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Textile market crash looms in 'overheated market'

The textile recycling market is financially “overheated” and needs to “reset” itself to avoid more industry closures and job losses, according to an industry organisation.

Textile Recycling Association (TRA) national liaison manager Alan Wheeler told MRW that opportunist businesses - fuelled by inaccurate views that textile recycling is a cash cow - have helped make the market unsustainable by offering unrealistically high prices to charities for textiles.

“People come into the industry because they see headlines about how much the textiles are worth and although they often have good intentions, they don’t understand the industry,” he said. “They don’t realise that there’s a difference how much it’s worth and profitability.”

He also said charities should stop chasing overly high prices for textiles from collectors, while collectors must stop offering inflated prices.

Five TRA members plus another well known textile collector have gone out of business in the last six months, with others likely to be making a loss.

Wheeler warned that the textile recycling market could crash if prices continue to be unsustainably high causing more business casualties and job losses.

Charities should consider asking collectors to commit to fixed term contracts, according to Wheeler.

“They should ask how collectors how they afford to offer those prices,” he said. “I suspect many would run a mile if they offered fixed contracts.”

The Charity Retail Association (CRA) said it was concerned that members had reported some companies that take non-saleable textiles from charity shops were delaying payments.

A CRA statement said: “We are working with the Textile Recycling Association on how best to support our respective members and ensure that their business risk is mitigated should there be further fluctuations in the market or cause for concern in this area.

“Our guidance also recommends that charity shops work with a member of the Textile Recycling Association which has a clear code of practice around duty of care and business practice.”

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