A new report from the Transformers Foundation reveals the reasons innovation in the apparel and textile industry is struggling to keep pace with the fashion industry’s accelerating speed.
On Thursday, the nonprofit organization that represents and advocates for the denim and wider apparel supply chain, published “Unlocking Equity in Innovation: Balancing the Scales in Supply Chain Partnerships.” The report draws on over 30 interviews with global stakeholders across the apparel supply chain to identify the barriers to progress.
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“Innovation won’t transform the industry unless it’s built on fair, transparent partnerships. This report is a call to reimagine how value and risk are distributed, and to ensure suppliers have an equal seat at the table,” said Andrew Olah, Transformers Foundation founder.
Though companies in the supply chain are often the catalyzers of innovation, the report highlights how “uneven distribution of risk” is limiting the industry’s ability to build scalable, equitable, and effective partnerships. Uneven power dynamics mean mills and manufacturers are consistently required to fund the financial and human capital for new technologies and research with no guarantee that their investment will result in orders or long-term commitments from clients.
Misaligned expectations impact nearly every aspect of supplier and brand relationship. The wide sweeping challenge affects priorities, expectations and knowledge between all stakeholder groups.
Technology startups are unfamiliar with the needs and timelines of fashion, while outsourcing has led to fewer technical experts inside brands and retailers. The time between pilot and commercialization can take years, which doesn’t align with fashion’s short lead times and seasonal calendar. Brands also have unrealistic expectations of price neutrality for innovation.
The latter highlights how suppliers are undervalued by both brands and innovation startups. “Suppliers don’t have an equal seat at the table when it comes to decision-making, collaboration or risk distribution,” the report states.
Though suppliers are relied upon to educate brands and retailers on sustainability and innovation, they also take on an uneven portion of risk, invest more time and energy into R&D and absorb large losses when solutions fail to succeed, according to the report. Transformers’ interviews also revealed how startups can often expect suppliers to test solutions without financial support to reflect their efforts.
These issues are compounded by inconsistent commitments from brands. Most are hesitant of the long-term commitment innovation requires and many brands don’t always have the tools to identify which innovator is the right match for them, the report states.
The positive impact of strong early-stage support and brand buy-in cannot be overstated. Offtake agreements like Inditex’s agreement with Ambercycle in 2023 and H&M Group’s partnerships with Syre in 2024 signals to the financiers and other brands that an innovation has potential. “Brand demand pulls the rest of the supply chain into alignment—all stakeholders are looking for brands and retailers for their commitment signals.
The report proposes opportunities to rebalance power dynamics across fashion’s innovation ecosystem.
Open-source information, frameworks and data are key to standardizing expectations and to help close the knowledge gap between brands, suppliers and other stakeholders. Companies are urged to include top decision makers in the conversation to align priorities and buy-in from the C-suite down. Brands and retailers are also encouraged to approach innovation like a strategic business consideration by pulling financial levers to support new products and processes.
“The future of fashion innovation will be defined by the strength of its relationships,” said Tricia Carey, Transformers Foundation board member and chief commercial officer at Avalo. “Equity, transparency, and long-term thinking aren’t optional, they’re the foundation of scalable climate solutions.”
