Large fashion companies operating in the European Union can no longer destroy unsold clothing, accessories and footwear under a new rule intended to reduce textile waste and promote more circular business models.

The prohibition entered into application on July 19, 2026, under the EU’s Ecodesign for Sustainable Products Regulation, commonly known as the ESPR.

The measure directly affects fashion brands, retailers, marketplaces and e-commerce companies that manage excess inventory, discontinued collections and returned products. Instead of sending usable goods to landfill or incineration, affected businesses must prioritize resale, donation, repair, refurbishment, remanufacturing or recycling.

For the fashion e-commerce sector, the regulation transforms returns and excess inventory from a cost-management issue into a compliance priority.

What does the EU ban cover?

The prohibition applies to unsold:

• Clothing
• Clothing accessories
• Footwear
• Returned products within these categories

Large companies are affected from July 19, 2026. Medium-sized enterprises are expected to be subject to the same prohibition as of July 19, 2030, while micro and small businesses are currently exempt.

The rule covers products that were never sold as well as returned goods that remain suitable for resale, repair or reuse.

Companies must follow the EU waste hierarchy. This means prevention and reuse should be prioritized before recycling, incineration or disposal.

Discount sales, outlet distribution, secondary marketplaces, donation programs and repair services may therefore become increasingly important routes for unsold stock.

Why has the EU introduced the measure?

The European fashion sector generates significant waste before many products are ever used.

According to figures referenced by the European Commission, between 4% and 9% of textile products placed on the European market are destroyed before use. This represents an estimated 264,000 to 594,000 tonnes of textiles annually.

The Commission also estimates that destroying unsold textiles generates approximately 5.6 million tonnes of carbon dioxide emissions every year.

These figures include more than the environmental impact of disposal. Every destroyed product also represents wasted raw materials, water, energy, transport and labor.

The prohibition is intended to discourage overproduction and encourage brands to improve forecasting, stock management and product circulation.

Are any exceptions allowed?

Products may still be destroyed in limited and justified circumstances.

Possible exceptions include goods that:

• Present a health or safety risk
• Are contaminated
• Are damaged beyond repair
• Are counterfeit
• Infringe intellectual-property rights
• Cannot reasonably be reused or recycled

However, high storage costs, reduced profitability or the difficulty of reselling a product are not sufficient reasons for destruction.

Businesses using an exception must be able to prove why destruction was necessary. This may require safety reports, damage assessments, correspondence with donation partners or evidence that reuse and recycling options were unavailable.

Relevant documentation must generally be retained for 5 years to allow national authorities to inspect it.

Why the ban matters for fashion e-commerce

Online fashion retailers are particularly exposed because they normally process higher return volumes than physical stores.

Customers often order several sizes, styles or colors and return the products they do not want. Returned goods may arrive with damaged packaging, missing labels or signs of handling. Seasonal products can also lose value while they move through the returns process.

In the past, some companies concluded that inspecting, cleaning, repackaging and restocking a low-value product cost more than disposing of it.

That calculation must now include regulatory compliance.

A product cannot be destroyed simply because processing it is expensive. Retailers must determine whether it can be resold, repaired, donated or recycled before considering disposal.

This increases the importance of fast returns processing. The longer a product remains in a returns center, the more likely it is to lose commercial value.

Reverse logistics becomes a compliance function

Retailers need visibility over what happens to every returned or unsold product after it reaches a warehouse, fulfillment center, store or logistics partner.

A compliant reverse-logistics operation should be able to direct products towards:

• Immediate resale
• Cleaning and repackaging
• Repair or refurbishment
• Outlet or secondary-market sale
• Donation
• Recycling
• Documented destruction as a last resort

This will require better product grading and stronger links among order management, inventory, and warehouse systems.

Companies should also review contracts with fulfillment and waste-management providers. Agreements should clearly explain who assesses returned goods, who approves disposal and who stores the evidence supporting each decision.

Outsourcing logistics does not necessarily remove the retailer’s regulatory responsibility.

Recommerce could benefit

The ban is likely to increase the supply of clothing and footwear available for resale.

Brands may expand official second-hand stores, outlet platforms, refurbishment programs and partnerships with recommerce marketplaces.

Other companies may use business-to-business liquidation networks to sell excess stock to authorized resellers rather than destroying it.

Luxury brands face a more complex challenge. Heavy discounting can weaken exclusivity, while uncontrolled liquidation may place products in unauthorized sales channels.

These companies may need to develop controlled resale programs, authenticated second-hand platforms or material-recovery systems that protect both compliance and brand value.

Better forecasting becomes essential

The best way to avoid problems with unsold stock is to produce and purchase more accurately.

Fashion businesses are likely to invest further in artificial intelligence, predictive analytics and real-time stock visibility.

Useful measures include:

• Smaller initial production runs
• Faster replenishment cycles
• Improved local demand forecasting
• Earlier markdowns
• Stock transfers between markets
• Pre-orders
• On-demand production
• Better analysis of return reasons

Retailers that identify weak demand early can redirect stock while it still has commercial value.

The regulation may therefore favor companies with flexible supply chains over businesses dependent on large advance orders and long production cycles.

Marketplaces must clarify responsibility

Online marketplaces may also be affected when they own inventory, provide fulfillment services or determine how returns are processed.

They must establish who owns a returned product, who decides whether it can be resold and who is responsible for documenting any disposal.

Marketplaces may need to revise automatic destruction settings and provide sellers with clearer resale, donation and recycling options.

This is especially important for fulfillment programs in which merchants have limited control over how returned or aging stock is handled.

What should retailers do now?

