Sector Performance Breakdown and Key Drivers

Within the overall export figures, garments continued to be the dominant segment, contributing US$8.18 billion to the total. Other significant contributors included fibre, with nearly US$1.1 billion, fabric at US$719 million, and textile accessories, which generated US$382 million.

Vũ Đức Giang, chairman of the Vietnam Textile and Garment Association (VITAS), commented on the sector’s performance, acknowledging a slight decline in the initial two months of 2026. He attributed this dip to seasonal factors and pressures arising from trade instability. However, the marked recovery observed in March underscores the inherent strength and swift adaptability of domestic businesses.

Vinatex Exemplifies Sector’s Resilience

The textile and garment corporation Vinatex emerged as a compelling example of this successful adaptation. Vinatex’s financial statement for the first quarter of 2026 provided clear evidence of effective management strategies navigating the current economic climate. The company achieved net revenue of nearly VNĐ4.5 trillion, marking a 5.1 per cent increase, while its pre-tax profit experienced a substantial 31 per cent growth, reaching VNĐ355 billion.

This positive divergence between revenue and profit for Vinatex was largely propelled by the core performance of its yarn and garment segments. The garment segment benefited from a steady flow of orders and favourable pricing established in late 2025. Simultaneously, the yarn segment witnessed a strong resurgence in selling prices. These favourable outcomes were a direct result of businesses proactively responding to global fluctuations in cotton and fibre prices, influenced by geopolitical shifts in the Middle East. Furthermore, the industry effectively capitalized on demand from the Chinese market, as China’s domestic textile industry faced challenges to its cost advantages.

A noteworthy development is the United States’ imposition of a new 10 per cent global tariff, which has replaced previous, higher tariff rates. This policy adjustment has inadvertently created a competitive advantage for the Vietnamese textile industry.

Challenges and Future Imperatives for Vietnam Textile Exports

Despite these encouraging results, a significant challenge persists: the localization rate within the textile industry currently hovers around 51–52 per cent. The substantial reliance on imported raw materials continues to impede businesses from fully leveraging tariff preferences offered by international trade agreements, such as CPTPP and EVFTA.

Compounding these issues is the increasing pressure from international regulations concerning supply chains and sustainable development. Trương Văn Cẩm, vice president and general secretary of VITAS, emphasized that requirements for supply chain auditing, fibre traceability, and ESG reporting are no longer optional but have become essential. He stressed the need for businesses to adopt a more proactive and systematic approach in preparing to meet the stringent standards of major global markets.

To support the ambitious export target of US$49 billion for 2026, VITAS recommends a comprehensive suite of solutions for businesses. These include market diversification, increased investment in technology and artificial intelligence, and a decisive transition towards a green and circular economy, all deemed critical for sustained success.

Addressing concerns about environmental pollution in the textile dyeing industry, Giang affirmed that current wastewater treatment technologies are capable of systematic control. This, he believes, will help alleviate psychological barriers and foster the development of the domestic textile dyeing industry. Such progress is vital for enhancing the localization rate and cultivating a robust Vietnamese textile brand on the international stage. Vietnamese textile and garment products are currently exported to 138 markets, with the United States remaining the primary destination.

The trial, a collaboration with Bookoff Group Holdings, a prominent player in the used goods market, has seen collection boxes installed in approximately 30 FamilyMart stores situated in Tokyo’s residential districts. Bookoff Group Holdings is set to manage the resale of some of these collected items internationally, with Malaysia identified as one of the potential overseas markets. This venture underscores a commitment to the principles of a circular economy, where items are kept in use for as long as possible.

FamilyMart has also indicated that any clothing not deemed suitable for resale will undergo a recycling process, transforming it into new fibre. This dual approach of reuse and recycling highlights a comprehensive strategy to mitigate the environmental impact of textiles. The launch of these FamilyMart Japan initiatives marks the first joint project following a capital alliance formed between Itochu Corporation, the parent company of FamilyMart, and Bookoff Group in February of this year.

