July 2026 Sustainable Fashion Update

Welcome to our July edition of the Sustainable Fashion Update.

In this month’s update, we dive into landmark regulatory shifts - led by the EU's official ban on destroying unsold fashion coming into force and the end of the EU €150 de minimis customs duty exemption, alongside major US policy shifts, breakthrough circular tech scale-ups, and price-vs-ethics realities at the checkout. Let’s break down what you need to know this month.

Policy & Regulation

• The EU Ban on Destroying Unsold Fashion is Now Active. Under the Ecodesign for Sustainable Products Regulation (ESPR), a landmark EU law took effect on 19th July prohibiting large brands from destroying unsold apparel, footwear, and accessories. Companies must reroute surplus stock into circular pathways like repair, resale, or donation, with mandatory public disclosures on discarded inventory arriving in early 2027. GREENEXT.

• End of EU De Minimis Exemption: A New Era for UK-EU Fashion Retail As of 1st July 2026, the European Union officially ended the €150 customs duty exemption (de minimis threshold) for low-value imports from non-EU countries. For UK sustainable fashion brands selling directly to EU consumers, goods valued at €150 or less are no longer duty-free. Instead, a flat-rate customs duty of €3 per item applies alongside existing VAT requirements, forcing brands to re-evaluate landed costs, EU pricing structures, and fulfilment strategies. UKFT.

• France Unveils Financial Penalties for Ultra-Fast Fashion. Starting 1st September 2026, France will impose environmental penalties on ultra-fast fashion through the Refashion EPR scheme, starting at €2 per item (rising steeply by 2030). Charges target high-turnover models (listing over 16,000 active styles) with poor repairability. Advertising and influencer promotions for non-compliant brands will also be banned starting January 2027. Apparel Insider.

• US Policy Shift: California’s Landmark Textile EPR Law Takes EffectThe registration deadline for California’s Responsible Textile Recovery Act (SB 707)—the first mandatory Extended Producer Responsibility (EPR) program for apparel in the US - passed on 1st July. Brands or marketplaces selling into California with global turnover exceeding $1M must register with the state-approved Producer Responsibility Organization (Landbell USA) to fund collection, repair, and recycling networks. Forbes.

• EU Launches Digital Product Passport (DPP) Registry: The European Commission has officially launched the central DPP Registry and testing portal under ESPR, providing fashion brands with API documentation and a live sandbox to test product identifiers ahead of compliance deadlines. (European Commission)

• EU JRC & ISO Advance Microfiber & Durability Testing Standards: The EU Joint Research Centre and ISO have advanced standardized test metrics for fabric durability and fibre shedding (including ISO 12945 and ISO/DIS 15487), making standardized laboratory test data a mandatory element under incoming EU Digital Product Passport (DPP) requirements. (Shijin Fashion / EU JRC Metrics)

• EU Drops Leather from Deforestation Rules: In a major shift, the European Commission updated the scope of the EU Deforestation Regulation (EUDR) to exclude bovine leather and raw hides. Citing supply chain complexities and viewing leather as a meat-industry by-product, the decision was welcomed by tanners but criticized by environmental groups warning of deforestation loopholes. (Mongabay)

• US Activates New 'Forced Labour' Tariffs on 60 Trading Partners: The US introduced Section 301 tariffs ranging from 10% to 12.5% on imports from 60 trading partners. The UK and EU member states face the 10% rate, while nations without active enforcement mechanisms face 12.5%, pressuring international supply chains to implement verifiable labor standards. (World Footwear)

• Ellen MacArthur Foundation Urges Binding Performance Rules Under ESPR: EMF warns that relying solely on Digital Product Passports isn't enough. Their latest paper argues that mandatory performance thresholds—such as binding durability standards, elastane limits, and minimum post-consumer recycled content—are essential to level the playing field. (Ellen MacArthur Foundation)

• Transparent EPR (Ireland Proposes Showing Waste Costs on Receipts): Ireland is consulting on draft EPR plans for April 2028 that could require retailers to display the exact end-of-life management cost (collection, sorting, recycling) directly on sales receipts or clothing labels. (Apparel Insider)

Circularity & Materials Innovation

• UK Fibre-to-Fibre Progress (Project Re:claim GRS Certification): Project Re:claim—the UK's first joint-venture commercial-scale polyester recycling plant—has officially achieved Global Recycled Standard (GRS) certification. Developed by SATCoL and Plan B Circular, the Kettering-based facility uses thermo-mechanical, solvent-free recycling to process post-consumer polyester into virgin-quality rPET pellets and yarn, giving brands third-party traceability to scale UK-recycled polyester. (Sourcing Journal)

• H&M Scales Textile-to-Textile Denim: H&M has introduced its first mainstream men's denim collection featuring TENCEL™ | Circ® with REFIBRA™ technology. Developed with Circ, Lenzing, and AGI Denim, the collection uses lyocell fibres crafted with 30% recycled pulp derived from polycotton textile waste—proving next-gen cellulosics can move through high-volume supply chains. (Just Style)

