Renewcell files for bankruptcy due to lack of funding, fashion sector support

Textile-to-textile recycling company Renewcell is filing for bankruptcy at the Stockholm District Court due to a lack of sufficient financing and not enough interest in recycled fibres from the wider fashion industry.

Shemona Safaya February 26 2024

Renewcell, which is the maker of recycled fibre circulose, said its decision follows advanced negotiations with its two largest shareholders Swedish fashion brand H&M and biotech company Girindus, as well as its existing lenders, potential new investors, and other stakeholders.

However, it added that despite these discussions, no concrete solution was found to provide the company with the sufficient financing to be able to complete the strategic review it announced in November with a satisfactory result.

Chairman of the board of directors at Renewcell, Michael Berg, stated that even though the company was a part of "intense" dialogues with both current main owners, new investors, banks and other stakeholders, these discussions were "unsuccessful".

He said: "As we have a strong belief in the company’s long-term potential, we have together with our advisors spent very substantial time and efforts into trying to secure the necessary liquidity, capital and ownership structure for the company to secure its future."

He added: "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."

The Swedish company did manage to secure short-term funding of SEK100m ($9.83m) in December, however it aimed to secure long-term financing by the first quarter of 2024.

Last month the company also announced plans to slash its workforce by 25% in a bid to create savings of SEK35m ($3.4m) per year.

The company's strategic review was announced in November in response to challenges it faced in terms of sales volume and market dynamic. Renewcell said at the time its decision to conduct a strategic review followed lower-than-expected sales volumes to fibre producers in its third quarter as well as subdued sales in October.

Uncover your next opportunity with expert reports

Steer your business strategy with key data and insights from our latest market research reports and company profiles. Not ready to buy? Start small by downloading a sample report first.

Newsletters by sectors

close

Sign up to the newsletter: In Brief

Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Thank you for subscribing

View all newsletters from across the GlobalData Media network.

close