A recent announcement about a new textile initiative to be launched in South Africa next month has been met with interest. Faro has been touted as a solution for reducing textile waste in the global fashion industry, but there are concerns about its potential impact on national efforts to expand clothing manufacturing, create jobs in South Africa and build a circular fashion and textile economy. Twyg spoke to Faro’s co-founder David Torr and industry specialists about this new venture.
What is Faro?
Faro will purchase clothing overstock from Western brands and resellers, and sell the garments at prices discounted by 70-80% off the original price to consumers in Africa as a means to divert this overstock waste from landfills. Faro has partnered with the Bestseller group, whose fashion brands include Jack & Jones, LMTD, Only, Vero Moda, Vila and Noisy May.
The business will open a flagship store in Mitchell’s Plain, Cape Town in October, and according to reports five more stores are set to open in the next eight months, and another 20 in the next year and a half. Co-founder Torr told us that Faro hopes to operate as many as 500 hubs across the continent. By selling from these hubs in peri-urban settlements, and not online, Faro promises to not cannibalise the existing trade of the Western brands and resellers.
While selling overstock does not reduce the amount of textile waste that ultimately ends up in landfills, a large part of the company’s mission is to “save a kilo of clothing” for every kilo sold.
To “save” or reduce clothing from landfills, Faro has partnered with the textile upcycling NGO, Africa Collect Textiles (ACT) based in Kenya and Nigeria. Torr says, “We are paying ACT to proactively collect textile waste from landfills. So, we’re diverting waste at the source…for every single T-shirt that’s sold, there’s an additional T-shirt that’s removed from the landfill.”
However, founder of ACT Elmar Stroomer told Twyg that ACT does not take items from landfill. He says, “It is too late when they end up there. They are contaminated and cleaning is too costly. We try to avoid items to end up in landfills. We have our own collection systems”. For now, ACT recycles manually, generating employment, with plans to raise funds for textile-to-textile recycling machinery. While Stroomer commends Faro for considering the end-of-life stage in their business model, he says it is unclear how Faro will carry out the kilo-for-kilo pledge, and tangibly reduce waste from Africa’s landfills while importing product.
When asked about waste diversion programs for South Africa, Torr disclosed that while Faro currently has none, it intends to launch give-back programmes in their physical locations, encouraging people to donate clothes for recycling in exchange for discounts on future purchases. The company needs to partner with a local textile recycling company to enable this program.
Etienne Vlok of Southern African Clothing and Textile Worker Union (SACTWU) also has concerns about Faro, noting that the new initiative will disrupt local markets, undermine efforts to create sustainable jobs, contribute to current dumping issues in Africa, and prioritise Western over African brands.
Disrupting local markets
When asked if he thought Faro would disrupt trade for local operators, Torr responded, “I think in success you do…We want to see each of these little hubs as a kind of ecosystem opportunity for small businesses to build up the back of”.
According to Faro’s current business model, each store, or hub, will hold between 8,000 and 16,000 garments. While people will be able to buy directly from the stores, local merchants will be offered discounts to purchase overstock and resell it as their own inventory within the market. In Torr’s words, “we can build kind of a grassroots inventory, or industry within”, also creating jobs in reselling and sorting facilities.
But Vlok believes the Faro business model could undermine the national textile industry’s objective of creating manufacturing jobs. “Traditionally, the manufacturing sector is where countries across the world have managed to grow and develop their economy and create more jobs.” Even if it creates jobs in reselling and recycling, taking business away from domestic textile manufacturing may be counter-intuitive to the larger development of the nation.
Furthermore, Vlok says, workers in the manufacturing sector often have certain protections and guaranteed benefits such as healthcare due to established unions. A reseller, particularly one in the informal sector, is unlikely to have the same kinds of benefits, and is also likely to have much more unstable and unpredictable income.
More concerning, says Vlok, is the possibility that Faro’s business model may break international trade rules.
Concerns of dumping
While Faro seeks to offer a “higher quality” alternative to second-hand and cheap imports, there is a chance its business model may contribute to the issue of dumping. In Vlok’s view, Faro is “not really different from second-hand clothing being sent to Africa.”
According to the International Trade Administration Commission of South Africa (ITAC), “Dumping, which is a form of international price discrimination, refers to the practice of a company selling the same good at a lower price in an export market than in its domestic market.” With Faro’s plans to sell overstock at highly discounted prices, Vlok points out a similar undermining of domestic retailers may occur.
Vlok says local competition will be shut out, creating a dependency on the imported overstock, giving importers the power to raise prices for consumers while destroying the domestic textile economy.
Faro perceives this overstock waste issue as an allocation issue, viewing the fashion industry as a global producer that must find secondary markets for the leftovers from producing for primary markets in US and Europe. Torr says, “I don’t think the decision is, like, can we sell this stuff? The decision is where we can sell this stuff… [Brands] don’t want to sell last season’s stock in primary markets and disrupt trade”.
The National Clothing Retail Federation’s Michael Lawrence is certain that, despite good intentions, Faro is a palliative fix for brands in the Global North. Referring to South Africa’s coal energy dependency, Lawrence says, “they prejudice us for essentially producing things under carbon energy basis, but what we don’t want is for them to be chucking their stuff over to us now to solve their circularity or sustainability ambitions.”
“Blessing” us with their clothes
Torr describes the overstock as “better quality” and “more sustainable” alternatives to second-hand clothing and cheap imports. He says Faro will offer South Africans “aspirational pieces” they could otherwise not afford. Volk, dismisses this idea: “Instead of second-hand goods, we are now ‘blessed’ by international brands being dumped. Thank you very much for that”.
Vlok says, “The greatest problem of our continent is not the amount of goods. It’s growing jobs, ensuring greater incomes for people, ensuring countries industrialise…Of course South African economies and other African countries want to transition to a cleaner economy. But doing it in the way Faro is describing will cause significant damage to existing economies and jobs.”
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