It goes like this: [Insert name] commits to “full carbon neutrality,” or “new sustainable goals” or perhaps “fighting climate change.”
What company is responsible for saying each of these things? It doesn’t matter, because 2019 was the year that broadly, the fashion, beauty and retail industries realized this “sustainability” concept was here to stay — and not taking a stand on it now would jeopardize their future profitability indefinitely.
The Paris Agreement was a blueprint to thwarting global temperature rise this century, starring a goal to limit global temperature rise to a safe 1.5 degrees Celsius pathway and drawing a line toward a climate-neutral economy by 2050. It was born out of the 21st annual United Nations Framework Convention on Climate Change (COP21) in Paris, in December 2015. But until the last couple of years, the fashion industry as a whole was reluctant to climate commitments until it became in vogue to care.
And nobody wants to follow, when they could lead the charge.
In August, against a backdrop of concerns over climate change, biodiversity loss and single-use plastics, Kering’s chairman and chief executive officer François-Henri Pinault unveiled the “Fashion Pact,” which debuted ahead of the Group of Seven summit hosted by France in Biarritz.
Early signatories included H&M, Inditex, Adidas, Nike, Capri Holdings, Gap, PVH, Ralph Lauren, Tapestry, Chanel, Hermès International, Prada, Salvatore Ferragamo, Giorgio Armani and Burberry.
Prior to that, it was the Fashion Industry Charter for Climate Action, which drew support from the United Nations, having been launched in December 2018 at the annual Climate Summit.
“The fashion industry, as a major global player, needs to take an active part in contributing to the realization of these goals,” the charter stated. (Emphasis on the “active part” not so much “goals.”)
But the Fashion Pact would include existing commitments, like its celebrated predecessor, and aim to bring alignment to the private sector where current initiatives are a bit “scattered” in the words of Baptiste Perrissin-Fabert, director of the junior ecology minister Brune Poirson, to WWD. The glossy new Fashion Pact also aligned itself with the science-based targets of the Paris Agreement and threw a unifying fist into the air. With representation from more than 30 percent of the fashion industry, it appeared closer to a critical mass than most, but not as ambitious — as the next calendar month would show.
In September, a day before the reported largest global climate protest in history (reporting 4 million marchers worldwide, by environmental group estimates), Amazon’s Jeff Bezos unveiled a climate pledge that essentially one-upped the Paris climate agreement — by 10 years (to achieve net-zero carbon emissions by 2040). Bezos even snagged Christiana Figueres, the UN’s former climate change chief and founding partner to the Paris Agreement to help author its Climate Pledge.
But by October, the Fashion Pact gained more momentum, counting a total of 56 signatories, representing around 250 brands. Still, a few sizable players (namely LVMH Moët Hennessy Louis Vuitton) were missing from the list. As reported by WWD, Antoine Arnault, head of communication and image at LVMH said the company “[prefers] acts to pacts.”
Still, it didn’t end there.
“It is no mistake that Time magazine announced Greta Thunberg as ‘Person of the Year,’ the same time the Golden Globes and SAG nominations are announced. This is happening now,” “Once Upon a Time in Hollywood” costume designer and activist Arianne Phillips, told WWD. Perhaps responsible dressing has staying power past the one-off Hollywood Green Carpet Challenge, Green Dress Initiatives and re-wearing of vintage gowns. Some stylists shared their newfound responsibility for red carpet dressing, even curbing waste by lessening the gown count for their clients.
Fashion productions, and presenting designers, also attempted to “out-green” each other, with Helsinki Fashion Week, Copenhagen Fashion Week and other cities trumpeting their sustainability chops and trying to steal spotlight from each other.
The Swedish Fashion Council’s Stockholm Fashion Week was later disbanded to make way for “open-source platform” Fashion X (with similar goals to Global Fashion Agenda, the group behind Copenhagen Fashion Summit; Fashion Revolution; New Standard Institute, or any of the platforms formed in the past four years). Meanwhile, Helsinki Fashion Week and Copenhagen Fashion Week were busy transporting editors and buyers via electric vehicles (like the Tesla) and their designers showcased seasonless or pared down collections, vintage and upcycled looks and sustainable materials.
