A look at the warehouses of fashion retailers in Germany clearly shows the consequences of the lockdown: masses of clothes that could not be sold because of the closed shops. “We currently assume that around 30 to 40 percent of winter goods are still in fashion stores,” says the German Textile Trade Association (BTE) on request.
What value lies dormant there is difficult to quantify, “since prices have currently fallen sharply”. Already in January, the trade associations textile, shoes, and leather goods had spoken of a “huge avalanche of half a billion unsold fashion items”. Surplus of clothes has been sold through online platforms and car boot sales (visit carbootdirectory.co.uk for more info).
What happens to it now? In spring and summer, no one will want to buy winter coats anymore and storage for the next winter costs a lot of money. “Problematic is the lack of sales, with which now actually the new spring goods would have to be financed,” says the BTE. So retailers are facing a problem.
Greenpeace speaks of “mafia-like structures”
In the industry, there is talk of a solution that officially nobody wants to know about: the destruction of clothes. Greenpeace is sure that this is the order of the day. “There are mafia-like structures of companies that buy highly professionalized goods and thus give retailers the opportunity to claim that you do not destroy clothes,” says Viola Wohlgemuth, a fashion expert of the activists. “That’s what these companies do.”
The clothes would then be shredded and used, for example, as insulation material. “Around 55 percent of used textiles are destroyed, end up in industrial incinerators or even go to Eastern Europe, where they are illegally used as cheap fuel for heating,” says Wohlgemuth. “This also releases toxic chemicals into the air.”
The Ministry of Economic Affairs wants to counteract this practice with bridging assistance III. “Retailers should not be left sitting on the cost of seasonal goods that they could not sell during the lockdown,” says a spokeswoman on demand. Therefore, the loss of value for perishable goods and for seasonal goods of the winter season 2020/2021 up to 90 percent is recognized as a cost item. “If unsaleable goods are donated to charity, the full purchase price can be set,” it continues. The ordered goods, like all other fixed costs, are therefore to be reimbursed in an amount linked to the decline in sales.
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Closed Substance Cycle Management Act is not yet applied
Retailers such as H& M or Amazon never want to have heard of destruction anyway. And even the BTE is not aware of this. However, the problem must at least be so widely known that the Greens, together with the Handelsverband Deutschland and the Paritätischer Wohlfahrtsverband, launched an initiative to improve the financial position of clothing donations. Because so far, the destruction is usually cheaper than the passing on of clothes, because sales tax has to be paid on a donation.
Greenpeace does not go far enough with this idea. “Only when H& M and Zara, which costs to waste resources consciously, will change somewhat,” says Wohlgemuth. “We need a tender requirement and a certified body that passes on goods to state institutions or those in need.” In other words, destruction should be banned and companies will have to pay for it if they do not use surplus clothes themselves. In Wohlgemuth’s eyes, corona aid should also be linked to sustainability criteria. “From my point of view, retailers must be supported who are positioning their products for the future – away from fast fashion. Business models that include sharing, repair, exchange, lending, and advice should be encouraged.”
The legal basis for this has actually already been laid. The Closed Substance Cycle Management Act passed in the autumn of 2020 actually prohibits the destruction of new goods. However, each federal state must implement the concrete design of the ban in the form of ordinances. This has been lacking so far.
For the customers, the situation could mean one or the other bargain. “Currently, attempts are still being made to sell goods with high discounts,” says the BTE. But what is not sold must soon be out of the warehouses; the next collection is sure to come.