Market Update: January 2026

At Vegan Fashion Repository, we keep our ears firmly on the ground, collecting and curating news and insights most relevant to the vegan fashion industry—particularly in material innovation, circularity, accountable sustainability, and consumer behaviour—at the end of every month.

Here’s the summary of the highlights of January 2026:

As the World Economic Forum Annual Meeting 2026 in Davos drew to a close, it was becoming painfully clear that we are not heading towards a new world order – we are already living in it. All key business themes circle back to AI and resilience; that is, how to effectively utilise AI to optimise everyday operations and how to build and maintain a business’s resilience. Source: McKinsey

For the vegan fashion sector, and sustainable and ethical fashion more broadly, the focus on both AI and resilience translates directly to addressing the persistent challenges of transparency and traceability. Megan Doyle’s article ‘The Forces That Will Shape Fashion’s Supply Chains in 2026’ on Vogue Business states clearly that the climate crisis – as evidenced by the extreme weather conditions and natural disasters of 2025 – is not merely a ‘sustainability target’ for anyone, but rather ‘a core business strategy’ to minimise sourcing and logistics risks. AI-powered traceability solutions could bring genuine change, not only in reporting but in identifying exposure levels and critical challenge areas, evolving from analytic tools to instruments of operational control. Source: Vogue Business

Textile recycling news

Amid the focus on ‘technology-driven growth’ and ‘resilience’, the circular fashion ecosystem reflects the complexity of its drivers. Sweden’s first large-scale textile sorting plant, Siptex in Malmö, is for sale after projected demand for sorted post-consumer textiles failed to materialise. The plant was ‘ahead of its time’, leaving too few buyers committed despite its strategic circularity value. Source: SVT

Overproduction makes early circularity crucial, even if commercial results lag. SOLSTICE, an acceleration project aimed at transitioning from linear models to circular regional ecosystems in the textile industry – focusing on four territories: Grenoble-Alpes Métropole (France), Berlin (Germany), Prato (Italy) and Catalonia (Spain) – launched in May 2024 and has shared mid-project results: a uniform approach to circularity is ineffective. Each territory operates within a distinct economic and infrastructural context. The project demonstrates that moving to a circular textile industry requires more than a single solution; it demands better data, consumer support, and advanced sorting and recycling technologies working in concert. Source: Textile Platform

Also in Europe, the EU invested €6 million to pilot a deposit return scheme for textiles. TexMat rewards consumers for returning reusable and recyclable items, while notifying producers of waste management needs. Automated collection containers will sort items and capture material information through digital product passports, soon to be introduced EU-wide. Source: Circular Economy Europa

In related news, Recycling Europe Textiles urges the EU to set mandatory recycled content requirements under the Ecodesign for Sustainable Products Regulation (ESPR): 10% post-consumer content by 2025, rising to 25% by 2035, aiming to shift the industry towards a circular economy. Source: IOM3

According to Valuates Reports, the global clothing and textile recycling market is projected to reach $20.2 billion by 2031, growing at 5.9% CAGR. Solid business opportunities exist: eBay is expanding its Circular Fashion Fund across Europe and North America. Eight selected businesses will each receive $50,000 in funding, alongside mentoring to develop innovative solutions that extend the life of clothing and reduce textile waste. Since 2022, eBay’s Circular Fashion Fund has supported over 25 businesses, helping to overcome one of the biggest challenges facing fashion startups today: access to the right partners, introductions, and industry networks needed to scale. Applications for 2026 are open for all markets until March 8, 2026. Source: eBay

In the US, Reju announced its first U.S. industrial facility in Rochester, New York. Using proprietary tech from Technip Energies and IBM Research, Reju regenerates polyester waste into high-quality Reju Polyester, with a 50% lower carbon footprint than virgin polyester and multiple recyclability. Source: Reju

Circular and innovative material news

In a fortunate twist, Natural Fiber Welding, previously set to close MIRUM® in late 2025, is back with new investors. The focus is now on Pliant, a shoe sole from vulcanised tree rubber, produced without fossil-fuel binders. Vietnam partners will mould Pliant for shoes sold in 2027; Mirum is deprioritised. Source: Sourcing Journal

Circulose is gaining momentum after a strategic reset. Brand and supply-chain partnerships, including with Aditya Birla Fashion and Retail Ltd., link Circulose fibres to commercial viscose supply. Brands including H&M, Mango, Marks & Spencer, Bestseller, C&A and Filippa K have committed, moving circular materials from pilot to long-term adoption. Source: Just-Style

SPINNOVA®, a Finnish fibre innovator, is securing market confidence via a Fashion for Good-backed consortium. Tommy Hilfiger and German brand Armedangels have joined for future fibre applications. Portuguese spinner TEARFIL TEXTILE YARNS signed a letter of intent with SPINNOVA in January as well. Souce: Spinnova Group

Reuse and resale-related news

Vinted launches in the US, starting in New York. A recent survey (with GWI) found 42% of Americans unaware their old clothes have resale value, 50% stressed by ‘closet clutter’, and 70% of New Yorkers aged 25–34 own at least three unworn items with tags. Source: Fashion Network

LEVI’S STRAUSS launched the ‘Wear Longer Project’, teaching Gen Z to fix, customise and care for clothes. Starting in San Francisco, it targets 14–18-year-olds with plans to expand globally. Source: Levi Strauss

Louis Vuitton won a trademark case over upcycled handbags, amid luxury brands increasingly challenging unauthorised upcycling, customisation and refurbishment. Louis Vuitton has taken action in Korea and the US; Chanel, Nike and Rolex have pursued similar claims against unauthorised use of their trademarks. Source: The Fashion Law

New releases

Both Depop and WGSN published their 2026 Trends Reports: Depop’s The Edited Self and WGSN’s Top Trends for 2026 & Beyond. Sources: Depop, WGSN

Carbonfact released a guide on 30+ EU and US textile sustainability regulations coming in 2026, covering mandatory reporting, eco-design, and waste reduction. Key mandates include the EU ban on destroying unsold goods, stricter environmental claims, and California’s SB 253 for Scope 1 and 2 emissions. Source: Carbonfact

In resilience-related topic, The Business of Fashion published an Executive Memo: How to Cut Costs While Investing for the Future. Source: The Business of Fashion

Finally, Sven Smit, Chris Bradley, Nick Leung and Marc Canal (McKinsey Global Institute) released A Century of Plenty, examining 20th-century progress and a possible world of plenty by 2100, where everyone lives at or above today’s top 1–2% prosperity levels. The book evaluates economic feasibility, human capability, and willingness, alongside climate change and AI risks. Source: McKinsey Global Institute

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At Vegan Fashion Repository, we consult multiple sources and always cite them for transparency and traceability. Some we trust particularly and recommend wholeheartedly. For more sustainability- and circularity-focused fashion news, we strongly encourage you to follow Lydia Brearley (This Is Enkel).

Cheers!