Over the past year, while updating the Vegan Fashion Repository Directory and monitoring developments across the industry, we have noticed a pattern that is becoming increasingly difficult to ignore: a growing number of vegan fashion brands are either closing entirely or quietly introducing animal-derived materials into their collections. This pattern has been further underscored by the recent announcement that Immaculate Vegan, one the most prominent platforms dedicated to vegan fashion, shut down on 31 March 2026 citing “external factors,” primarily the Trump administration’s tariffs that made it “financially impossible to continue trading.”
This observation — whether closing down or quietly introducing animal-derived materials — is not new to readers of our Vegan Problem series. In The Vegan Problem: Veganwashing, aka When “Vegan” Doesn’t Mean Vegan At All, we examined cases where brands marketed themselves as vegan while simultaneously selling products containing animal-derived materials, exposing the structural weaknesses in how vegan claims are communicated and verified in fashion.
In another article, The Vegan Problem: 5 UX/UI Design Mistakes That Hurt Vegan Fashion Brands (And How to Fix Them), we highlighted how poor digital experience and weak e-commerce design can directly impact conversion rates and business survival for vegan brands operating online. The broader structural difficulty of running a vegan fashion brand has also been explored in Why Is It So Difficult for a Fashion Brand to Go Vegan, which outlined the sourcing, operational, and economic challenges that brands face when committing to a fully animal-free supply chain.
Taken together, these investigations reveal an uncomfortable reality: the challenges facing vegan fashion are not limited to individual brands or isolated mistakes. They are structural.
In this article, we take a closer look at a question many readers and industry observers have been asking: why are so many vegan fashion brands disappearing — or abandoning their vegan commitments altogether?
The answer is not simple. It involves diving into consumer perception, material innovation challenges, market economics, digital strategy, and the evolving narrative around sustainability in fashion.
Below, we break down the key forces shaping this difficult moment for vegan fashion.
1. Lack of Consumer Trust in Vegan Materials
Many consumers still associate “vegan leather” with cheap synthetic materials like PU or PVC. Even when next-generation, plant-based or bio-based materials with plastic-free formulas exist, the perception problem remains. There is profound confusion between petroleum-based leather alternatives made from synthetics (PU, PVC) and bio-based alternatives made from a mixture of biomass and stabilizers.
While many bio-based alternatives still include synthetic stabilizers, the most advanced developers are now replacing them with regenerative components such as natural rubber and water-based PU. Recent technological advancements allow biomass content to reach as high as 89% (for example, Leap® by Beyond Leather).
A key issue is that many next-gen materials are still new to the market and known only to a small circle of specialists, so consumers cannot rely on decades of proven performance as they can with animal leather. Early-generation alternative materials faced quality issues (brittleness, poor abrasion resistance), and mainstream awareness has not moved beyond these outdated perceptions.
2. Fast Fashion Price Competition
Vegan brands often operate with smaller production runs, more expensive materials, ethical labor standards, and transparent supply chains. Meanwhile, fast fashion benefits from huge economies of scale, extremely cheap materials, aggressive digital marketing, and optimized supply chains.
Because of this, ethical brands simply cannot compete on price.
Even consumers who say sustainability matters often do not follow through in purchasing behavior, creating a large value–action gap. For example, the Conscious Consumer Report 2025 found that 76% of consumers identify as conscious shoppers, yet values-driven purchases account for only 38% of their buying decisions, illustrating the persistent “say–do gap” between attitudes and actual purchasing behavior. (Source: Public Inc. & Ipsos, Conscious Consumer Report 2025).
3. UX/UI and Digital Experience Gap
Fast fashion companies have huge and specialized UX teams, data-driven conversion optimization, advanced personalization, and seamless checkout and returns. Many ethical brands are run by small teams, juggling multiple roles, and often struggle with slow websites, poor mobile experience, unclear product information, and weak visual merchandising.
In e-commerce, this dramatically affects conversion rates. Customers often abandon ethical brands simply because the shopping experience feels inferior.
4. Sustainability Narrative Overshadowing Animal Ethics
The fashion industry conversation has shifted strongly toward climate and circularity, sometimes sidelining animal welfare. This creates pressure for brands to adopt materials like recycled and/or regenerative wool, recycled cashmere, and silk – materials alternatives that still derive from animals.
As a result, some formerly vegan brands begin incorporating animal fibers to align with the dominant “natural = sustainable” narrative, even if it contradicts vegan principles and is misleading at best — the true emissions and resource use of “natural materials” is anything but sustainable.
Vegan Fashion Directory updates already show this trend, where brands introduced wool or silk and had to be reclassified.
5. High Cost of Next-Generation Materials
Many next-gen materials are not yet produced at industrial scale. This means there are higher minimum order quantities, limited suppliers, unstable pricing, and limited color or texture options.
