Wednesday, July 14, 2010

Looptworks: An "Upcycling" Story

Fast Company has an article about an interesting company called Looptworks. The firm buys excess fabric from textile factories, and then uses that scrap to create a line of outdoor clothing. It's a wonderful story of reducing waste and enhancing sustainable business practices.

However, that's not the entire story. To me, two additional aspects of the business are worth considering for a moment. First, Looptworks has chosen to focus on outdoor clothing. To me, that demonstrates a very smart choice of target market. Why? Many outdoor enthusiasts care a great deal about the environment. Thus, they are quite inclined to purchase these "upcycled" products. There's a perfect match between the upcycling aspect of the production process and the target customer for outdoor clothes.

Secondly, the company commands a premium price not simply because of the "green" dimension to the business, but because they produce many limited editions given the finite amounts of certain scrap fabric that they are able to acquire. Of course, producing limited editions and small batches of clothing also means that they are much less likely to have to employ markdowns to sell off excess inventory of less popular items. Markdowns often prove to be a major profit killer for apparel producers and apparel retailers. All in all, it's a creative business model with great potential.