This programme builds upon FamilyMart’s established success with its food drive charity, a nationwide effort implemented in around 4,900 of its 16,400 stores. That programme allows customers to donate excess household food items to assist those in need, demonstrating the company’s ongoing dedication to community welfare and sustainable practices. The expansion into textile collection further solidifies the company’s commitment to addressing environmental concerns through tangible, customer-facing solutions. These FamilyMart Japan initiatives are part of a growing trend among retailers to integrate sustainable practices into their core operations, recognizing the importance of reducing waste and promoting responsible consumption.

Kearney’s latest 2026 Reshoring Index reveals that domestic output growth continues to lag, with little improvement observed between 2024 and 2025. The report indicates that U.S. manufacturers did not benefit from the volatile tariff policy changes. Overall manufactured goods output in the U.S. saw a slight dip of 0.4 percent, equating to a $28 billion decrease. The textile, fabrics, and mill products sector experienced a more pronounced decline of 4 percent, while the apparel segment suffered a marked reduction of 17 percent.

In stark contrast, combined imports from 14 Asian low-cost countries, including China, which were targeted with significant duties, grew by 6 percent, or $60 billion. This trend suggests that tariffs may have prompted trade diversification, but not necessarily towards the U.S. market or even the Western Hemisphere.

Dr. Sheng Lu, a professor of fashion and apparel studies at the University of Delaware, whose research informed the U.S. Fashion Industry Association’s latest Fashion Industry Benchmarking Study, noted that a record percentage of surveyed companies expanded their sourcing to over 10 countries last year. Nearly 60 percent plan to further broaden their sourcing networks. Despite this diversification effort, Asia remains a dominant source for U.S. apparel imports. In 2025, a substantial 72.6 percent of U.S. apparel imports, by value, originated from Asia, an increase from 71.6 percent the previous year.

Lu’s research highlights that Vietnam, Bangladesh, Indonesia, India, and Cambodia collectively accounted for a new record of 50.6 percent of U.S. apparel imports in the past year, a significant jump from approximately 37.1 percent before the COVID-19 pandemic. “In other words, due to production capacity constraints, many U.S. fashion companies have been diversifying sourcing within Asia rather than significantly shifting orders to other regions,” Lu stated. He further explained that emerging sourcing destinations like Cambodia, Indonesia, and India have built capacity and are supported by investors from China, which likely contributed to their significant export growth to the U.S. last year.

Patrick Van den Bossche, a partner in management consultant Kearney’s Strategic Operations Practice and author of the 2026 Reshoring Index, observed that despite significant investments in U.S. manufacturing over the past four years—triple the cash infusions seen in 2021—very little new capacity has been added. “We would figure by now some of that [investment] should start translating into manufacturing gross output,” Van den Bossche told. “And then, of course, the tariffs came along, and we thought, ‘It’s really time to turn these things on.’ Lo and behold, that’s exactly what didn’t happen.” Current manufacturing capacity utilization in the U.S. has fallen below 75 percent, a historically low point.

Kim Glas, president and chief executive officer of the National Council of Textile Organizations (NCTO), has also witnessed this trend. She believes that China-originating textiles and apparel continue to flood the U.S. market through Southeast Asian countries that have gained prominence. “The result is a deeply distorted market in which subsidized, below-cost products are overwhelming domestic manufacturers and their Western Hemisphere partners,” Glas stated. This phenomenon, she contends, has contributed to the closure of at least 40 U.S. textile mills over the past two-and-a-half years. The NCTO is focused on preserving the 453,122 jobs currently supported by the industry, which saw $27 billion in exports of fiber, fabric, and clothing last year.

