Upcycling, a solution for companies' carbon and financial footprints

Is upcycling extending beyond its traditional mission of giving a second life to textiles? What if the introduction of automation into this practice paves the way for a symbiosis between ecology, economy, and strategy for businesses?

Since 2020, Losanje has asserted itself as a pioneer of French-made upcycling, revolutionising the way finished textile products, derived from unsold items or second-hand sources, are transformed. Initially focused on its own collections, the company has recently broadened its horizons, especially with major corporations, by incorporating automation techniques into a traditionally artisanal field. Through a successful fundraising campaign, Losanje has established a production process that is environmentally, economically, and strategically viable.

Simon Peyronnaud and Mathieu Khouri, co-founders of Losanje, share their insights into this process with FashionUnited and explore its financial implications for businesses.

Can you introduce us to Losanje?

Simon Peyronnaud: In 2020, Mathieu Khouri and I founded Losanje with the aim of offering an alternative solution to two major environmental issues in the textile industry. The first issue is the improper treatment of end-of-life textile products - unsold, downgraded, defective, or discarded second-hand items. There are numerous finished products, predominantly clothing, available and waiting for revaluation solutions. The second issue is the considerable CO2 emissions that the the textile industry produces. According to a study by Quantis & McKinsey, nearly 90 percent of these emissions are linked to the creation of fabric rolls, i.e., raw materials. Losanje's assessment is that there is a solution that addresses both problems: upcycling.

"Before the process introduced by Losanje, the cost of cutting in the production of recycled clothing represented between 25 and 35 percent of the final price, well beyond the standards of the traditional industry."

How do you approach environmental issues, and what does upcycling bring compared to recycling?

Simon Peyronnaud: Our approach to solving environmental problems focuses on the use of an existing resource, namely finished textile products – clothing, sheets, curtains, etc. – whether second-hand or unsold. Upcycling presents itself as a natural solution to these challenges, eliminating the value losses associated with other end-of-life product processing methods such as destocking, destruction, or shredding. Regarding recycling, while it is feasible for some pure fabrics, it becomes complex for the common mixed materials in clothing.

The difficulty lies in fibre separation. Additionally, even when recycling is achievable, it often requires adding virgin material to strengthen the recycled fibre, implying the continued production of new raw materials. On average, in recycled yarn, 30 to 40 percent of the fibres are recycled, with the rest being virgin material incorporated. That being said, we often collaborate with recyclers on large-scale projects to process the entirety of the available material.

How do you go about it, what is the upcycling process?

Mathieu Khouri: The starting point for upcycling is the existing raw material. We preserve the original material with few constraints related to it. Regardless of the initial composition of a given garment, whether it is 80 percent cotton and 20 percent polyester or 100 percent cotton, 100 percent polyester, etc. We directly cut into the material to create patches that will be subsequently reassembled. Our goal? Utilise nearly 100 percent of this available material and minimise losses.

Once assembled, the patches form a new upcycled product - clothing or accessory. The only new elements that constitute it are the buttons and zips, which we strive to eco-source and represent only 5 percent of the finished product. In the end, we achieve a new product with a low impact, as the CO2 emissions related to its production are reduced by about 90 percent, compared to the conventional method. For example, the production of a conventional T-shirt emits about twelve to thirteen kilograms of CO2, while an upcycled T-shirt emits only two to three hundred grams.

"Revaluing unsold items also addresses increasingly stringent regulatory constraints, particularly in France, where the legislation in force since 2022 becomes even more restrictive from this year onwards. Especially for players in the textile market. More and more of our clients are adopting upcycling due to this revaluation obligation, an imperative dictated by existing laws and regulations."

What do you actually do with the products that companies send you? What do you offer them?

Simon Peyronnaud: We operate on a project basis. Some partners want to revalue their end-of-life stocks, while others turn to us to develop an upcycled product from A to Z without having material, in which case we handle sourcing. Our process is divided into several phases. First, our design office works on defining the design, pattern-making, sourcing, assembly range,etc. Then comes the cutting, which we do in-house, thanks to an automated tool we specifically developed to process finished products. Next, for the making, we have several methodologies: in-house production or through a partner workshop, or the delivery of ready-to-assemble "logs" to a partner workshop of our client.

Ultimately, what sets Losanje's solution apart is its flexibility. It can be integrated into any production system, allowing our cuts to be assembled by various workshops worldwide. Whether in a social integration workshop in Nièvre or a workshop in Portugal, we can revalue all unsold and/or second-hand products to create new items. This is made possible through an intelligent automated cutting system, enabling a significant cost reduction in upcycling projects. The upcycling approach adds no complexity to the traditional production system of brands, ensuring a smooth and efficient transition.

And in terms of production costs for businesses, what are the differences between your process and, for example, recycling?

Mathieu Khouri: These are completely different costs because the product we will create and the methodology will not be the same. For example, if a men's fashion brand wants to revalue unsold jeans, if they recycle them, what they will end up with is thread or a new roll. What we propose is to directly recreate a new product with this material. Upcycling doesn't require breaking down the material, grinding it, making thread, weaving, dyeing, recutting, remaking a product. We will directly come in and cut inside. This doesn't necessarily mean it is cheaper because some steps are replaced by others.

Who is upcycling intended for, and which companies are currently showing interest in your process?

