Value Cost Data Cost Data

NOT AVAILABLE

4.3.3 Value Cost Data Cost Data

In order to compare the data collected during the longitudinal study with IGC with UK averages, data from Letsrecycle.com (2016) and WRAP (2016) was used to provide a broader view on the used textile market in the UK. For comparison, textile bank and charity shop prices have been used as these are the two most widely collected forms of textile price data available.

These two categories are defined by each data source as follows:

‘Textile banks – this reflects the amount that may be paid to a local authority or a waste management company, usually by a collector for material from textile banks. The payment may be amended if the local authority has to pay a bank hire fee or an element of the collection costs and if a donation is made to a charity.’ (Letsrecycle.com, 2016b)

‘Shop collections – this price indicates the amount which may be paid by a collector to a charity shop for clothes the shop has not sold to the public directly. Prices vary on content from poorer quality material through to clothes and leather items.’ (Letsrecycle.com, 2016b)

‘Banks – the value that textile bank operators will pay to the bank beneficiaries such as the named charity or local charity when the banks are owned, sited, serviced etc by the operator.’ (WRAP, 2016b)

‘Charity shop - the value that a charity receives for charity shop clothing sold to merchants that collect the garments from the shop.’ (WRAP, 2016b)

133 Textile Bank Costs

Figure 30. UK average textile bank collection prices per tonne (letsrecycle.com)

Figure 31. IGC average textile bank collection prices per tonne

Comparing UK textile bank collection prices collated by Letsrecycle.com (2016) and WRAP (2016) to those of IGC throughout the three years of the longitudinal study (Table 13), it can be seen that collection costs for IGC fell by ~10% from 2013 to 2014, and ~35% from 2014 to 2015, as did prices reported by WRAP. Prices reported by Letsrecycle.com rose by ~10%

between 2013 and 2014, before falling by ~15% between 2014 and 2015. Variances in data

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sources may explain the different prices reported by both Letsrecycle.com and WRAP, indicating the instability and fluctuations present in the market for extant textile collectors supplying the data. Prices reported by both Letsrecycle.com and WRAP were significantly lower than those paid by IGC for their textile bank collections, although by 2015, price differences between IGC and the national averages were much smaller. Falling prices impacted on overall costs for IGC by reducing the monthly cost of sourcing textile bank collections, despite collection volumes remaining high.

Table 13. Textile Bank Collection Prices Textile Bank

Collection Prices

IGC Letsrecycle.com WRAP

January 2013 £508 per tonne £300 per tonne £400 per tonne January 2014 £462 per tonne £325 per tonne £370 per tonne January 2015 £301 per tonne £275 per tonne £258 per tonne

Figure 32. IGC total textile bank collection costs (£) 0

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135 Charity Shop Costs

Figure 33. UK average charity shop collection prices per tonne (letsrecycle.com)

Figure 34. IGC average charity shop collection prices per tonne

In Table 14 comparing UK charity shop collection prices to those paid by IGC over the three year study it can be seen that for both IGC and according to Letsrecycle.com prices fell following a similar pattern, reducing by ~10% between 2013 and 2014 and by ~20% between 2014 and 2015. Price data provided by WRAP shows a different scenario of ~10% rise in charity shop prices between 2013 and 2014, followed by a steep drop of ~30% between 2014

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and 2015. Again, differences may be due to the different data sources for Letsrecycle.com and for WRAP. Although prices for IGC fell over the three years, charity shop collections increased in volume resulting in an increased monthly expenditure by IGC on this source. An increased prevalence of charity shops on UK high streets plus an increase in unsold stock due the falling quality of original donations may account for these findings.

Table 14. Charity Shop Collection Prices Charity Shop

Collection Prices

IGC Letsrecycle.com WRAP

January 2013 £565 per tonne £555 per tonne £410 per tonne January 2014 £527 per tonne £510 per tonne £450 per tonne January 2015 £420 per tonne £400 per tonne £328 per tonne

Figure 35. IGC total monthly charity shops goods in costs (£)

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137 Collection Costs

As can be seen in Figure 24, average collection costs across all sources for IGC also fell over the three years, from nearly £600 per tonne in January 2013, to just under £500 per tonne in January 2014, down to just over £300 per tonne in January 2015. As shown in Section 10.1.8 of Appendix A (page 289 to 330), for IGC, textile bank collection volumes remained fairly stable with a slight increase over the three year study. Charity shop volumes also increased significantly, however for all other textile collection sources volumes fell, indicating that for IGC, textile banks and charity shops remain as the two main sources of goods in.

