Altor Acquires Renewcell: A New Era for Circulose Begins

Swedish private equity firm Altor made a significant announcement on June 4, revealing its plans to acquire circular textile company Renewcell, which had previously filed for bankruptcy in February. Following the acquisition, Renewcell will undergo a rebranding and be known as Circulose, named after its main product – an upcycled textile material made from discarded cotton clothing scraps.

Since the bankruptcy, there has been a wave of support from various stakeholders in the fashion industry, including fashion brands, fiber producers, and environmental nonprofits, who have rallied around Renewcell’s mission to bring low-carbon, recycled textiles to the mass-market fashion sector. By March 28, the 12-year-old public company had received multiple bids, indicating a strong interest in its innovative approach to sustainable fashion.

Nicole Rycroft, executive director of forest-protection nonprofit Canopy, expressed confidence in Renewcell’s revival, stating, “We were confident that the phoenix would rise from the ashes.” Canopy had worked closely with Renewcell and emphasized the importance of the fashion value chain being better equipped to support innovations like Circulose.

Altor, based in Stockholm, recently closed its largest funding round of 3 billion euros in January. The firm is recognized as an Article 8 fund in the European Union, indicating its focus on investing in companies that promote environmental or social characteristics. Altor’s strategic focus on building companies and improving earnings aligns well with the potential future of the Renewcell business under its ownership.

Circulose has already made its mark in the fashion industry, with capsule collections featuring Levi’s jeans in 2022 and H&M dresses in 2020. Renewcell had begun scaling up Circulose production at its Swedish plant last summer but faced challenges in maintaining product quality consistency, leading to a decline in sales in late 2023. Despite efforts to secure financial support from H&M Group, Renewcell ultimately declared bankruptcy.

Tricia Carey, chief commercial officer at Renewcell, highlighted the company’s struggle to achieve the economies of scale necessary for success. Additionally, some companies failed to honor their agreements, leaving Renewcell with excess inventory. However, the news of Altor’s acquisition and the continuation of Circulose production has been met with enthusiasm from industry stakeholders like Mango and Tangshan Sanyou Group, signaling a positive outlook for sustainable fashion materials.

The acquisition of Renewcell by Altor represents a new chapter for Circulose and the broader sustainable fashion movement. With a renewed focus on operational expertise and market scalability, the future looks promising for Circulose as it aims to drive positive change in the fashion industry.