“I think the biggest challenges right now to a more sustainable future is a lack of action and greenwashing,” said Evelyn Mora, consultant and founder of Helsinki Fashion Week.
The spring 2020 collections in Paris revealed “offbeat earthy sobriety,” as in the case with Dior, the most sustainable collection ever for “hopeful, fearless” Stella McCartney and climatic looks (e.g. reminiscent of oil spills) at Marine Serre, while in Milan, “A New Awareness” spotlighted sustainability in a multiday exhibition during fashion week. In London and New York, sustainability was also touted heavily by emerging designers.
Months earlier, aiming to tackle the denim industry’s excessive reliance on water, chemicals and the like, the Ellen MacArthur Foundation’s “The Jeans Redesign Initiative” came into fruition, with signatories such as Gap, Reformation, Tommy Hilfiger and others. More recently, “The Circular Polybag Pilot” was unveiled by Fashion for Good and its brand partners, which included Adidas, C&A, Kering, Otto Group and PVH, among others, to try to figure out a circular solution to polybags.
While enthusiasm for sustainability came in the form of campaigns, pledges, pilots and star power on both the red carpet and runways, the retail climate in the past year was a different story. (A much more demoralizing one.)
Coresight Research found that there were 9,271 store closures announced in the U.S. this year (at the time of publication), compared to 5,844 last year. These blows were harshly dealt to the over-stored, over-inventoried and out-of-touch.
This is in stride with a resale market that’s grown 21 times faster than the traditional apparel market over the last three years, according to research from GlobalData Retail.
According to multiple industry experts, 2019 marked the “mainstreaming” of secondhand fashion, perhaps most easily exhibited in the initial public offering of The RealReal.
Secondhand and Rental Stealing Market Share
The secondhand market — which includes resale and thrift — is projected to grow to $51 billion by 2023, while the growth projection of the rental market is similarly staggering, set to surpass $2.5 billion by 2023, according to insights from GlobalData Retail (as outlined in ThredUp’s annual resale report).
Snagging a valuation of $1 billion in 2018, the apparel rental market has been growing more than 20 percent annually, by those same insights. An October survey from CGS found that 75 percent of “sustainably conscious consumers” will pay more to rent clothing, and 64 percent of Gen Z respondents were likely to pay more for sustainable products overall. Although this opportunity is still scratching the surface (just 8 percent of those surveyed by CGS have considered or used an apparel rental service).
The decade-old Rent the Runway was irrefutably a pioneer in the clothing subscription rental market, and in the last year has spurred many a copycat (Jennifer Hyman, ceo and cofounder of Rent the Runway, has said she’s still “waiting for my thank you” at a Bloomberg event in November). This includes business-to-business solutions like CaaStle, which indulged plug-and-play pilots with American Eagle, Bloomingdale’s and Banana Republic, among others, while Urbn — the parent company of Anthropologie, Urban Outfitters and Free People — invested millions into building out and launching its proprietary “Nuuly” clothing rental service.
But copycat culture rules in the venture capital world and secondhand and rental markets are no exception. Consolidation is likely over the next 12 months, according to Keval Desai, general partner at InterWest Partners (which has invested in companies such as The RealReal, Cuyana, Canva and Optimizely).
In a December report, John Morris, a retail analyst at D.A. Davidson, reported on several fashion retailers while also predicting resale’s potential front-runner. “With a seamless supply chain, high customer retention and substantial take rate, we expect Real to dominate the digital consignment space,” Morris said, referencing The RealReal.
The company has a unique business model that is poised to lead on the Millennial- and Gen-Z-favored shopping values such as sustainability and individuality, according to Morris.
But secondhand is also made up of the long-standing brick-and-mortar thrift shops that are riding the wave of mainstream success and gaining from this “flash-up of all this attention,” in the words of Tony Shumpert, vice president of reuse and recycling at Savers.
Shumpert has been in the textile reuse and recycling space just shy of 20 years, and he shared his insight on retail in the last year as well as coming trends, with WWD.
“Anyone new to this space is, generally speaking, driven by the size of the revenue opportunity,” said Shumpert. “The next evolution is how are these organizations going to deal with all of the things that they don’t sell. They’re going to need to answer that both for their consumer and for their P&L.”