Collection Volumes

Reports on collection volumes between case study companies reflect the varying success and scope of each strategy. For example TRAID report collection of ~200 tonnes per month, the lowest volume of the three case study companies. This is collected from a network of ~1500 textile banks, 11 charity shops and various commercial collectors in London and the South East, as well as Bristol and Oxford. LMB however report collecting ~740 tonnes per month from local authority recycling centre banks and textile banks around the UK, mainly in London and Norfolk. Geographically the two companies cover similarly sized area for collection, however the strategy of local authority waste contracts yields a much higher volume for LMB.

IGC collect volumes of ~360 tonnes per month, mainly from ~200 textile banks and charity shop collections in the North and some in the Midlands. Collections were also reported to be subject to seasonal patterns, with summer months the busiest and winter the quietest time of year.

138 Sales

Figure 36. IGC Average Sale Price per Kilogram

Sales of sorted and graded clothes and textiles were sold in bulk quantities by all the case study companies, often filling shipping containers for wholesale export orders to Africa and Eastern Europe, as well as Pakistan. This is confirmed by a report from WRAP (2016c) which cites African countries such as Ghana and Togo, EU countries such as Poland and Hungary, and Asian countries such as Pakistan as the UK’s main export market for used textiles. UK retail and wholesale establishments were also supplied by and owned by the case study companies. These ranged from charity shops, vintage boutiques, vintage wholesalers, and wiper manufacturers. Seasonal patterns reported in sales indicated that for IGC the busiest months were September, October and November, especially for the African market. The closure of Eastern European markets during the summer months links to a net loss each July for IGC, as well as a build of supply and stored inventory. Constant change in the sector from factors such as seasonal fluctuations, weather patterns and international market responses is compounded by pressure on sales prices, creating overall instability in highly uncertain markets.

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Figure 37. Value per tonne of UK exports of used textiles

Shown in Figure 27, sale prices fell over the longitudinal case study with IGC, however goods in costs also fell (Figure 28), leading to fluctuations in net profit and loss, as shown in Figure 29. Factors linked to these fluctuations are the cessation of more expensive door-to-door collection in December 2014 and the decrease in sales of unsorted textile bank product bales, indicating that textile bank collections were instead being processed to meet a demand for more specialised sorted and graded product categories. The demand for collections to be sorted into increasingly more specialised grades is an indication that collectors are being driven to continually review their product offerings in order to extract more value from collections. Both falling sales revenue and goods-in costs indicate that the market is in a state of decline, with no clear pattern of profit and loss each year. The price per tonne of UK exports of used textiles (Figure 37) indicates that the market has been in decline since 2013, when value peaked at £1,115 per tonne (WRAP, 2016c). Exports volumes fell throughout the first 11 months of 2015 due to difficult market conditions such as political instability in Ukraine and economic uncertainty in Poland and Lithuania (WRAP, 2016c). Falling values and volumes are a negative sign for an industry which seeks to divert waste away from landfill, creating both cost savings and environmental savings. Should sufficient value fail to be found in collected textiles and landfill become the main route for these items, the environmental consequences would further exacerbate current pressures on sustainability (WRAP, 2016c).

In order to prevent such outcomes it is more necessary than ever before to seek circular economy solutions to maximise the reuse, recycling and upcycling of unwanted textiles.

140 Optimisation

In order to optimise the collection and supply of unwanted textiles, decisions on the method used, its availability to the general public and its location will impact the volumes, quality and value of items received. Additional consideration such as affiliations and associations with other brands, charities and organisations should also be considered in order to reach and appeal to the widest selection of individuals. Identifying the most effective strategies to communicate with donators regarding used textile divestment will also support a strategy for increasing the yield and quality of items. Considerations such as understanding what information consumers require, how they most prefer to receive such information, how public perception of textile and clothing usage affects use and divestment behaviours and how important the factor of convenience is will provide a guiding framework for the most effective strategy in optimising clothing and textile collection. A declining profitability indicates the need for a wider range of sustainable end markets, such as domestic reuse and fibre-to-fibre markets for low grade textiles which are not suitable for the re-use (WRAP, 2016c).

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In document Circular economy fashion strategies (Page 178-187)