Hugo Boss became a front-runner in the race to adopt HeiQ AeoniQ yarns, putting a $5 million equity investment in HeiQ AeoniQ LLC and an additional contingent $4 million based on performance milestone arrangements.
The Lycra Company has also become the exclusive distributor for HeiQ AeoniQ yarn by making a significant, undisclosed investment and by committing to develop the technology for broad application in textiles.
As part of its “Claim 5” growth strategy, upscale apparel company Hugo Boss executed its first sustainability linked investment in HeiQ AeoniQ, a fully owned subsidiary of London listed HeiQ Plc. The strategic partnership will help Hugo Boss meet its ambitious sustainability targets, which include the aim for climate neutrality within its own area of responsibility by 2030 and throughout the entire value chain by 2045.
In addition, the investment will aid the company in establishing an end-to-end circular business model by significantly increasing the proportion of more sustainable materials over the coming years. Over the mid to long term, Hugo Boss is focused on the potential to materially complement and substitute the currently used polyester and nylon fibers with the cellulosic HeiQ AeoniQ fibers.
“Our exciting partnership with HeiQ on HeiQ AeoniQ represents yet another important milestone on our journey toward becoming the leading premium tech-driven fashion platform worldwide,” Hugo Boss CEO Daniel Grieder said. This game-changing collaboration with HeiQ enables us to further push innovation and sustainability across our brands’ offerings, thereby driving measurable impact for environment and society alike.”
Prior the Hugo Boss equity investment, the Lycra Company agreed to be the exclusive distributor for HeiQ AeoniQ yarn through payment of a milestone-driven technology fee and a commitment to leverage its deep textile knowledge and market channel access to prepare this new technology for broad use in apparel applications.
“Sustainability continues to be a core tenet of the Lycra Company’s strategy, as we are focused on providing value-added technologies to help our customers create and develop exceptional fabric and garment offerings while reducing the environmental footprint, without sacrificing comfort or performance,” said CEO Julien Born. “Through our close collaboration with HeiQ, we are working together to fast-track the commercialization of HeiQ’s AeoniQ yarn and are excited by the impact this ground-breaking innovation will have on the apparel industry.”
Carlo Centonze, co-founder and CEO of HeiQ, said the financial commitments by these companies are strong endorsements of HeiQ AeoniQ’s potential.
“This also demonstrates our ability to commercialize our HeiQ AeoniQ IP, now with an implied valuation of $200 million,” Centonze said. “HeiQ AeoniQ yarn is a versatile alternative to polyester and nylon, and its climate positive qualities create a very exciting market opportunity for HeiQ, as fashion brands and retailers come under increasing pressure to do their part in decarbonizing their products and reducing their environmental footprints.”
The new funds will help to scale up and commercialize the technology behind the brand. In this context, HeiQ AeoniQ will build its first commercial giga factory in Central Europe by the end of 2024 and is currently scaling up its pilot commercialization plant for fiber production, scheduled for the second quarter of 2022.
HeiQ AeoniQ is a continuous cellulosic filament yarn made out of cellulosic biopolymers that during growth bind carbon from the atmosphere. HeiQ AeoniQ yarn is designed to substitute existing oil-based filament yarns, such as environmentally persistent polyester and nylon that constitute more than 60 percent of global annual textile output of 111 million metric tons.
HeiQ noted that the global polyester and nylon fiber market is worth an estimated 135 billion with a compound annual growth rate of greater that 3.5 percent over the next decade. For every ton of polyester and nylon substituted by HeiQ AeoniQ, potentially up to five tons of CO2 can be reduced.
HeiQ AeoniQ yarns are also designed to be circular, use 100 percent renewable energy for manufacturing and feature closed-loop recycling of more than 99.5 percent of productive factors, use no toxic chemicals and do not draw on arable land, pesticides or fertilizers for its feedstock.
With 14 offices, seven manufacturing sites and seven research and development hubs, HeiQ has a total capacity of 45,000 tons of specialty chemicals per year and serves over 1,000 industrial customers in over 60 countries.
Hugo Boss, with its two brands, Boss and Hugo, offers collections in 127 countries at around 7,350 points of sale and online in 59 countries via hugoboss.com. The company, based in Metzingen, Germany, posted sales of 2.8 billion euros in the fiscal year 2021.
The Lycra Company innovates and produces fiber and technology solutions for the apparel and personal care industries. Headquartered in Wilmington, Del., the company owns the consumer and trade brands such as Lycra, Lycra T400, Coolmax, Thermolite, Elaspan, Supplex and Tactel.