Shumpert believes the way traditional brands and retailers have looked at themselves is “outdated,” and that the “new consumer” isn’t all that concerned with heritage as it used to be known. “Heritage” is rather “what are [brands] standing for today that is linked to a sustainable future,” he said.
In favor of sanctioning new consumer values or solely increasing revenue, heritage players and fast-fashion retailers alike have gotten into the resale market, too. Last spring, Neiman Marcus made a minority investment in Fashionphile and Farfetch launched a resale handbag service; Macy’s Inc. and J.C. Penney Co. Inc. opted to pilot resale with apparel reseller ThredUp last summer before the back-to-school season; luxury brands like Burberry teamed with The RealReal, and fast-fashion retailer H&M bought a majority stake in secondhand seller Sellpy. Meanwhile, this holiday season was marked by a new consciousness (and affinity for secondhand clothing as gifts, too), as an Accenture report found, and it’s set to continue.
“We’ve entered the era of responsible retail, where consumers are becoming more environmentally and socially conscious and will flock to brands that not only talk about responsibility, but also demonstrate it through their business operations,” Jill Standish, global managing director and head of retail at Accenture, told WWD.
“It comes down to being able to evaluate their actions,” said Shumpert on the trajectory of resale and traditional retail partnerships. “Consumers are smart. I don’t really worry about the players that may not being doing it in earnest. Consumers have more access to information than they’ve ever had today.”
“For Macy’s and J.C. Penney to take on resale simply shows their desperation,” said one retail consultant who requested anonymity since he is working with these companies. “They have run out of ideas. Instead, they should cut their store base in half and focus on execution.”
Before department stores stepped into the buzzy resale market, it’s important to note that brands such as Patagonia, REI and Eileen Fisher were already quietly operating branded resale platforms and take-back programs, (with Eileen Fisher hitting her 10th anniversary of the take-back program this year).
“Even in the last year, as brands and retailers have responded to consumers becoming more informed about their clothing footprint, they begin to go a little deeper to understand at a material level what’s possible and understand some of the challenges,” said Shumpert.
What is it about secondhand and thrift that resonated so strongly with mainstream consumers in the past year?
“Thrift is offering people, no matter the cycle in the economy, the same experience in terms of the ‘thrill of the find.’ What you’re coming in to discover in most cases is the same. It’s a unique environment and unique experience,” said Shumpert.
But sustainability won’t suffice as a signature on a pact or as a side-order business — it’s a given. “Not only is it non-negotiable, we do have to recognize that it’s hard. These changes that are being pursued are really hard because the retailer still needs to produce something that consumers want to buy. At the very front of that curve, it’s going to cost a lot more than we’re used to,” said Shumpert, who added that the consumer never asked for the $4 T-shirt, but they were given it and today’s expectations of value, ease of access and quality are still there. But with many more asks (like sustainability) piled on top.
Inseparable to the changes witnessed in the last year and the boom in resale and rental businesses is the larger vision of a circular economy.
It’s “a really flat ‘U’ at the moment, not really a circle yet,” according to Shumpert. “The problem today is we’re not designing for it. It’s challenging and a shock to the system as far as cost.”
Brands are looking at everything from improving packaging to incorporating recycled and responsibly sourced materials to planting trees and buying carbon offsets to reduce their impacts.
“Over the next five years, we’re going to see significant advances in pulp fiber for circularity,” he said. True, much of the fashion industry has seen investments in textile innovation, chemical recycling, even unlocking traceability at scale (e.g. Ralph Lauren digitized its entire product assortment in November with technology partners Evrythng and Avery Dennison), but it’s only the beginning.
As noted by the World Economic Forum, leveraging the fourth industrial revolution and embracing the concept of “stakeholder capitalism” may be the best-case scenario for the apparel industry to respond to today’s social and environmental demands — like those outlined in the Paris Agreement and United Nations Sustainable Development Goals.
Capping the year, the United Nations climate summit in Madrid, which at two weeks was the longest climate conversation in history, ended without new emissions target goals to regulate carbon markets prior to next year’s meeting in Glasglow. The lack of new targets mirrors a similar lack of overall progress seen in the fashion industry.
As a new decade gets ready to dawn, applause is likely to be given more to the companies that actually act on these new consumer values and attitude toward sustainability, than those who simply talk about it.
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