Zara owner Inditex to buy recycled polyester from US start-up

(Corrects to ‘buy’ from ‘invests’ in headline and paragraphs 1-2)

By Corina Pons and Helen Reid

MADRID/LONDON (Reuters) -Zara owner Inditex (BME:), the world’s biggest clothing retailer, has agreed to buy recycled polyester from U.S. start-up Ambercycle, according to a document seen by Reuters.

As fast-fashion retailers face pressure to reduce waste and use recycled fabrics, Inditex will invest 70 million euros ($74.19 million) in buying Ambercycle’s recycled polyester made from textile waste. Polyester, a product of the petroleum industry, is widely used in sportswear as the fabric is quick-drying and durable.

Under the deal, Inditex will buy a “significant” portion of Ambercycle’s production of recycled polyester, which is sold under the brand cycora, over three years, according to the document.

Inditex confirmed that it reached a deal with Ambercycle but did not provide details. The clothing retailer aims to have 25% of its fibers from “next-generation” materials by 2030.

The Inditex investment will help Los Angeles-based 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.

Zara Athleticz, a sub-brand of sportswear for men, will launch a capsule collection this week of “technical pieces” containing up to 50% cycora, according to the document.

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.

The Ambercycle deal marks the latest in a series of investments made by Inditex into textile recycling start-ups.

Last year Inditex signed a 100 million euro ($104 million) three-year deal to buy 30% of the recycled fibre produced by Finland’s Infinited Fiber Company, and invested in Circ, another U.S. firm focused on textile-to-textile recycling.

In Spain, Inditex has joined forces with rivals including H&M (ST:) 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.

($1 = 0.9436 euros)