Recover’s Recycled Fibers Attract Goldman-led $100 Million Investment

As the fashion industry chases sustainable change, circularity should be a prime priority. By using recycled rather than conventional materials, brands can improve fashion’s environmental profile.

Recover, a producer of fibers using recycled cotton, has been supporting the industry in the shift from virgin to circular materials, and a recently closed $100 million minority equity capital investment will enable it to further scale up its circular solutions. The investment was led by the Sustainability Investing business within Goldman Sachs Asset Management, which invested along with Recover’s majority shareholder Story3 Capital Partners. Sources close to the transaction said the deal values Recover at more than $1 billion.

The family-owned materials science company has been in the business for more than 70 years. Now led by the fourth generation of the Ferre family, Recover has spent decades honing its proprietary mechanical textile recycling process to create longer-staple clean cotton at a competitive cost.

As part of the investment deal, Letitia Webster, managing director and chief sustainability officer of Goldman Sachs’ Asset Management Division, will be joining Recover’s board. “Recover is a leading disruptor in the apparel and textiles space with much-needed sustainable solutions grounded in materials science,” she said. “We’re excited to invest in Recover’s growth to accelerate scaled production and the continued development of its technologies.”

According to Story3 Capital Partners’ managing partner Peter Comisar, part of why his firm and Goldman Sachs are investing “significant capital” in Recover is the scalability of its solutions. “If we’re going to solve this problem, it’s got to be solved at scale. Otherwise you’re making no impact,” Ben Malka, operating partner at Story3 Capital Partners and executive chairman of Recover, told WWD.

Recover’s fibers have been used by major brands and retailers including Primark, Inditex, C&A, Revolve and Lands’ End. “What the brands and retailers are looking for, we believe, is a partner who has the credibility, authenticity, transparency, governance and principles that they can work with across the globe and across their supply chain,” Comisar said. As Recover expands, he sees it driving more brands to circular solutions, creating a bigger “call to action” for the industry. There is still much room to grow; only 7 percent of fashion executives in a recent Kearney survey said they currently have an “extensive” use of recycled materials.

“For change to happen at scale across the fashion industry, we need partnership and collaboration with innovators like Recover,” said Lynne Walker, director of Primark Cares at Primark. “As we increase the use of Recover’s recycled cotton fiber in Primark products, this investment will enable us to meet our pledge to make more sustainable fashion affordable to millions of customers.”

With this additional capital, Recover is planning to grow its production capacity and geographic footprint, targeting major apparel production areas. The Spain-based manufacturer currently has production hubs in Spain, Pakistan and Bangladesh, it will soon be opening a hub in Vietnam, and it plans to open facilities in Central America, Brazil, Turkey and India in the future. Speaking of the strategy of where to locate these facilities, Comisar said, “We believe from a carbon footprint perspective…we need to be close to where the waste is produced.”

Recover intends to expand its annual output of recycled cotton fiber from its current 30,000 metric tons (30 million kilograms) to 350,000 metric tons by 2026. A life cycle assessment verified by Aitex, Universitat de València and UNESCO found that this goal volume of recycled cotton would save 5 trillion liters of water each year.

Another investment area for Recover is innovation, including efforts to further optimize its end products so they are closer in line with conventional cotton. The company also plans to expand its waste streams, including utilizing more postconsumer waste.

Recover has been in textile recycling for decades, but around 2018, industry interest in circularity picked up. “[Brands and retailers] understood that there was…a real solution for them to apply for circularity and to be much more sustainable,” said Recover chief executive officer Alfredo Ferre. “The problem we had was just the volume, that we were so small that we only could do some capsule programs with some of these brands and retailers.” Story3 acquired Recover in 2020 and helped it grow its volumes.

On the consumer level, circularity and sustainability are growing purchase drivers. A 2021 McKinsey study of California-based consumers found that 54 percent anticipate buying more recycled apparel. “Millennial and Gen Z prefer and will opt for a sustainable anchored product as opposed to a non-sustainable anchored product,” Comisar said.

Recover sees the opportunity to become a “household” material or ingredient brand that consumers can trust. A number of Recover’s partners have begun co-branding garments with Recover hangtags to tell a sustainability story to the consumer. “To give the consumer the ability to be part of the solution, and to empower them to be part of the solution, I think is very important,” Malka said.

Looking ahead, Recover plans to keep innovating as well as collaborating with governments and NGOs to effect change. “The addressable market is so large, there’s so much to do,” Malka said. “We’re at the beginning of this.”

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