Data from the Office of Textiles and Apparel confirms significant import shifts between 2024 and 2025, underscoring the growing dominance of Asian producers. U.S. apparel imports from Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) countries decreased by 6.7 percent by value and 8.1 percent by quantity year-over-year. Conversely, apparel imports from Southeast Asian nations saw substantial increases by quantity, including Bangladesh (up 12.4 percent), Cambodia (up 35.3 percent), Pakistan (up 15.4 percent), Vietnam (up 12.9 percent), Indonesia (up 13.9 percent), and India (up 4.2 percent). The value of these imports also grew due to volume increases and the impact of tariffs, with Bangladesh up 11.7 percent, Cambodia up 27 percent, Pakistan up 10.8 percent, Vietnam up 11.8 percent, Indonesia up 9.7 percent, and India up 5.5 percent.

Glas noted that many producers expected sourcing from the Americas to increase, given the approximately 10 percentage point tariff differential between CAFTA-DR countries and Asian nations. “You would assume with that differential that you would see more Western Hemisphere sourcing, but we saw a decline,” she said. “Intuitively, you would say, ‘Well, they have higher tariffs — that should deter sourcing from [Asia]; I’d rather mitigate costs and come closer to home and pay a modest 10 percent tariff,’ but that’s not what happened.”

The NCTO has previously advocated for targeted tariffs on goods like textiles and apparel, believing it could provide U.S. producers an advantage against cheap, Asia-made products. Glas commented on the initial tariff policy, stating, “When this was first deployed… it was thought that this would lead to more onshoring here in the United States and help protect from some of the worst trade behaviors.” However, she added, “in this environment, I think it added fuel to a fire that allowed Asia and China to grow. So tariffs alone are not going to recalibrate all of this.”

Bill Rogers, president and CEO of Mount Vernon Mills, an NCTO member, emphasized the need for trade policy stability that is legislatively entrenched rather than subject to executive directives. He described how clients of Mount Vernon Mills rushed to import goods before the tariffs took effect, leading to a six-month period for inventory to clear. While business saw a slight pickup afterward, Rogers indicated a significant hesitancy from customers entering 2026 due to ongoing tariff policy shifts. With the recent dismantling of certain duties, the administration has explored other avenues, including Section 301 investigations, to impose higher levies. “I think the uncertainty has still got a lot of people paralyzed,” Rogers said. He also pointed out that countries facing high duties, such as India, Pakistan, Bangladesh, China, and Vietnam, absorbed costs to remain competitive. When tariffs were later removed, the price gap between U.S. and foreign producers widened, posing challenges for U.S. producers vying for cost-conscious brands and retailers.

James McKinnon, CEO of Cotswold Industries Inc. and Central Textiles Inc., commented on the ongoing confusion in sourcing decisions. He cited a lack of policy that encourages reinvestment in the Western Hemisphere’s overall footprint, including increased fabric and needle availability, as a primary reason for the Americas not securing a larger share of the textile and apparel sourcing market. McKinnon suggested that strengthening the Berry Amendment, which mandates the use of domestic textiles for military service members, could scale U.S. production. He also highlighted the economic disparity, with labor rates in the Americas significantly exceeding those in Asia, presenting a considerable challenge for hemispheric sourcing opportunities. While large retailers express an interest in domestic production, they also face economic realities that limit their ability to bring back substantial business. McKinnon advocates for creative government policies and tariff strategies to incentivize the use of U.S. inputs, such as reciprocal tariff exemptions for clothing made in Southeast Asia using U.S. fabrics.

Glas echoed the sentiment that a different strategy is required. “What are some other tools in the toolbox that could be utilized right now that helps drive more sourcing here?” she questioned. She believes that addressing systemic issues undermining domestic industry success involves more than just tariff numbers. Glas submitted public comments to the Office of the U.S. Trade Representative regarding the Section 301 investigation into forced labor, which covers 60 trading partners. She recommended imposing Section 301 duties on textiles and apparel from China and South and Southeast Asian countries using forced labor. Additionally, she proposed preserving duty-free treatment for qualifying CAFTA-DR and U.S.-Mexico-Canada Agreement products, incentivizing Western Hemisphere sourcing, and rewarding supply chains free of forced labor. Other suggestions included tariff exemptions for necessary imported inputs and machinery not produced domestically, and strengthened customs enforcement to prevent illicit goods. Glas emphasized the need to consider the current dynamic period and stated, “I think looking at tariff rates is not the only way to look at the issue” regarding the promised U.S. manufacturing renaissance.

