of H&M’s material portfolio “going forward” as it works toward its 2030 goal of becoming “fully circular,” Pascal Brun, head of sustainability at H&M, said at the time. The same month, Renewcell went up on Nasdaq’s First North Premier Growth Market.
Following the sale, Girindus remains Renewcell’s biggest shareholder in Renewcell with a 12.77 percent stake through its Girincubator AB subsidiary. Other investors include AMF Fonder, Handelsbanken Fonder and Swedbank Robur Fonder.
“We are very pleased with the transaction as it adds more strength to the Renewcell community,” said Malcolm Norlin, chairman of Girindus. “We see this as a strong sign that the fashion industry, as well as the institutional investment community, is fully committed to circularity.”