Simon Peyronnaud: When thinking about textile upcycling, one naturally considers the fashion sector. Indeed, brands are our natural clients, but they are not necessarily the ones who have entrusted us with the largest volumes. Very quickly, we realise that many companies have significant quantities of textiles. Groups such as La Poste, SNCF, retail, hotel groups, transportation companies, events…

There are thousands of companies in need of a textile revaluation solution. Last year, a significant project was carried out in collaboration with La Poste (the French postal service, ed.), involving the revaluation of four tons of vests to create 35,000 kits for employees. This project, in addition to demonstrating our industrial capacity, sends a positive message to our future partners, showing that upcycling can be economically attractive in terms of costs, especially when major players like La Poste commit to such large quantities.

"With the new environmental labelling requirements planned for the fashion sector, upcycling offers turnkey solutions to meet these imminent standards, enabling companies to adapt to environmental regulations while promoting an ecological approach."

Which other industries or clients have found financial interest in adopting upcycling?

Mathieu Khouri: An unexpected client was the Roland Garros tennis tournament, an example of an industry we had not initially considered. However, this turned out to be a natural fit, as events like this generate single-use textiles.

Do the financial performance of companies or the prices of the items reflect the energy and raw material saved through the upcycling process?

Simon Peyronnaud: In terms of environmental impact, upcycling offers exceptional performance. Its circular logic, along with the CO2 and water savings it allows, is a major asset for companies in terms of CSR. Regarding prices, it depends on various factors such as production quantities or the production location. However, our industrialisation of part of the upcycling process allows us to achieve costs comparable to those of the traditional industry. We are committed to making upcycling economically attractive, as its strategic and ecological benefits are undeniable.

Why isn't upcycling more integrated into the business model of companies?

Simon Peyronnaud: Historically, integrating upcycling into the business model of companies was challenging, firstly due to the long-dominant paradigm in the textile industry that was not designed for circularity, and also due to high costs. Losanje offers the first industrialisation solution for upcycling on a European scale, enabling large-scale projects. This industrialisation is evident in our technological processes, but also in our approach to projects from the perspective of the design office.

Losanje is the only design office specialised in industrial upcycling projects, with a track record of over thirty projects with very different specifications. Before our intervention, the cost of cutting in the production of upcycled clothing represented between 25 and 35 percent of the final price, well beyond the standards of the traditional industry. Losanje automates the cutting of finished products, thereby reducing costs and making prices comparable to those of the conventional industry. This automation positions cutting as a standard variable, eliminating its disproportionate economic impact.

What advantages does your process offer to companies, beyond the sustainable aspect, particularly commercial terms?

Simon Peyronnaud: For companies, what is truly interesting is our turnkey and flexible approach. Our solutions are not rigid or limited because upcycling, by nature, encompasses an infinite diversity of products and revaluation possibilities. Our teams are ready to adapt to any type of project, whether it is creating beach backpacks from diving suits or making jackets from jeans. We offer solutions tailored to every need. Upcycling also includes a strong narrative aspect for brands in terms of marketing. The story behind a product coming from unsold items from a few years ago constitutes powerful storytelling.

Can upcycling alleviate the legal and administrative pressure on companies, particularly by facilitating compliance with CSRD obligations for extra-financial reporting?

Simon Peyronnaud: Revaluing unsold items partly addresses increasingly stringent regulatory constraints, particularly in France where legislation in effect since 2022 will be more restrictive from 2024, especially for players in the textile market. More and more of our clients are adopting upcycling due to these revaluation imperatives, a necessity dictated by existing laws and regulations.

Textile waste management is a central issue aligned with the initiatives of the European Commission and the French government. Ultimately, our approach provides these companies with a solution tailored to regulatory constraints, but also offers a relevant solution from an economic and strategic perspective. It is not just an outlet but a genuine revaluation method that adds economic, strategic, and ecological value to the company that adopts this solution.

What about companies active in the fashion industry?

Mathieu Khouri: Upcycling offers a turnkey solution to meet the dual obligation of companies: environmental labelling and revaluation of existing items. Upcycling allows the creation of products with very low carbon emissions while revaluing products that are now prohibited from destruction. This enables companies to engage in a unique approach to address this dual challenge.

Overall, why is the transition to sustainable business practices beneficial for companies?

Simon Peyronnaud: I believe there is an imperative interest in driving the ecological transition of the sector because companies benefit from this transition in a dual manner. Firstly, there is a rapidly expanding market for eco-friendly products. The eco-responsible fashion market in Europe has seen an estimated annual growth of between 9 and 12 percent over the past five years.

Similarly, the second-hand market has experienced an exponential growth during this period, and upcycling is also emerging. In 2022, upcycling represented less than 1 percent of the second-hand market, but it is estimated to reach 10 percent of this market by 2026. It is therefore a rapidly growing sector, increasingly facilitated by technical innovations such as those offered by Losanje.

Moreover, companies are responding to a growing market demand for eco-responsible production methods. This is explained not only by environmental awareness but also by the rising consumer demand for these products. Thus, it is advantageous to reconcile economic performance with environmental performance—an approach that Losanje proposes without compromise on either. Companies have the opportunity here to distinguish themselves with notable environmental performance by offering the lowest carbon products in the market, aligning with the increasing demand for more sustainable business practices.

Will your process be exported?

Simon Peyronnaud: Very likely, yes! Especially since we are engaging with companies based in different countries in Europe, and we hope to offer our service to all these players. Our ambition has always been to democratise the practice of upcycling. It is natural for us not to confine our ambitions to the French territory and to provide the benefits of our industrial processes to an increasingly diverse range of clients.