The axiom “one man’s trash is another man’s treasure” is getting an eco-sensitive spin, thanks to Barneys New York, Loomstate and the Sundance Channel.

The triumvirate is launching a national T-shirt recycling program called Tune In, Turn On, Drop Off. From April 13 to 27 consumers will be able to drop off old T-shirts at all Barneys locations. They will receive a 20 percent discount on women’s Loomstate for Barneys Green merchandise and Loomstate for men. The donated T-shirts will be refashioned into a limited edition collection by Loomstate for Barneys Green.

Loomstate will restyle, re-dye and reprint the garments, which will be sold at Barneys for holiday 2008. Sales of the refashioned T-shirts will benefit 1 percent for the Planet, an alliance of businesses that donates 1 percent of sales to environmental groups.

The program is about “finding creative ways of getting customers to come into the store,” said Julie Gilhart, senior vice president and fashion director of Barneys. “It’s having a mission — recycling — that makes you feel good. This is part of my passion for the whole environmental thing. We did something similar with denim, where customers brought in their old jeans and we recycled them, only we donated the denim rather than sell it. Customers loved it. This will give us exclusive product for holiday.”

Scott Hahn, founder of Loomstate, which uses 100 percent organic cotton, said, “Everything that comes from the soil should go back to the soil. In the context of organic cotton farming, we said, ‘How can we not only focus on the agricultural story but engage what’s already in people’s wardrobes?’ It’s turning waste into fuel, or in this case, turning waste into fashion.”

The trucks delivering Loomstate garments to Barneys units can turn around and take the donated T-shirts back to the company’s facility. “It’s a truck that has a carbon footprint anyway,” Hahn said.

Neither Loomstate nor Barneys would discuss the price of the T-shirt collection. But Hahn predicted “it won’t cost any more than a Loomstate T-shirt costs now.”

Scissors, needles and thread won’t touch the donated garments. They will be restyled cosmetically with graphics in the Loomstate vein, such as images inspired by life cycles and psychedelic images of nature.

This story first appeared in the March 31, 2008 issue of WWD. Subscribe Today.

“We clean them and print them and give them more of a fashion angle,” said Hahn, adding that there are criteria for “T-shirts we want to repurpose.” Those with body-skimming silhouettes will go in the “yes” pile, while loose boxy shirts with sports logos will go into the recycling bin.

Events around the initiative include an April 15 performance at Barneys in Los Angeles by indie rockers She & Him, featuring Zooey Deschanel and M. Ward. Kate Nash will appear April 22 at Barneys Madison Avenue flagship in Manhattan.

Sundance will film the project and air it on The Green on the Sundance Channel, a three-hour block of prime time programming dedicated to the environment starting at 9 p.m. each Tuesday.

“We’ll shoot the celebrations, but we also want to dig a little deeper and shoot the making of the initiative and track consumer participation in the process through to the sale of the merchandise,” said Kirk Iwonowski, executive vice president of marketing, sponsorship and branding at the Sundance Channel. “For us, it’s an incredible case study.”