The German start-up Retraced was founded just five years ago and now counts around 150 fashion and outdoor brands and their 15,000 international suppliers among its customers. The start-up supports them in the digitalization of their supply chain. This includes renowned brands such as Victoria’s Secret, Calzedonia, Tom Tailor and Marc O’Polo, as well as sustainability pioneer Vaude. However, digitalization is not a goal in itself for Retraced: with its SaaS* platform, the company wants to help brands not only meet but even exceed their sustainability goals and ensure that their products are sourced, produced and distributed responsibly. brought to market.
In a new funding round, Retraced raised 15 million euros to further develop the company, led by investor Partech – one of the largest technology investment platforms in Europe.
Philipp Mayer, co-founder and Chief Product Officer from Retraced, tells FashionUnited what he wants to use the money for, where the fashion industry stands when it comes to the traceability of its supply chain and what challenges it currently faces.
Retraced has just successfully completed a new financing round and raised 15 million euros. What do you want to use the money for?
We are active in Europe, Asia and the United States. We want to continue to grow internationally, which makes sense because textile supply chains and sales channels are also international. We are currently investing heavily in the use of artificial intelligence (AI). The technology is used to help CSR teams and suppliers deal more efficiently with the enormous amounts of data and information. It should help facilitate compliance while having a positive impact on the fashion industry towards sustainability. The new financing round is a great confirmation for us that we are on the right track.
The fashion industry is currently facing major challenges. How open are brands to investing in their supply chain transparency at this time?
We notice in sales that discussions take longer than one or two years ago. Budgets are being cut, while brands should already be taking action now. However, this is especially the case in Germany. In other countries, brands continue to invest in digital transformation and innovation to prepare their businesses for the future.
More transparency in the supply chain is a prerequisite for becoming more sustainable. However, the current criticism is that this goal is being lost in the midst of all the data collection. Do you agree?
Traceability is a big buzzword in the industry right now. When major international brands communicate that they can trace millions of items, many brands think that they should be able to do this too. However, many don’t realize what it means to actually collect all this data at the product or order level – especially for their suppliers. Here at the event (editor’s note: the Cascale meeting in Munich) a supplier shared that it takes him up to 15 days per order to collect all the data! So you should always first ask yourself what your goal is with traceability. Is it just to map the data so you can have a better overview and meet your due diligence obligations? Of course, every brand should do this, but this doesn’t mean it has to be traced at the product level.
To help brands do this, we’ve just published a due diligence guide. Many brands don’t know if and how they will face new regulations and need to prioritize which steps are most important first. It’s hard to keep track of everything. We want to make it as easy as possible for sustainability managers of large and small companies, so that they can focus on the main issues, namely taking measures to sustainably improve their supply chains. AI will help even more in the future.
You also write in the guide that you want to “demystify” the legal framework. What do you mean by that?
There is a lot of misinformation in the industry right now. For example with regard to the Digital Product Passport (DPP). It is not yet entirely clear what exactly it will entail: The framework conditions for the textile subsector will not be established until July 2026 and will enter into force a year later. It will therefore take more than two years before we know exactly what data about the product should be communicated and how. Many DPP providers are already building pressure, which is not necessarily helpful. However, it is important that fashion companies start setting up the right infrastructure now so that they can efficiently collect, manage and ultimately communicate the relevant data when the time comes. That is why education is important.
Transparency is an important factor for future legislation. How far along is the industry?
That varies. For example, outdoor brands already have a lot of insight into Tier 1 and Tier 2 and often maintain very close relationships with their suppliers. We also see outdoor brands using the data more extensively to initiate improvements together with their suppliers or develop new, more environmentally friendly materials. Discounters, on the other hand, generally have fewer direct supplier relationships and instead work with agencies. So there is no visibility into the supply chain and hardly any dialogue to improve things. Responsibility is fully transferred to the agency.
In general it can be said that most companies only know their direct suppliers, which are usually the sewing factories. Many no longer know where substances and ingredients come from.
Fashion brands and retailers sell not only clothing, but also other products – from jewelry and bags to furniture. How transparent are the supply chains here?
We already have customers who also offer hardware, such as the outdoor brand Vaude, which also produces bags and tents. We generally also cover “adjacent” industries, such as jewelry and bags, so that brands don’t have to work with multiple tools. But it stops with electronics. We also don’t want to broaden our focus; our expertise lies in clothing and shoes. Due to scandals and tragedies in the recent past, the fashion industry started to become more transparent a few years ago. Although we still have a long way to go, the fashion industry is already a little further along than other industries. We see this mainly in how high the demands of fashion companies on our platform are and how relatively low the demands on solutions in other industries are.
How many companies do you work with? And in which markets are you currently active?
In total, we work with more than 150 brands and more than 15,000 suppliers on our platform. In Germany, for example, with S.Oliver, Marc O’Polo and Vaude, and in the US with Victoria’s Secret, Neiman Marcus and Alexander Wang. In principle you can say that our customers are divided into approximately four regions of equal size. A quarter of the turnover comes from customers in Germany, a quarter from Europe, a quarter from Asia and a quarter from the US.
The supply chain in Bangladesh is faltering. Does your tool help build more resilient supply chains?
Yes, working through our platform not only enables the sustainability team to work more efficiently and effectively, but also helps the purchasing department to respond faster. The earthquake in Turkey and the floods in Pakistan over the past two years, for example, have shown this. Buyers were able to quickly identify Tier 1 and Tier 2 factories affected by the disasters and take appropriate action.
Does this also make you more interchangeable as a supplier?
If you can’t provide added value, maybe you can. However, most companies in the supply chain have a right to exist and contribute to value creation. More transparency will certainly not deprive these companies of business.
*Saas: Software-as-a-Service
This article previously appeared on FashionUnited.DE. Translation and editing by Sylvana Lijbaart.
Source: fashionunited.nl