The company said the work examined wages and gathered worker feedback across 208 of its largest supplier facilities in Guangzhou, China. Researchers reviewed 7,317 wage samples covering 2,441 workers and collected survey responses from 9,981 workers on their pay and workplace experiences.

According to Shein, 95.3% of surveyed workers were earning at or above the hourly living wage benchmark for Guangzhou, using calculations provided by WRAP-accredited monitoring company CTI. But the worker surveys also revealed a more mixed perception of financial security: only 60.9% said they felt their wages were sufficient for living expenses, while 26.7% said they were not, and 12.4% were unsure. Shein said the difference between wage benchmarks and worker sentiment may be influenced by “personal needs and aspirations” as well as income levels.

In response to the findings, Shein said it is working with WRAP and the Ethical Supply Chain Program (ESCP) on a pilot to provide third-party workers access to an independently operated support hotline at a selected number of facilities. “Since launching in March 2026, the hotline has provided workers with access to legal, psychological, and HR support, offering them professional and efficient support for real-life challenges they face at their workplaces and at home,” Shein explained.

Separately, Shein said it has joined the fifth annual Cascale Better Buying Partnership Ship Index (BBPI), which gathers supplier views on brands’ purchasing practices. A total of 72 Shein suppliers completed the survey, producing an overall score of +64 on a -100 to +100 scale, compared with a benchmark score of +61. Shein also said 90.3% of participating suppliers ranked it as a preferred business partner.

However, the BBPI responses also highlighted areas suppliers want Shein to address. Chief among them was the call for stable order volumes, with suppliers pointing to demand swings linked to rapid product changes—such as styles being removed from sale—as well as softer off-peak periods. Suppliers said variability makes it harder to forecast labour needs, maintain efficient production schedules and avoid cost spikes.

Suppliers also reported additional stress from a more difficult global trade environment, citing rising costs and tighter cash flow as competition intensifies. They urged closer communication from Shein around short-term demand shifts and longer-term strategic changes, arguing that clearer signals would reduce disruption and uncertainty across the supplier base.

Shein said the results of the BBPI survey have been shared internally to guide improvements. “Findings from the BBPI survey were shared with Shein’s senior leadership and relevant business teams to inform ongoing efforts to strengthen purchasing practices and supplier engagement.”

The message from the stage was blunt: companies that still frame climate action as a compliance exercise are misreading the risk landscape. With climate-related volatility affecting costs and continuity of supply, sustainability has effectively become part of enterprise risk planning—what several speakers described as sustainability as financial risk, rather than a reputational add-on.

H&M CFO Adam Karlsson said investment choices increasingly need to weigh the price of delay as well as the cost of action, because climate risks are beginning to influence earnings quality, cash-flow stability and access to reliable supply. “It’s no longer about whether we should do it, it’s rather how we do it,” he said.

At Zalando, the sustainability case is being positioned not only as protection against downside, but as a lever for competitiveness—supporting growth, efficiency and customer relevance. Pascal Brun, VP of sustainability, suggested that simply preventing margin erosion is not enough to future-proof a business. “Keeping margins or preventing margin loss basically just keeps you in the business. But I think we all need more than that,” he said.

Speakers also stressed that many of retail’s biggest emissions sources and inefficiencies sit in shared upstream networks, which cannot be fixed by single companies acting alone. The panel called for more practical collaboration across common supply chains—moving from broad pledges to scalable joint programmes that can coordinate standards, investment and implementation.

