I think it's acceptable to say that stories that genuinely embrace sustainability and circularity are rare.

Actually, it is precisely what happened when the Swedish circular textile manufacturer Renewcell was rescued from bankruptcy by the private equity firm Altor. The phoenix, once thought to be on the brink of extinction, has risen from the ashes, its name changed to the name of its flagship product,  Circulose, a testament to the power of innovation and determination.

Renewcell set out on its path ten years ago with the goal of making low-carbon recycled materials accessible to everyone.

An upcycled textile material created from wasted cotton material pieces, Circulose was the company's flagship product. Fashion companies, fiber manufacturers, and environmental organizations all fell in love with the groundbreaking concept. Marking an important milestone in the company's evolution, Circulose debuted in capsule collections of Levi's trousers and H&M dresses by 2020.

Although Renewcell got out to a promising start, the company had trouble maintaining consistent product quality, which led to a precipitous decline in revenues by the end of 2023. Renewcell was left with nearly two years' worth of Circulose on hand when its chief commercial officer Tricia Carey noted that the company had to rush to reach economies of scale since certain customers didn't follow their offtake agreements. The company's bankruptcy in January was a direct result of this catastrophic blow [1].

Even when times were tough, there were always individuals that clung to Renewcell's dream. Brands in the fashion industry, manufacturers of fiber, and environmental NGOs all came together to support the company and its cause. This group effort was the deciding factor in Altor's acquisition of Renewcell, which it rebranded as Circulose.

The executive director of the forest-protection organization Canopy, Nicole Rycroft, stated, "We were confident that the phoenix would rise from the ashes," referring to the partnership between Renewcell and her organization. "The fashion value chain is now better primed to ensure these innovations have an easier path to market and scale." [1].

Altor made a bold move by investing in Circulose due to the innovative product and dedication to circularity and sustainability shown by the company. Altor, being an Article 8 fund, is ideal for Circulose since it invests in enterprises that have positive social or environmental impacts.

[1] Wenzel, E. (2024, June 7). Circular Textile “phoenix” Renewcell is bought out of bankruptcy. GreenBiz.