The Sustainable Fashion Crisis: Why Good Businesses are Closing

Our friends at Good On You recently created a post highlighting the challenges that sustainable businesses are facing, explaining why so many are being forced to close their doors. Over the past year, we've watched countless small businesses abandon their dreams. It’s been heartbreaking to see our friends who create and sell beautiful, meaningful products struggle to survive. This year has been tough for sustainable brands of all sizes—from pioneers like Mara Hoffman to smaller labels like Dai in the UK—and Passion Lilie has certainly felt the impact as well.

In recent years, consumers have become more aware of the ethical and environmental impacts of their clothing choices. The sustainable fashion movement is gaining momentum, and the demand for sustainable products is growing. Yet, despite this positive trend, sustainable businesses are struggling to stay afloat.

This blog post will explore the key issues facing sustainable fashion brands today, the reasons behind the closure of many small businesses, and what can be done to support and strengthen the sustainable fashion industry.

The Rise of Fast Fashion 

Fast fashion has revolutionized the way people shop, offering trendy clothing at low prices and an unprecedented speed. Brands like Zara, H&M, and Shein have built their empires on the promise of delivering the latest fashion trends quickly and cheaply, often at the expense of the environment and workers' rights. The fast fashion model relies on mass production, cheap labor, and low-quality materials, allowing these companies to offer products at a fraction of the cost of sustainable fashion brands.

Of course, cheap, trendy clothing comes at a significant cost. The fast fashion industry is one of the largest polluters in the world, contributing to water pollution, greenhouse gas emissions, and massive amounts of textile waste. Additionally, the exploitation of workers in developing countries, who are often paid meager wages and work in unsafe conditions, is a well-documented issue within the industry.

Sustainable fashion, on the other hand, prioritizes ethical production, environmentally friendly materials, and fair labor practices. While these values align with the growing consciousness of consumers, the reality is that sustainable businesses face an uphill battle.

The Challenges for Sustainable Fashion Brands

1. Higher Production Costs: The fast fashion industry, with its relentless pursuit of profit and disregard for the environment, has created a hostile landscape for those of us trying to do things differently. We prioritize ethical practices including sourcing eco-friendly materials and ensuring safe working conditions and fair wages for our workers. These commitments result in higher production costs, which means, ultimately, higher prices for our products. We try to keep our prices as low as possible and offer sales whenever we can to make it easier for our customers to afford Passion Lilie clothing. While many people are willing and able to pay more for sustainably made products, we understand that the price difference between sustainable fashion and fast fashion remains a barrier.
2. Consumer Awareness: Even as consumers become more aware of the importance of ethically made, environmentally friendly clothing, it’s hard to resist the allure of fast fashion’s low prices. This price sensitivity creates a significant challenge for sustainable brands that prioritize quality and fair wages. Consumers conditioned to expect cheap, trendy clothing find it difficult to justify spending more on sustainable options.
3. Marketing and Visibility: Large fast fashion brands have massive marketing budgets that allow them to dominate advertising spaces, social media platforms, and influencer partnerships. Just think about the last time you Googled a general product. What were your top results? Temu, SheIn, and Amazon products are almost always the first sites to populate the page. Meanwhile, small, sustainable fashion brands struggle with limited marketing resources, making it difficult to reach a broader audience and build brand recognition.
4. Supply Chain Challenges: Sourcing eco-friendly materials and ensuring ethical production practices requires careful planning and investment. This is an ongoing part of managing a sustainable business, not just a box to check. Many sustainable brands strive to uphold certifications like Fair Trade, B Corporation, and Global Organic Textile Standard (GOTS), proving a company’s sustainability commitment. Brands that wish to maintain these certifications must meet their standards every year. Sustainable fashion brands typically work with smaller, independent producer groups who adhere to ethical practices. Our supply chains are more responsible, but we’re also more likely to experience delays and higher costs – especially compared to the efficient supply chains of fast fashion giants. Disruptions like the COVID-19 pandemic have a much more severe impact on small, sustainable businesses.
5. Economic Uncertainty: The economic challenges posed by the pandemic, inflation, and rising living costs have forced shoppers to tighten their budgets. In times of financial uncertainty, shoppers are more likely to opt for cheaper substitutions, even if they are less sustainable. This shift in consumer behavior has placed additional pressure on sustainable fashion brands, many of which (like Passion Lilie) are small businesses with limited financial reserves.

Why Are Small, Sustainable Businesses Closing?

Given the challenges we face, it’s no surprise that many small sustainable fashion businesses are finding it difficult to survive. These struggles and the dominance of fast fashion giants have forced many sustainable businesses to the brink. Sustainable brands are forced to decide whether to compromise quality, materials, or other parts of the supply chain just to stay afloat. When they’re forced to close, we all lose. It means fewer safe, fair-paying jobs, reduced innovation, and a continued reliance on harmful production methods. It reinforces the idea that profit is all that matters in business – there’s no room for concern about people or the planet.

What Can We Do to Support Sustainable Fashion?

Though the challenges are significant, there are things we all can do to support and strengthen the sustainable fashion industry.

1. Spread the word: Educating consumers about the true cost of fast fashion and the benefits of sustainable fashion is crucial. We find that the best way to spread the word about sustainable fashion is through casual conversations with family and friends. When someone compliments your cute outfit, share the brand and what you love about ethical fashion! As a sustainable brand, we recommend that other businesses create targeted marketing campaigns, collaborate with influencers, and develop partnerships with educational institutions to help tell the story of sustainable fashion. The more consumers understand the impact of their purchasing decisions, the more likely they are to choose sustainable options.
2. Government Support: Governments can play a role in supporting sustainable fashion by providing grants, tax incentives, and other forms of financial assistance. Additionally, implementing legislation and regulations that hold fast fashion brands accountable for their environmental and social impacts could level the playing field for sustainable businesses. To read more about the potential for regulating the fashion industry, check out our blog post about The Fashion Act.
3. Collaboration: When we work together, we all win. That’s why we love collaborating with other sustainable brands and businesses like Good On You and Seams Better. By working together, we can share resources, knowledge, and marketing efforts to increase visibility and reach a larger audience.
4. Innovation and Technology: Sustainable brands have a huge incentive to embrace new technologies and innovative practices that can help reduce costs and improve efficiency. Many sustainable brands are making advancements in natural materials, 3D printing, and blockchain technology for supply chain transparency. You can read more about how sustainable brands are leading the way in fashion technology here.
5. Community Support: We rely on our local communities to support sustainable fashion brands by shopping locally, attending events, and spreading the word about what we do. Community engagement is essential – we would not survive without our loyal customers.

The sustainable fashion industry is at a critical juncture. While the demand for ethical and eco-friendly products is growing, the dominance of fast fashion presents significant challenges for small sustainable businesses. By working together, we can create a fashion industry that prioritizes people and planet without compromising on style or affordability.