Karlsson pointed to early progress in blended financing structures that bring together brand commitments, philanthropic capital and institutional funding to accelerate decarbonisation. He said a new H&M-led initiative involving seven brands had already “doubled the effectiveness” of its investment approach, signalling how pooled action can amplify results.

FMI’s chief collaboration and commercial officer Mark W. Baum also linked sustainability directly to core business outcomes, arguing that it now sits at the intersection of operations, finance and brand trust. “It’s become a business imperative, and it’s really directly tied to business performance, supply chain resilience, consumer trust, risk, financing,” he said.

Taken together, the panel’s argument was that retailers should plan and invest with sustainability as financial risk in mind—treating climate and resource pressures as material business variables that influence costs, continuity, competitiveness and access to capital, rather than as an isolated ESG reporting requirement.

The reality is more complex, and in many cases, far more unsettling. In cities where clothing consumption is high, donation systems are now receiving volumes that outstrip what local secondhand shoppers can absorb. That imbalance has quietly reshaped what donation means in practice, turning it into a sorting-and-disposal challenge as much as a pathway to reuse.

Understanding where donated clothes go begins behind the scenes, long before anything reaches a rack. Donations typically flow to charity warehouses and commercial collectors where items are graded quickly. The best pieces clean, durable, and still desirable may be priced and sold locally. That is the part people see, and it reinforces the idea that donation automatically equals reuse.

But charities and collectors are flooded. The incoming stream is so large that most organisations cannot sell more than a fraction of what they receive. What remains is a mixture of low-demand garments, inconsistent quality, and fast-fashion pieces that have already been worn hard or were never built to last. Some of it is discarded domestically because it is damaged or contaminated. Much of it is bundled into bales and exported, often thousands of kilometres away, to secondary markets.

This is the uncomfortable truth about where donated clothes go: the problem doesn’t disappear when the clothing leaves the country. Exporting simply shifts the pressure to other places—often to communities with less capacity to manage textile waste, fewer formal recycling routes, and limited landfill alternatives. The environmental and economic burden is redistributed rather than resolved.

At Global Textile Times, the reporting and data point to a clear conclusion: donation has been mistaken for a circularity solution when it is, at best, a collection mechanism. When donation is expected to “fix” overconsumption and overproduction, it becomes a pressure valve that moves surplus textiles elsewhere instead of preventing them. The circular economy cannot be built on overflow management; it requires fewer garments entering the system, better products staying in use longer, and local infrastructure that can actually handle what is collected.

Multiple city-based tracking efforts have found the same pattern across wealthy regions like Austin, Toronto, Melbourne, and Oslo: high donation volumes, limited local demand, and heavy reliance on exports. The system may vary by country, but the structural logic repeats—too many garments coming in, too little resale capacity, and too few local options for repair, remanufacture, or recycling at scale.

The strain also exposes a mismatch between what charities are designed to do and what they are being asked to do. Charity shops exist to fund social programmes and support communities, not to operate as a de facto waste-management industry for the fashion sector. Yet rising donation volumes have pushed them into exactly that role. Sector observers note that society has grown used to charities doing the heavy lifting, even though many have been unable to fully handle the volume of donated clothes for a long time. These organisations are driven by social welfare values and must raise funds for their programmes, but their operations are often ill-equipped to deal with the sheer scale of textiles that now need to be reused or recycled.

The deeper cause is not what happens at the donation bin; it starts well before that. Two forces dominate: oversupply and overconsumption. Clothing has become cheaper, faster, and increasingly disposable. People buy more items than they need, wear them fewer times, then offload them quickly often with the belief that donation neutralises the impact. Meanwhile, garment quality has deteriorated in many segments. Fibres and construction often can’t withstand multiple owners, and blended materials can be difficult to recycle. Even the most efficient sorting operation cannot turn fragile, low-quality products into endless reuse.

