Swedish textile recycler Renewcell said it has launched a strategic review to explore fresh funding options, after struggling to lock in sales of the material it produces.
The company has been under pressure since October, when a weaker-than-expected sales update sent its share price plummeting and prompted the abrupt replacement of its CEO. Sales remained low in October and are expected to be lower than previously anticipated in November as well, Renewcell said in a regulatory filing Monday.
How the company navigates its current challenges is being closely watched as a test case for bringing new and more sustainable material innovations to market. Renewcell counts among the first in a cohort of innovators looking to penetrate the fashion market at industrial scale.
While brands have said they want access to more recycled materials and even invested in the sector, demand continues to lag expectations. Renewcell said it’s in ongoing discussions with a number of customers to secure orders, but the timing of when those might materialise remains uncertain.
In the meantime the company said it is exploring options to secure fresh funding, including raising additional debt and seeking an equity injection through a rights issue or by targeting a financial or strategic investor.
Weaker-than-expected demand for Swedish textile recycler Renewcell’s first commercial volumes of recycled cellulose pulp has sent the company’s stock price plummeting and highlighted broader hurdles challenging efforts to lessen fashion’s environmental footprint.