Frankfurt's Zeil is one of the highest-grossing shopping streets in Germany – and its face is changing every day: many big-name brands and fashion retailers have gone bankrupt, some are closing branches or at least downsizing: Galeria Karstadt Kaufhof, Esprit, Peek and Cloppenburg Goertz, Reno, and finally Hallhopper. Companies operating primarily in the mid-price segment have been hit hard. The situation is different in the lower and upper price segments: discount brands are the winners of inflation, and luxury brand customers are not affected by the current price increases.

“Brands have to champion a certain lifestyle, appeal to a certain group and elevate their personal image,” says Achim Berg, a fashion industry expert at management consultancy McKinsey. “You can only survive if you keep reinventing yourself and not forgetting your customers.” In principle, fashion is accelerating, but at the same time the demand for sustainability is growing.

Interest in sustainable fashion is on the rise

The fashion industry currently accounts for around ten percent of global greenhouse gas emissions. At the same time, more and more people are becoming interested in sustainable fashion.

In one study, environmental organization Greenpeace highlighted the growing awareness of a more sustainable approach to fashion: in 2015 adults in Germany had an average of 95 items in their wardrobe, and by 2022 there will be just 87 items. 340 million items of clothing are sold annually in Germany.

Production returns to Europe

The European Commission also aims to make textiles more durable and recyclable by 2030. Production conditions are subject to stringent targets. According to McKinsey's industry analysis, more than half of officials in the fashion industry want production to be more localized and easier to manage.

Apart from Poland and Romania, the textile industry in Portugal is currently very popular, also because the country has invested heavily in the sector, said Berg. “In addition, there is well-trained specialized staff and a low minimum wage of 887 euros per month.”

The textile boom in Portugal

Business thrives around the city of Porto in Portugal. The industry provides its research and innovation center here. Current recipe for success: sustainability, waste or waste recycling.

An example is the textile producer Valerius 360. The company's business model: Valerius obtains seven tons of scrap fabric per day from a local textile company. What used to end up in the trash is chopped up here and processed into a new thread. “We have almost no cotton production in Europe. We have to get everything from other countries. Here in this production we can make yarn from recycled fabrics, so we are less dependent,” says director Ana Tavares.

Can fashion be completely unsustainable?

One of the most popular German sustainable fashion brands that Valerius works with is armangel. Kataya Crook is in charge of the sustainability strategy. She of all people says sustainability and fashion are not mutually exclusive: “Every item that enters the closet is an additional burden on the environment. It is very important that you make clothes responsibly, but it is also important how much we consume.”

Less is more: this Cologne-based company has been making fashion for 13 years. It releases four collections a year. This clearly sets Armangels apart from so-called fast fashion companies, which release up to 24 collections a year.

“Fast fashion” also wants to go to Europe

But many “fast fashion” brands are also planning to bring some of their products back to Europe. Even if it's not for sustainability reasons. “Brands can bring new collections to stores more quickly and save on transportation and storage costs,” says industry expert Achim Berg. This is not possible if you have production in Southeast Asia or China.

Sustainability and proximity to sales markets in Central Europe: two trends that led to the prosperity of the textile industry in Portugal. This boom is likely to continue – or even increase. Many struggling clothing chains in Germany are looking for new strategies. One is sustainable fashion – but at the lowest possible price.