• Lululemon Backs Syntetica’s $30M Nylon Recycling Round: French deeptech startup Syntetica raised $30M in Series A funding—with strategic backing from Lululemon and MAS Holdings—to build its first industrial demonstration plant in France. Syntetica’s low-temperature chemical recycling depolymerizes complex blends of Nylon 6 and 6,6 from unsorted, post-consumer textile waste into virgin-quality pellets without damaging elastane components. (ESG Today)

• Recover Partners with Ünteks for High-Volume Circular Knits: Circular fibre producer Recover has teamed up with Turkish manufacturer Ünteks Group to produce high-volume circular knitted fabrics containing a minimum of 20% Recover recycled cotton. Utilizing Ünteks' vertically integrated capacity (up to 1,500 tonnes of fabric monthly), the partnership offers a ready-made blueprint for scaling recycled cotton across mainstream high-street lines. (Apparel Insider)

• YKK Unveils EXCELLA® Zipper Tape Made from Upcycled Clothing: Trim giant YKK has developed a concept version of its premium EXCELLA® metal zipper featuring a nonwoven zipper tape created from fiberized used garments and textile waste. Designed with Yuima Nakazato and Epson, the circular fastening component debuted on the Paris Haute Couture Week runway. (YKK Release)

• India Reaches 70%+ Textile Waste Recycling Milestone: A new study highlights that India is now recovering and recycling over 70% of its domestic post-industrial and post-consumer textile waste. Driven by structured sorting networks, automated mechanical recycling, and growing demand for recycled yarns, India's ecosystem is transforming localized upcycling into high-volume manufacturing solutions for global supply chains. (Fibre2Fashion)

Retail Highs & Lows

• The Viral "Zara Death Pants" Trend: Zara’s ultra-wide-leg trousers went viral following global tripping incidents caused by fluid, billowy polyester fabric. The trend serves as a stark warning of what happens when rapid, trend-led garment design bypasses basic fit, wearability, and functional safety testing.

• Primark Cuts Prices in Global ‘Iconic Value’ Rollout: Primark has lowered prices across hundreds of core lines across 19 markets to defend high-street volume against ultra-fast fashion rivals, while claiming concurrent investments in fabric durability and fit. (TheIndustry.fashion)

• Next Eyes Harvey Nichols: Next is preparing a potential takeover bid for luxury department store Harvey Nichols (which reported a £34M pre-tax loss), with Frasers Group also expressing interest.

• Aldi France Launch & "Baldi" UK Stunt: Aldi launched its first branded fashion collection across 1,300 stores in France. Meanwhile, Aldi UK temporarily rebranded to "Baldi" to celebrate Pitbull's headline concert at London's BST Hyde Park with novelty merchandise giveaways.

• Shein Secures HK Listing Approval for Anticipated Autumn IPO: Following regulatory hurdles in New York and London, Shein secured approval from the Hong Kong stock exchange listing committee. Target valuation has been adjusted to $40B–$50B (down from $100B in 2022) amid tightening customs rules and market shifts. (The Standard)

• H&M Financial Results & Retail Footprint Adjustment: Following Q2 revenues of SEK 54.8B (~£4.2B), H&M is targeting a net reduction of 80 physical stores this year (opening ~90, closing ~170) to rebalance its estate. (Source: H&M Group Financial Reports)

• M&S Partners with Lily AI: Marks and Spencer partnered with Lily AI to automate product data management and boost online product discovery across AI search engines and shopping platforms.

• Vinted Expands to Australia: Vinted launched in Australia via a 3-year partnership with Australia Post, following a 38% revenue increase to €1.1B.

• George at Asda Standalone Rollout: Asda opened its sixth standalone George store in Barnsley as part of its strategy to convert existing Asda Living locations.

• Nike Full-Year Results: Nike reported flat full-year revenue of £34.8B ($46.4B), with Q4 revenue dipping 1% due to a 7% decline in Direct-to-Consumer sales.

• Castore Acquires Controlling Stake in Grenson: Sportswear brand Castore acquired a 75% stake in 160-year-old heritage shoemaker Grenson.

• Dior & IFM Launch Sustainability Leadership Track: Christian Dior Couture and Institut Français de la Mode launched a certified internal training program to embed circularity, eco-design, and regulatory compliance across 15+ corporate departments. (Fashion United)

• UK Ultra-Fast Fashion Spend Hits £5bn: Barclays data shows almost half of UK consumers bought from Chinese e-commerce platforms (Shein, Temu, JD.com) in the past year, bringing total UK spend to nearly £5B annually. (Retail Week)

Supply Chain & Ethics

• Social Audits Failing Pakistan's Garment Sector: A report highlighted in Sourcing Journal reveals that traditional social audits are failing Pakistani workers, calling for a shift away from tick-box compliance toward mandatory human rights due diligence and binding agreements. (Sourcing Journal)

• GFA Examines Pay Equity in Türkiye’s Supply Chain: Global Fashion Agenda released Unpacking Pay Equity in Fashion: Türkiye, revealing a 15.6%–17.4% gender pay gap in manufacturing—driven primarily by occupational segregation rather than unequal pay for equal work. (Global Fashion Agenda)

• Human Rights Crisis in Bangladesh Garment Sector: Reports highlight compounding job insecurity and systemic labor repression in Bangladesh following political instability and factory closures, emphasizing how sudden order shifts harm low-wage workers. (Sourcing Journal)

Impact & Sustainability Reports

• Kuyichi Denim Proves Radical Honesty is Possible. Dutch brand Kuyichi Pure Denim released its Social Report 2025, setting a benchmark for radical transparency. Produced in-house by a team of 15, the report publishes raw supplier audit findings, open corrective actions, missed targets, and the limits of standard auditing. Kuyichi Social Report 2025.

