Production returns to Europe on ‘sustainable’ terms

The European Commission intends to make textile products more durable and recyclable by 2030. Production conditions are more targeted. According to a McKinsey analysis, more than half of fashion industry executives want production to be more local and more controlled.

Apart from Poland and Romania, the textile industry in Portugal is currently very popular, also because the state has invested a lot in this sector, says Dr. Achim Berg, Expert on the fashion and luxury goods industry “In addition, there are well-trained specialized staff, and the minimum wage is 887 euros per month.“. Business is booming around the city of Porto in Portugal. The industry offers its own research and innovation center there. The existing recipe for success: sustainability, waste recycling.

But many fast fashion companies are also planning to bring parts of their production back to Europe. Even if not primarily for sustainability reasons. “Brands can bring new collections to stores even faster and save on transport and storage costs” says industry expert Achim Berg. This of course, is not possible if the production is in Southeast Asia or China.

Sustainability and proximity to Central European sales markets are two trends that have given Portugal’s textile industry a boom. This boom will likely continue – or even get bigger. Many clothing chains in Europe are looking for new strategies: sustainable fashion, but at the lowest possible price.

Hence, the shift to sustainable fashion costs money. Companies and brands need to spend money to promote their sustainable collections, the durability of clothes and shoes, but also “new values”. As the company executive notes, even practical, small steps that are easier to implement and do not impose additional costs on the consumer could bring the industry one step closer to “sustainability”. “Everyone can put a small stone in this big bet” he concludes.

However, buying clothes or shoes that simply have the “sustainable” label sewn on them is not enough to “save” the planet. As climate change brings increasingly extreme weather events and global temperatures rise, the coming year is likely to mark a heightened industry focus on environmental, social, and governance issues.

McKinsey survey shows that the topic is seen as both the number-one priority and number-one challenge for industry executives. The most successful companies will find a balance between sustainability initiatives, risk management, and commercial imperatives.

Fashion companies in Europe will face economic headwinds, technology shifts, and an evolving competitive landscape in 2024. However, shifting consumer priorities will continue to offer opportunities.

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