There is a knock-on effect, too. When donation streams are dominated by low-grade items, they can weaken local secondhand markets. Resale businesses may struggle to source consistently wearable clothing from local inflows and, in some cases, import higher-quality secondhand product to meet customer expectations. More donations do not automatically translate to more successful reuse; in saturated systems, more donations can simply mean more waste.

This is where the idea of “sufficiency” becomes essential. Recycling and reuse matter, but they cannot solve an ever-rising volume problem on their own. Sufficiency means buying less, keeping clothes longer, and repairing rather than replacing. Without sufficiency, “circularity” becomes a permanent exercise in dealing with excess.

Cities have a decisive role to play. The study’s recommendations echoed by a growing body of urban circularity work suggest that textiles need to be treated as a managed material stream, not as a charity issue. That requires investment in local collection, sorting, and processing capacity, so that wearable items are routed into resale, repairable pieces are channelled into services, and non-reusable textiles are dealt with through local recycling or responsible disposal rather than being exported by default.

Practical changes can help keep clothes in use longer: accessible repair services, mending education, swap events, and support for circular businesses through grants or reduced rent. Urban planning choices also matter. When cities centre new-mall development while repair cafés and resale shops are pushed to the outskirts, they design a landscape where fast fashion has the advantage. Some European cities are beginning to rebalance this by offering incentives to repair and reuse businesses, recognising that circularity needs convenience and visibility to compete.

Advertising and promotion can amplify or undermine these efforts. Fast fashion dominates public attention with budgets and prime locations, while secondhand and repair often operate quietly. Researchers argue that cities should actively amplify reuse ecosystems through grants, lower rents, and better high-street placement while limiting the dominance of fashion advertising in public spaces. When secondhand and repair are harder to find, and new fashion is everywhere, the system all but guarantees that fast consumption wins.

For individuals, the message is straightforward, if not always comfortable: the most meaningful impact comes from reducing the rate of buying and discarding. Wear what you own more, repair early, and buy better when you must buy new. Donate only what is clean, wearable, and likely to be reused and remember that donation is not a moral “reset,” but one step in a system under strain.

Donating can still be valuable, but it is not a magic solution. Many donated garments will travel across borders. Some will be resold. Too many will still end up as waste just in a different country. The real fix requires change at every level: brands that slow production and improve quality, cities that build local textile systems, and consumers who treat clothing as durable goods rather than short-lived purchases. Only then does the path of donation begin to align with the responsibility people hope it represents.

The annual decline is the weakest reading for the category since March 2021, when pandemic-era disruption was still distorting pricing patterns. The drop helped pull down the overall inflation rate, acting as a rare deflationary component within a basket where other costs are rising.

On a month-to-month basis, clothing and footwear prices increased 0.6% between February and March, but that was far more subdued than the 2.3% rise recorded over the same period a year earlier. The ONS said the shift in the 12-month rate was largely driven by lower prices in women’s and children’s clothing.

While fashion became cheaper year on year, the broader inflation picture worsened. Headline CPI rose 3.3% in the 12 months to March 2026, up from 3.0% in the year to February. CPI also increased 0.7% between February and March, compared with a 0.3% rise in the same month last year.

Core CPI excluding energy, food, alcohol and tobacco rose 3.1% year on year, edging down from 3.2% in February. Beneath the surface, goods inflation strengthened, with the annual CPI goods rate climbing from 1.6% to 2.1%, while services inflation increased from 4.3% to 4.5%.

The British Retail Consortium said emerging pressures linked to the Middle East conflict are beginning to show up, particularly through higher fuel costs, even as intense competition keeps fashion pricing tight. BRC economist Harvir Dhillon said: “The first signs of inflationary pressure stemming from the conflict in the Middle East began to emerge last month, driven largely by rising fuel prices. Across retail, the picture was mixed. Intense competition pushed clothing and footwear back into deflation, but in the grocery sector, mounting cost pressures saw food inflation creep up. Ahead, if food prices follow a similar trend as seen following the Ukraine-Russia conflict, prices will start to ramp up more notably throughout 2026.