Affected businesses should immediately review every point at which returned or unsold stock leaves their inventory.

Priority actions include:

• Suspending automatic destruction policies
• Establishing product-grading procedures
• Creating resale, repair, donation and recycling routes
• Requiring approval before destruction
• Retaining evidence for every exception
• Reviewing logistics-provider contracts
• Training warehouse and returns teams
• Improving inventory and returns data
• Identifying approved resale and recycling partners

Companies should also prepare for disclosure obligations that require greater transparency about the quantity and types of unsold goods they discard.

A major change for European fashion

The ban on destroying unsold clothing and footwear is part of the EU’s wider effort to make textiles more durable, repairable and recyclable.

For fashion e-commerce, its impact will be felt across inventory planning, returns management, fulfillment, resale and logistics.

Unsold products can no longer be treated as disposable stock. They must be tracked and directed towards the most valuable compliant alternative.

Businesses with accurate forecasting, efficient reverse logistics and established resale networks will be best positioned to adapt.

For the European fashion industry, destruction is no longer the simplest answer to excess inventory.

The post EU ban on destroying unsold clothing and footwear enters into force appeared first on Cross-Border Magazine.

Vinted has closed a new financing round that boosts its valuation. The second-hand marketplace has closed the secondary share sale for €340 million at a valuation of €5 billion. In 2021, during Vinted's last funding round, the company had a pre-money valuation of €3.5 billion.

Thomas Plantenga, CEO of Vinted, said: "We are delighted to welcome new investors with the expertise to support us in our next phase of growth while continuing to benefit from the experience of our long-term backers. TPG and our other new investors share our vision: to make pre-owned vehicles the first choice worldwide. We are also delighted that this share sale rewards our employees for their dedication to making Vinted successful." 

The transaction was led by U.S.-based TPG Group, a global alternative asset manager, and other investment funds, including Hedosophia, Baillie Gifford, Invus Opportunities, FJ Labs, Manhattan Venture Partners, and Moore Strategic Ventures. The transaction validates Vinted's opportunity and progress in developing and growing the secondhand market globally. It also diversifies the company's investor base with new expertise and rewards its employees and early investors for their contributions to Vinted's success.

Since the last funding round of the Lithuanian marketplace closed, it has increased its gross merchandise value (GMV) by more than 3.5 times and reached full profitability. In 2023, the company recorded 61% revenue growth and had a double-digit EBITDA margin. Vinted has become the European leader in its field, encouraging people to adopt new consumer habits. Today, more than a third (37%) of Vinted members say that second-hand clothes make up at least half of their closet.

Vinted's steady growth is due to its expansion into new markets

This growth has been made possible by Vinted's rigorous focus on ensuring its members get excellent value at the lowest possible cost. In the last year alone, Vinted's marketplace expanded into existing markets and launched into new markets, including Finland, Greece, and Croatia. The company also launched a new verification service to help members exchange luxury and designer fashion items more securely. This feature is now available in 10 countries. 

In recent weeks, Vinted has begun implementing a new category for electronic products. The company has expanded its shipping business in the Netherlands, Belgium, and France. Vinted's payments business has acquired an EMI license and is working on solutions to improve how members transact on Vinted. 

Andy Doyle, partner at TPG, said, "We have seen consumers increasingly choose second-hand items as a key part of their wardrobe, as sustainability and flexibility have become priorities for many people. Vinted's customer focus, leading product expertise, and sophisticated logistical approach have made this market accessible to a broader population. We are excited to partner with Thomas and his team of world-class operators and to count Vinted among our growing portfolio of leading European technology companies."

The post Vinted valued at €5 billion after a successful European expansion appeared first on Cross-Border Magazine.

SHEIN launched "SHEIN Exchange", an online thrift store for consumers to buy and sell used SHEIN products.

The project was born, as explained in the press release, when SHEIN fans started asking on social networks to create a space to sell products. 

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Therefore, the goal of SHEIN Exchange is to meet the community's demand by providing a unique destination for customers to become active participants in circularity and promoting the benefits of buying second-hand clothing versus buying new.

"At SHEIN, we believe it is our responsibility to build a fashion future that is equitable for all while accelerating solutions to reduce textile waste," said Adam Whinston, Global Head of ESG at SHEIN. "The goal of SHEIN Exchange is to make reselling as easy and convenient as buying something new while igniting a cultural movement of circularity within our own SHEIN community. We call on our community to mobilize and keep the clothing they have already owned in circulation for as long as possible. By leveraging the reach and influence of our growing community, we believe that resale purchases can become the new normal in our industry."

An in-app SHEIN thrift store

The new section will also be available through the existing SHEIN app. With SHEIN Exchange, the resale process will be simplified to make it easier for sellers to list their items, as they will be able to do so directly from their "past purchases" section. This allows you to create a listing quickly and easily.

For now, the pilot project has been launched in the United States, although it could be extended to other countries in the future. SHEIN is developing the project as part of the firm's broader commitment to address current textile waste issues and build a more circular fashion future. 

By driving its community of millions of U.S. customers to buy or resell on SHEIN Exchange, SHEIN aims to influence and promote conscious consumption among its customers, ultimately prolonging the life of as many items as possible. 

Re-use, recycle, and resell  

This year, SHEIN also became a signatory to World Circular Textiles Day, a coalition of brands, suppliers, and other organizations that share a mission to shift the fashion and textile industry toward total circularity by 2050.

SHEIN Exchange was created in partnership with Treet, a leading U.S. resale technology platform that creates circular fashion experiences for a range of fashion retailers.

The post SHEIN Exchange: A brand new thrift store! appeared first on Cross-Border Magazine.