Resale, Rental & Repair

• Urban Outfitters Partners with Reskinned. Urban Outfitters partnered with Reskinned to launch a UK mail-in take-back scheme. Customers trade pre-loved items for a £10 voucher, while Reskinned handles cleaning, repairs, and resale/recycling logistics—showing how outsourcing recommerce operations creates practical circularity for high-street retail. Read the full analysis on Retail Gazette.

• UN & Or Foundation Insights on Global Secondhand Trade: A new comprehensive analysis examining secondhand textile flows in West Africa (Ghana and Kenya) calls for investing in receiving country infrastructure and sorting transparency rather than outright import bans, emphasizing the need for mandatory quality disclosures before export. (Medium: The EU's Unsold Clothing Ban and What It Means for Africa)

• Mori Partners with Littleloop for Branded Resale: Babywear brand Mori launched a pre-loved trade-in service powered by Littleloop, allowing parents to return organic sleepsuits for store credit. (Retail Times)

• Salomon Expands Repair Service Across Europe: Salomon expanded its repair service (operated with United Repair Centre) across the UK, Germany, Spain, Italy, and the Netherlands, offering door-to-door repairs on any Salomon apparel or bag. (Suston Magazine)

• Depop Teams Up with Zara Larsson: Depop launched a global campaign starring Zara Larsson alongside a curated shop of items from her closet to engage Gen Z in wardrobe rotation. (TheIndustry.fashion)

• Kappahl Group Acquires Stake in Arkivet: Swedish fashion group Kappahl acquired a majority stake in curated secondhand retailer Arkivet to scale its physical/digital recommerce engine. (Kappahl Group)

• Whering Secures $7M Seed Round: Digital wardrobe app Whering raised $7M (co-led by eBay Ventures and Google AI Futures Fund) to develop AI styling tools and connect digital closets to resale platforms. (Global Textile Times)

• Fleek Raises $25M Series B for AI Wholesale Sorting: B2B secondhand marketplace Fleek raised $25M to scale its computer-vision model (Fleek Sort) for automated textile grading and wholesale matching. (The Next Web)

• eBay Acquisition of Depop Cleared: UK regulators (CMA) approved eBay’s $1.2B acquisition of Depop from Etsy. (Retail Gazette)

• reverse.fashion Secures Funding for AI Sorting: Berlin-based reverse.fashion secured additional pre-seed funding to scale AI-driven garment classification and Digital Product Passport integration. (Tech in Berlin)

• RWRK Studio Upcycles Hotel Linens: RWRK Studio partnered with Regenex and Super Laundry to convert discarded luxury hotel towels into streetwear collections. (Regenex)

Reports & Research

• Lindex Microfibre Study: A study of 100+ suppliers revealed that 54.4% have never discussed microplastics, yet 62% believe mitigation is feasible within 2 years if brands provide technical guidance. Read the pre-print findings: Assessing Microfiber Pollution in the Lindex Supply Chain (PDF).

• Cotton Ranked World's Most "Eco-Safe" Fibre: Cotton Incorporated survey of 7,000 consumers showed 85% view cotton as eco-safe (vs. 81% wool, 69% hemp), driven by growing microplastic awareness. (Just Style)

• Deloitte Sustainability Fusion™ Launch: Deloitte introduced an AI-powered framework mapping eco-investments to corporate metrics like risk mitigation and cash flow. (Deloitte Press Release)

• Retail Resilience 2026 Report: Retail Economics & Barclays report emphasizes that circularity is now a core commercial growth engine rather than a marketing tactic. (Retail Economics)

• Is Degrowth Necessary for Circularity?: A stakeholder study in Academia Environmental Sciences and Sustainability found 74% of industry experts agree true circularity requires absolute production volume reductions. (Academia.edu)

• BoF & McKinsey Luxury Report: The State of Fashion: Face to Face with Luxury Clients reveals that shared values and circular resale ("secondhand chic") now outweigh brand heritage for high-end consumers. (The Business of Fashion)

• Textile Exchange Cashmere LCA: The first comprehensive field LCA for cashmere evaluates soil health and community livelihoods alongside carbon footprint data. (Textile Exchange)

• Volans Report ("Time to Get Real"): Analyzes $33T in AUM to urge brands to move from internal metrics to active climate policy advocacy. (Volans)

• Price Overrides Ethics at Checkout for UK Shoppers: Zero100 research shows 68% of UK shoppers value ethics, but only 12% buy sustainable clothing regardless of cost, capping maximum willingness-to-pay premiums at 8%. (TheIndustry.fashion)

Which of this month's stories stood out to you most - or will have the biggest impact on your commercial planning?