“Although the energy price cap and removal of green levies may provide some near-term relief, inflation will rise over the coming quarters as the full impact of the Middle East conflict filters through. As a more energy-intensive sector, supermarkets and their supply chains are likely to be disproportionately affected. With food prices set to rise, it is lower-income households that will be hit hardest. The government must target support towards these retailers, in particular looking at non-commodity charges which push up the cost of businesses’ energy bills. This will help mitigate the peak in food inflation, reducing the squeeze on households.”

For fashion retailers, the latest reading suggests UK clothing and footwear prices remain under downward pressure despite broader inflation firming—highlighting how competitive discounting and product mix shifts can diverge from the wider cost environment that is being influenced by energy and geopolitical factors.

Parke has grown quickly online by treating its audience as a co-creator—using direct feedback to shape what it makes, from silhouettes and colours to the wardrobe gaps customers say they want filled. Target is leaning into that positioning, framing the partnership as a way to translate a “viral” brand’s point of view into a broader, more accessible retail moment.

“Parke has built such a strong following by putting its community at the center of everything it creates, designing with intention and showing up in ways that feel personal, authentic and connected,” said Gena Fox, senior vice president, apparel & accessories, Target. “We’re excited to work with them and build on Target’s long legacy of making great style, design and value accessible to all.”

The Parke x Target collection was developed jointly by Target and Parke founder Chelsea Parke Goles and her team. The assortment spans leisurewear, denim, accessories and coordinated ready-to-wear sets, and it also marks Parke’s first move into swim. Target said the lineup includes brand signatures such as mockneck logo sweatshirts, alongside mix-and-match sets and staple denim intended for repeat wear.

For Parke, the collaboration represents a chance to meet customers beyond its usual channels and scale its aesthetic without losing the brand’s community DNA.

“Collaborating with Target is incredibly meaningful to me because it opens the brand up in a whole new way,” said Chelsea Parke Goles, Parke CEO and Founder. “From day one, Parke has been about community and connection, and this partnership allows us to meet people where they are – whether that’s someone discovering us for the first time on a Target run, or a longtime customer seeing us in a new, more accessible context. We’re able to offer the same sense of style and ease at a price point and scale that invites a much broader audience into the Parke world, which is something I’ve always dreamed of.”

The Parke x Target collection will be sold on Target’s website and in select stores, with nearly 60 women’s apparel and accessory pieces available while supplies last. Target said most items will be priced under $40, with entry prices starting at $5—positioning the capsule as an affordable introduction to Parke for new shoppers, while giving existing fans a lower-priced way to buy into the brand’s look.

The implementation will begin in Q2 2026 with The North Face, with additional VF brands expected to follow in phases. VF said the goal is to build a stronger operational base for end-to-end inventory visibility, improving day-to-day store execution while enabling more data-driven decisions on replenishment, fulfilment and customer service.

VF’s focus is on creating a unified view of stock, reducing the inconsistencies that can appear when inventory data sits in separate systems across stores, warehouses and vendor networks. With Nedap’s platform, the company expects higher stock accuracy and better product availability, which in turn supports more consistent omnichannel experiences across regions.

The initiative is not limited to store floors. VF said it is extending visibility deeper into distribution channels, a move it links to efforts to curb grey-market activity and reinforce brand protection measures. By tightening traceability and transparency through the network, the company expects to improve control over where product is and how it moves.

“Our consumers expect the same level of product availability and service whether they shop online, in-store or through any of our brand touchpoints,’ says Carsten Trenz, VP of Digital at VF Corporation. “Unified visibility across our operations allows us to deliver that consistency and build long term customer loyalty.”

