By Corina Pons and Helen Reid
MADRID/LONDON (Reuters) -Zara-owner Inditex (BME:ITX), the world's biggest clothing retailer, has agreed to buy recycled polyester from a U.S. start-up as it aims for 25% of its fibers to come from "next-generation" materials by 2030.
As fast-fashion retailers face pressure to reduce waste and use recycled fabrics, Inditex is spending more than 70 million euros ($74 million) to secure supply from Los Angeles-based Ambercycle of its recycled polyester made from textile waste.
Polyester, a product of the petroleum industry, is widely used in sportswear as it is quick-drying and durable.
Under the offtake deal, Inditex will buy 70% of Ambercycle's production of recycled polyester, which is sold under the brand cycora, over three years, Inditex CEO Oscar Garcia Maceiras said at a business event in Zaragoza, Spain.
Garcia Maceiras said Inditex is also working with other companies and start-ups in its innovation hub, a unit looking for ways to curb the environmental impact of its products.
"The sustainable transformation of Inditex ... is not possible without the collaboration of the different stakeholders," the CEO said in a speech at the event.
The Inditex investment will help Ambercycle fund its first commercial-scale textile recycling factory. Production of cycora at the plant is expected to begin around 2025, and the material will be used in Inditex products over the following three years.
CAPSULE COLLECTION
Zara Athleticz, a sub-brand of sportswear for men, launched a capsule collection on Wednesday of "technical pieces" containing up to 50% cycora. Inditex said the collection would be available from Zara.com.
Some apparel brands seeking to reduce their reliance on virgin polyester have switched to recycled polyester derived from plastic bottles, but that practice has come under criticism as it has created more demand for used plastic bottles, pushing up prices.
Textile-to-textile polyester recycling is in its infancy, though, and will take time to reach the scale required by global fashion brands.
"We want to drive innovation to scale-up new solutions, processes and materials to achieve textile-to-textile recycling," Inditex's chief sustainability officer Javier Losada said in a statement.
The Ambercycle deal marks the latest in a series of investments made by Inditex into textile recycling start-ups.
Last year it signed a 100 million euro ($104 million) three-year deal to buy 30% of the recycled fibre produced by Finland's Infinited Fiber Co, and also invested in Circ, another U.S. firm focused on textile-to-textile recycling.
In Spain, Inditex has joined forces with rivals including H&M and Mango in an association to manage clothing waste, as the industry prepares for EU legislation requiring member states to separately collect textile waste from January 2025.
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