KER Kering

By Joshua Kirby

Luxury brand Gucci is to launch a hub promoting circular fashion in Italy as it looks to anticipate European regulation forcing firms to limit the environmental impact of their operations.

The "circular hub" will aim to boost transformation in the Italian fashion industry's production models, Gucci, which is owned by French luxury-goods group Kering, said. This will entail coming up with new solutions to boost circularity, from raw materials and design to production and logistics, the fashion house said. A research-and-development center will study ways to improve circularity, including through better durability and recyclability of products, as well as minimizing waste and pollution.

Kering didn't set out the expected extent of the hub's environmental benefits, but said it should promote the use of fewer natural resources and reduce emissions of the greenhouse gases that contribute to the heating of the planet. An initial estimate suggests, for example, that the hub could cut the emissions from managing waste generated by Gucci's leather-goods production by up to 60%, Kering said.

Based in Gucci's home region in Tuscany, the hub will involve all Kering facilities in the region, including Gucci's production sites and Italian suppliers of raw materials, as well as producers of finished products. The hub's activities will later be extended to Kering's other brands, before opening to the wider fashion sector.

The group is applying for funding from the Italian government for the initiative, it said.

"The fashion industry needs to accelerate and launch serious actions to catalyze deep change, rethinking the way we produce and use resources as well," Kering's Chief Sustainability Officer Marie-Claire Daveu said.

"The creation of our circular hub represents a milestone that goes in this direction," Ms. Daveu said, adding that Italy was a good place to launch the hub since the country is home to some of Kering's most renowned production and expertise.

The hub should act as a forerunner for new models that will be made obligatory by European regulations in the coming years, Kering said. Last year, the European Union set out a plan to reduce the environmental damage of the apparel industry, a major contributor to global emissions.

Clothing should be "long-lived and recyclable, and to a great extent made of recycled fibers," the bloc said in its plan, while labeling should make it easier for consumers to gauge the impact of what they buy. New regulations will be formulated to enforce the measures over the coming years.

Some countries are moving faster than others. France has introduced a law obliging retail firms to make clear to consumers the environmental impact of their products, including the amount of recycled material, the use of renewable energy in their production and their recyclability. The regulation applies to larger companies with annual revenue above 50 million euros ($53.4 million) from the beginning of 2023 and will be applied to smaller players from next year.

The hub isn't the first time that Kering has taken the lead on sustainability. In 2019, a fashion pact was presented by group Chief Executive Francois-Henri Pinault, setting out targets for lower environmental impact across the industry, including alignment with the United Nations' targets on reaching net-zero carbon emissions by 2050. Members of the pact include Kering's luxury peers Prada SpA and France's Chanel, as well as fast-fashion firms such as Spain's Inditex and sportswear brands such as Germany's Adidas AG and Puma SE.

Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby

(END) Dow Jones Newswires

February 21, 2023 05:04 ET (10:04 GMT)

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