As one door opens, another closes.
Such is the case for Soex Group, the world’s largest collector of used clothing and textiles and the largest operator of retail takeback schemes. As the Parisian textile-to-textile recycling firm Reju joined the race to combat the industry’s prominent polyester problem, Soex began insolvency proceedings under Germany’s self-administration laws.
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According to the German publication EUWID, Soex—also known as I:CO, through which it operates takeback schemes for the likes of Levi’s and H&M—filed an application with the district court in Reinbek to open such proceedings. The court followed this application and appointed lawyer Matthias Wolgast from insolvency-preventing stabilization law firm Münzel & Böhm as provisional administrator, per EUWID.
Reports in Germany allege that Soex Processing Germany GmbH, Soex Recycling Germany GmbH and I:Collect GmbH are currently in the “preliminary stages” of self-administration proceedings, which is when “the debtor’s own management remains in charge of the administration of the debtor’s assets throughout the insolvency proceedings,” according to global legal services organization Mayer Brown.
Nearly 500 employees may be affected, according to specialist German publication Shoez.
“It’s deeply concerning to hear the news about Soex in Germany going into administration, but it’s not surprising,” said Alan Wheeler, the chief executive officer of the UK-based Textile Recycling Association (TRA). “If Soex ceases its operations, British and other used clothing businesses will be inundated with even more surplus stock. Businesses will be forced to close their doors and there is a real risk that textiles will go uncollected or have to be sent to incineration and landfill.”
Per Shoez, Soex filed for insolvency due to the collapse of traditional markets in Eastern Europe, combined with the pressures put on the market by Asian competitors and their excess capacity.
“Central to this is the rapid rise in collections and exports from countries in the Far East, particularly China, which is now the world’s biggest exporter of used textiles,” Wheeler said.
The solution? Government intervention, Wheeler suggested, stating the immediate implementation of an extended producer responsibility (EPR) scheme is crucial.
“The sector needs immediate support which could include help with business rates, energy costs, insurance, and relaxing red tape that prohibits the sector from recruiting staff from the EU,” he continued. “Also making additional warehousing space available could offer some breathing space for traders by allowing them to empty their warehouses and continue taking in supplies whilst other solutions are considered.”