Bulgaria-based Eurotex is an experienced second-hand clothing sorter and exporter. In a close partnership with some leading companies in the used clothes business in Germany, Austria, the US and Canada, Eurotex offers more than 300 different articles of various grades. General manager Yavor Pandov speaks about establishing a wide network of trustworthy suppliers and an established system of quality control in grading used garments.
How big is the second-hand clothing market globally? At what rate is it growing?
The second-hand clothing market has been on a steady rise for the past few years. Before the pandemic hit, the resale market was on track to double. Now this growth may very well accelerate. Research shows that the global market size in 2019 was valued at $28 billion with an estimate to hit $64 billion by 2024.
How do you source used clothing from various countries? What is the process involved? What kind of tie-ups are required for these activities?
Working with good quality raw material is essential for the success of the second-hand clothing business. That is why it is important to establish stable relationships with reliable textile collecting companies. We need to constantly monitor and evaluate the quality of our incoming clothes, which is a more complex process than one would think. Based on these results, we see how the different raw materials perform and decide in what proportions to mix them.
What might seem strange is that we do not have contractual agreements with our suppliers. Everything is a matter of trust-the reason being is that elements like price, quantities, payment terms can be clearly determined, whereas quality of the product is always subjective and cannot be precisely defined, which makes the whole idea of a standard contract inapplicable.
On the other hand, the trade and transport of unsorted clothing is strictly regulated by the EU legislation as it is considered as waste. Both collectors and sorters have to fulfill the legal requirements and the environmental standards.
We also have our own textile collection activities locally and we plan to expand them.
On an average, how much of used clothing is sourced and resold by you annually? How much is the target set for next two years?
Right now, we manage to keep the level of the processed used clothing above 12,000 tonnes per year. Our initial plans were to reach a capacity of 18,000 tonnes in 2023. However, it is safe to say that in the context of these uncertain times, we are very cautious with any long-term planning and put more focus on being more flexible and adaptable.
What kind of economic, social and environmental benefits does this entail?
The growth of the industry has created a lot of new jobs all throughout the different aspects of the business- collection, sorting, wholesale and retail. For certain regions of the world, used clothing is the only affordable option for people to buy clothing. However, the most significant benefit that this industry brings to society is its environmental impact. By substituting production of new garments, it helps to reduce carbon emissions, save virgin materials, water and energy, and reduce waste.
How popular are second-hand clothes with consumers? Have you done any market study regarding this?
Globally speaking, second-hand shopping has grown tremendously over the past few years and the pandemic has only accelerated the shift of the purchasing habits of many consumers towards this more economically and environmentally viable option. Young shoppers are adopting second-hand fashion faster than any other age group with Gen Z leading in growth ahead of Millennials by a margin.
Celebrities demonstrate predisposition to reuse of clothing and 70 per cent of all consumers agree that addressing climate change is more important now than ever.
As for the local Bulgarian market, our latest research from 2020 showed that 89 pe cent of the people have visited secondhand clothing stores and 30 per cent of them buy every month. The dominant consumer perception for second-hand clothes is that they are "cheap", followed by "top brands at affordable prices", "treasure hunt", and "waste reduction".
Which are some of your business partners in the second-hand clothing market?
On the supply side, these are mostly companies from western part of Europe and the US operating textile collection bins. On the sales side, we serve more than 5,000 customers worldwide ranging from large importers and distributors to very small retailers.
Which are the buyer countries?
Currently we deliver to more than 30 different countries, most of them being in Africa and Eastern Europe. Pakistan is the biggest importer in Asia. Chile and most countries in Central America are also established markets.
How was Eurotex created?
The company was founded in 2000 and it started with a small retail shop. Luckily at that time there was hardly any competition, and the results quickly exceeded expectations. Approximately six months later, on a trip to the Netherlands to source used clothing, I had the chance to meet someone who helped, advised and supported me during the process of developing the company. He turned out to be our main supplier for the following 15 years and was the person who played a major role in the success of the company during its first several years.
How has the pandemic impacted your business? What are some of the patterns you have observed?
Over a period of one year, things moved from one extreme to another. The immediate impact after the first lockdowns in 2020 were that sales in all markets ceased, while at the same time collections of raw material reached record high levels, as many people were forced to stay home and obviously used that time to clean their wardrobes. The inventory volumes became such that most companies needed to rent extra warehouse space, which increased their storage expenses during times of almost no incomes.
The current situation is at the opposite side of the spectrum. There is a serious shortage of raw material, that has forced some sorting companies to temporarily cease operations. Probably, the reason for this is that during the past 12 months people significantly reduced their clothing shopping, which left them with less unwanted clothes to be disposed of.
In addition, one of the main problems which we faced every day during the pandemic was the absence of a large part of the staff due to illness or restrictions related to the measures against covid-19. As our business is very labour-intensive, this caused us serious problems with the planning.
What are the challenges you face in your day-to-day operations?
The biggest challenge probably is maintaining a consistent quality of the products. Determining how fashionable each piece is, how valuable is its brand and defining its condition on a scale from 1 to 5 is always very subjective. This requires a lot of training, quality control and attention to detail.
Following the pandemic, some new challenges also emerged shortage of raw material, ridiculously high ocean freight rates and shortage of equipment/containers. However, we expect those to be temporary.
What are your future goals?
Currently, our main goal is to implement new recycling technologies that would allow us to deal with the "not good for reuse" part of the material. Sooner, rather than later, we expect most textiles, which are not suitable for reuse, to be "fibre to fibre" recycled. Another important priority is expanding our distribution network in new markets. (PC)
This article was first published in the April 2021 edition of the print magazine.
Published on: 15/04/2021
DISCLAIMER: All views and opinions expressed in this column are solely of the interviewee, and they do not reflect in any way the opinion of Fibre2Fashion.com.
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