Hope Waldron, VP of Supply Chain Strategy, VF Corporation adds: “Extending our RFID program beyond stores to include distribution centers and vendor partners at the source gives us greater transparency across our entire supply chain. That visibility improves our ability to ensure product availability, strengthen brand protection, and deliver a more consistent consumer experience.”

VF said it chose Nedap after reassessing its long-term needs following a pilot using a different solution. The company cited requirements around scalability, platform design and global support as key factors in selecting a system capable of handling the complexity of a multi-brand, multi-region rollout.

Nedap framed the deal as part of a broader shift toward unified commerce that depends on reliable inventory data. “In today’s retail landscape, unified commerce only works when brands can rely on one consistent source of truth for their inventory,” says Hilbert Dijkstra, Managing Director Retail at Nedap. “VF’s decision to invest in end-to-end visibility reflects a clear vision for the future: the ability to serve consumers seamlessly across any channel. Through ongoing innovation of our platform, we help VF operate with confidence, agility and precision.”

For VF, the partnership is positioned as an infrastructure upgrade—using RFID-driven, item-level tracking to deliver end-to-end inventory visibility not just within stores, but across distribution and supplier networks, where accuracy and speed increasingly determine both customer satisfaction and operational efficiency.

The measure sits inside the EU’s Ecodesign for Sustainable Products Regulation (ESPR), a broader policy framework introduced to raise sustainability expectations across the single market. The Commission has framed the change as part of its effort to “prevent the destruction of unsold consumer products” and reduce the environmental footprint of high-volume categories such as textiles and shoes. In practice, the EU ban on destroying unsold clothes targets a long-established industry habit of scrapping excess inventory—sometimes to protect pricing power and brand positioning, sometimes simply because storage and reverse logistics are costly.

Who is covered, and when

Under the timetable set out in the regulation, the prohibition applies first to large companies from July 2026. Medium-sized companies will be required to comply from 2030, while the smallest firms are exempt from the ban. The policy is one of the more direct interventions yet aimed at changing downstream behaviour forcing businesses to treat unsold stock as something to recover, reroute or redesign rather than dispose of.

The ESPR itself entered into force in 2024, bringing a wider set of tools intended to improve product durability, encourage reuse and reduce waste. The destruction ban is expected to become a high-profile test case for how quickly fashion can adapt to tighter product and waste governance.

Mandatory disclosure adds pressure

Alongside the prohibition, companies will also face transparency requirements. During the transition, firms will need to disclose how much unsold product they discard and explain the reasons behind those decisions. The reporting obligation is designed to make inventory outcomes more visible to regulators and stakeholders and could expose weak planning, overproduction or limited takeback capability in some business models.

Operational consequences for retailers

For retailers, the coming shift is as much operational as it is regulatory. The EU ban on destroying unsold clothes is likely to force changes in forecasting, buying and end-of-season tactics, especially for businesses that have historically relied on aggressive production volumes and rapid markdown cycles. Instead of destruction, companies will need to expand alternatives such as resale, outlets, donation partnerships, fibre recycling routes, or even product redesign and remanufacturing.

Legal and compliance commentators have noted that the rules are crafted to steer firms toward “more sustainable handling of unsold goods,” and they sit within a wider rise in ESG-related scrutiny that is reshaping expectations for global retailers.

Part of a broader EU textiles push

The ban is also linked to the EU’s larger circular economy agenda for textiles, an area Brussels has repeatedly identified as a major source of resource use and waste. By combining design-related requirements with restrictions on disposal, the Commission is aiming to extend product lifetimes and reduce landfill and incineration outcomes, while lifting reuse and recycling rates across member states.

Crucially, the impact will extend beyond Europe’s borders. Any brand selling into the EU market will need compliant practices, which could ripple into global supply chain decisions, returns management and stock allocation strategies.

With July 2026 approaching, retailers are expected to audit their reverse logistics, partners and inventory policies preparing for a market where unsold fashion can no longer be quietly eliminated, but must instead be managed through circular routes that keep products and materials in play.