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Inside Shein’s plan to recycle ‘deadstock’ material into new clothing

The company wants to be ‘fully circular’ by 2050 but its emissions have increased by 52%.

Shein deadstock collection

There are “dozens” of women's dresses, shirts, skirts and other items in Shein’s first deadstock-inspired collection. Source: Shein

Shein has launched a new apparel collection made from "deadstock," the excess, unsold and leftover fabric inventory that are typically discarded by fashion brands.

Shein’s goal is to "rescue" 1 million yards of deadstock and turn it into clothing. It hasn’t set a deadline for delivering on that promise, but in 2023, it bought 21,792 square yards of the stuff. Shein calculates that this action saved 41 million gallons of water, eliminated 3,000 kilograms of chemicals and avoided the equivalent of 29 metric tons of carbon dioxide —the environmental cost of making the material from scratch.

Fashion causes 92 million metric tons of textile waste annually, because consumers are throwing away clothes more quickly after wearing them fewer times. It also has a heavy carbon footprint, estimated at 4 to 6 percent of annual global emissions — more than aviation. Shein, founded in 2008, has been under closer scrutiny by fashion sustainability experts since 2017, when it began its big push into the U.S. market. Among other things, their concern is that Shein’s low prices and hyper-fast new product cycle encourage unsustainable consumption and resource use — issues that the deadstock plan will not address.  

"One of the goals in our sustainability journey is to achieve a fully circular economy by 2050," said Caitrin Watson, director of sustainability at Shein, when the "rescued deadstock" milestone was announced in early May. "To meaningfully reduce emissions in the fashion industry we need to not only minimize our own waste, but collectively to eliminate the concept of waste altogether."

The fashion industry’s inventory problem

Deadstock comes in many forms, from fully sewn garments to bolts of unused material. The unsold inventory sent to landfills, burned or buried in warehouses each year is worth $288 billion, according to Queen of Raw, a company partnering with Shein on the project. Queen of Raw operates a digital marketplace that puts waste textiles back into commercial circulation.

"The companies holding the deadstock, which is the majority of traditional retail companies, they don’t have an avenue to use it," Watson said. "If we can be a rescuer of this deadstock fabric, we can test it in different styles and see what customers want to wear."

There are "dozens" of women's dresses, shirts, skirts and other items in Shein’s first deadstock-inspired collection. Seventy-five of Shein’s manufacturers are participating in their production, using rescued and recycled polyester, rayon, spandex and other materials sourced through Queen of Raw. Most of the fabric is sourced locally, near Shein's existing production facilities in China, according to Shein and Queen of Raw.

1 million new styles per year

Shein has been public about its goal but other brands are waking up to the value of deadstock in a circular strategy, said Queen of Raw CEO Stephanie Benedetto. "This is a great sustainable alternative to work with, finally, at a good price point," she said. Her company also counts Nike, Ralph Lauren and Cotapaxi as clients for its sourcing services.

Today, apparel sourced from deadstock accounts for a tiny sliver of Shein’s overall production. The company declined to disclose how many items it sells annually. One recent analysis estimates Shein introduces more than 1 million new styles in one year, dwarfing the output of older fast-fashion brands such as Zara.

"Shein is doing a great thing with this, because they are such a big platform and they are getting these items out to everybody," said Mel Dorey, a designer who frequently reuses fabrics, such as old duvet covers, in her fashions. Dorey contributed several pieces to Shein’s first deadstock collection. "It gets people thinking and talking," she said.

‘They make fast fashion look slow’

Traditionally, fashion houses and their designers work on a seasonal schedule, producing four collections per year consisting of a limited number of styles, to be sold en masse at retail.

That is not how Shein does it.

The privately held company, which could pull in close to $60 billion in sales for 2025, relies on an "instant fashion" sales model. Shein produces small 100- to 200-item batches of dresses, shirts, pants or other apparel. It scales production for items that take off, relying on data from its e-commerce technology to project what’s needed and where.

"They make fast fashion look slow," said Ken Pucker, professor of practice with the Tufts Fletcher School. "Their model is potent."

Changes in Shein’s internal processes

Shein’s existing on-demand model made it relatively straightforward to introduce deadstock, but it needed to adjust its quality control, design and production processes, Shein’s Watson told GreenBiz in one of several interviews.

The adjustments included:

  • Extra quality testing, especially for materials older than six months. That's to ensure color fastness and protect against degradation.
  • Cost screens to prioritize cheaper materials; most of the clothing in the new Shein Rescued collection is priced well below $20.
  • It takes about 1.5 months to create apparel using deadstock, a couple of weeks longer than Shein’s average. One reason is that designers need to see fabric samples before envisioning ways to use them.
  • Once an item is sold out, it might be more difficult to produce more without fabric substitutions. That's something that Shein will grapple with as it happens.

An early-stage emissions reduction strategy

Shein’s deadstock effort is one component of its nascent sustainability strategy, launched in April 2022. The pledge calls for Shein to reduce greenhouse gas emissions by 25 percent across its direct operations, energy and supply chains by 2030. So far, it hasn’t reported progress toward that goal: In 2022, Shein’s emissions increased by 52 percent

Meanwhile, Shein has pledged to source at least 50 percent of its products from "preferred" materials by the end of the decade, leaning heavily on recycled polyester, forest-safe viscose and surplus fabrics.

Shein’s critics remain unhappy

Shein has many vocal critics such as Tufts’ Pucker, who say the company’s low prices and hyper-fast new product cycle encourage unsustainable consumption and resource use. "It’s not just that it’s more polyester, chemicals and microfibers, it's the associated negative externalities that are unfunded and impact all of humanity."

Shein's method of delivering products one-by-one to consumers, often using air freight, is particularly damaging because the company's doesn't pay the same import duties as other apparel companies and transportation-related emissions can't be managed as easily, said Rachel Kibbe, CEO of circular fashion advisory firm Circular Services Group. Shein’s deadstock program "rings hollow" given that the company is flooding thrift stores with "low-quality" items that contribute to the industry’s waste challenges, she said.

"If Shein raised their prices, paid U.S. duties, were transparent about their data harvesting practices, and produced products that had transparent supply chains, better quality and value, there would be reason to believe that they meant to improve their footprint," Kibbe said. "Until then, it’s all window dressing."

Shein is preparing its 2023 sustainability progress report for release, said Watson. Meanwhile, the company in mid-May said it plans investments of at least $70 million across its supply chain to encourage more "responsible" operations and to address ongoing allegations of human rights abuses in Southern China, where the majority of its garments are made.

[Learn how companies are navigating the fast changing sustainability agenda and driving more impact with Trellis Network.]

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