Some material startups are struggling financially. For example, Bolt Threads, the company behind Mylo mushroom leather, halted operations due to funding challenges and inflation pressures, despite partnerships with major brands. Many prominent startups have failed to scale, which has damaged both consumer and investor trust in the category1.
When material startups fail, brands relying on them suddenly lose supply.
6. Changing Investor Priorities
Sustainable fashion startups often struggle to attract sustained investment.
Recently, investors have increasingly concentrated venture capital in artificial intelligence, which has made funding more competitive for startups in other sectors, including material innovation and sustainability-focused businesses. For example, AI captured a record 37% of global venture capital funding in 2024, reflecting the growing dominance of the sector in venture investment2.
For material innovation startups, this creates problems such as the inability to scale production, difficulty funding marketing, and inability to weather economic downturns.
7. Inflation and Cost-of-Living Crisis
Economic conditions have played a major role.
Inflation and broader economic uncertainty have increased operating costs for fashion companies while simultaneously weakening consumer demand. At the same time, surveys show many consumers are reducing spending on discretionary categories such as clothing and footwear, or trading down to more affordable alternatives3.
Recent developments further illustrate how fragile the current environment has become. The closure of Immaculate Vegan in March 2026, reportedly driven in part by Trump administration tariffs affecting international trade, highlights how external economic and political factors can quickly make it financially unsustainable for small, mission-driven businesses to operate.
This hits ethical brands hardest because their margins are already thinner and they cannot cut costs without compromising ethics.
8. The “Ethics Alone Doesn’t Sell” Problem
Many founders believe ethics will drive purchasing decisions. In reality, sustainability rarely creates desirability by itself and consumers still buy primarily based on style, brand identity, and trend relevance.
Ethical positioning alone cannot sustain a fashion brand. Brands that fail to build a strong aesthetic or cultural identity risk operating as “The Virgin of All Sectors” and will ultimately struggle or even close if they do not make their ethics desirable. Fashion, after all, is about creating desire.
9. Marketing and Visibility Challenges
Fast fashion brands dominate search results, influencer marketing, paid advertising, and algorithmic discovery.
Vegan brands are often small, with limited marketing budgets, weak SEO, and little algorithmic visibility. Additionally, search interest at the intersection of veganism and fashion is limited, leaving brands to rely on organic discovery — a business challenge that requires constant and costly visibility efforts, many of which small brands cannot sustain.
This makes them difficult to discover even for consumers who want to support them.
10. Supply Chain Complexity
Producing vegan products can be more complex than conventional production; alternative materials may require specialized manufacturing, factories may be unfamiliar with them, and minimum order quantities can be high. This increases real challenges for small brands striving to maintain a transparent and ethical supply chain.
11. Founder Burnout and Strategic Pivoting
Running an ethical fashion startup often means long hours, low pay, constant financial stress, and a mix of activism and business pressure. Founders typically wear as many hats as operations require, yet still struggle to meet common business objectives.
Eventually, after years of struggle, some founders pivot to other industries, start new creative projects, or step away from entrepreneurship altogether.
12. Lack of Exciting Design
Another issue that is rarely discussed openly is that many vegan fashion brands produce designs that are very plain and not particularly exciting.
Some brands prioritize ethical messaging so strongly that aesthetic experimentation, bold design, or strong brand identity becomes secondary. As a result, collections often lean toward minimalist basics or neutral styles that may appeal to a small niche audience but struggle to compete with the creativity, trend responsiveness, and visual impact of mainstream fashion brands.
Because fashion remains a highly emotional and aesthetic purchase category, consumers often choose products that inspire them visually, even if they support ethical values in theory.
A Deeper Structural Issue: Vegan Fashion Is Still a Niche
The challenges outlined in this article highlight a difficult truth: the survival of vegan fashion brands depends on far more than ethical intention. Consumer perception of materials, the dominance of fast fashion pricing, limited access to investment, and shifting sustainability narratives all create structural pressures that many small brands struggle to withstand.
At the same time, there is a deeper structural issue: vegan fashion is still a niche market. The number of strictly vegan consumers remains relatively small, which means that most brands cannot rely on this audience alone. To survive, vegan brands must also attract non-vegan customers.
This is why the brands that often succeed position themselves as strong fashion brands first, with vegan materials as part of their identity rather than the sole focus. Examples include JW Pei, Zhivago, and Lamoda, which have managed to reach broader audiences beyond the vegan community. As the industry evolves, the future of vegan fashion will likely depend not only on ethics, but also on design, innovation, and the ability to compete in the wider fashion market.
The purpose of The Vegan Problem series is not to discourage progress, but to identify structural weaknesses of the budding vegan fashion industry. By uncovering uncomfortable patterns, we hope to contribute to a more resilient and transparent vegan fashion ecosystem — one capable not only of surviving, but of shaping the future of fashion itself.
- Boston Consulting Group & Fashion for Good – Scaling Next-Generation Materials, 2025 ↩︎
- CB Insights ↩︎
- Business of Fashion ↩︎
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