The new law comes into effect in January 2025 and prohibits the manufacture, sale or distribution of new textiles and apparel products containing perfluoroalkyl and polyfluoroalkyl substances, or PFAS, a group of chemicals commonly used to make garments waterproof or stain-resistant. Apparel makers will be required to use “the least toxic alternative,” and procure a certificate of compliance from manufacturers.

It was signed into law Thursday, per an announcement on the website of state Governor Gavin Newsom.

PFAS have been dubbed “forever chemicals” because they do not break down naturally and accumulate in the human body when absorbed, studies show. Exposure can cause serious health issues such as increased cholesterol, cancer and risks to reproductive health and foetal development, according to numerous studies.

Many brands have committed to stop using the chemicals in their products, though few have successfully done so. The industry is still working to find alternatives with the same properties, particularly for high-performance fabrics. California’s new law includes an extension that gives apparel designed for extreme conditions, like watersports and mountaineering, until 2028 to become PFAS-free.

The Californian law is one of multiple regulatory initiatives taking aim at the chemical group. In New York, similar moves to ban PFAS by late 2023 awaits approval by Gov. Kathy Hochul. In the European Union, countries including Germany, the Netherlands, Sweden, Norway and Denmark are currently working on sweeping proposals to restrict PFAS in all uses, including textiles.

Learn more:

Why Fashion Needs a Detox

The fashion industry is thirsty and dirty. BoF assesses companies’ efforts to tackle water stress and pollution in the latest in a series of articles examining the findings of The BoF Sustainability Index.

For the last 18 months, Balenciaga has conducted a quiet resale experiment. Now it’s rolling out the programme more widely, becoming one of the first major luxury brands to test fully integrating a secondhand service into its business model.

The “re-sell” programme allows customers to sell their pre-loved “Triple S” trainers or “Hourglass” handbags directly through the brand, earning cash or credit that can be spent on new Balenciaga items.

Its launch adds weight to a significant and rapidly accelerating shift in luxury attitudes towards the fast-growing secondhand market.

Once seen as a threat that could cannibalise sales, encourage counterfeiting and hurt brand image, it’s increasingly viewed as a strategic (if emerging) opportunity to meet consumer and regulatory demand for more sustainable business models, encourage customer loyalty and engagement and reinforce the long-term value of luxury products.

Though notable holdouts like Hermès and Chanel remain, many brands are either already experimenting with resale models or signalling their intention to do so. But the channel must still prove its benefits as both an environmentally and financially sustainable business model.

While the market is growing rapidly — estimated by BoF Insights to expand up to 20 percent from 2020 to hit $67 billion by 2025 in the US alone — most consignment sites have yet to show they can turn a profit.

Meanwhile, delivering on resale’s sustainability promise will require brands to develop today’s experiments into substantial revenue streams that can eventually displace primary sales.

Balenciaga’s new programme is an interesting and early test case that represents one of the boldest moves yet into the market by a storied luxury brand, embedding resale into the customer journey on the brand’s website.

The label has partnered with Reflaunt, a white-label tech platform that provides brands with the architecture to run their own resale programmes and plugs them into dozens of marketplaces globally.

That takes care of a number of potential pain points: Balenciaga retains control of pricing, presentation and authentication, without having to handle the transactions itself; logistics costs are baked into an item’s price and will vary depending on where the seller and buyer are located; targeting multiple marketplaces maximises the chances of a swift sale; and the challenge of customer acquisition becomes an opportunity for retention.

“It’s really a leap of faith and not really the values we recognise in luxury today,” said Reflaunt founder and chief executive Stephanie Crespin. “It’s helped move luxury values to a different place.”

Reflaunt’s investors include Balenciaga CEO Cédric Charbit, while its clients include Harvey Nichols and Net-a-Porter, and it’s part of LVMH’s start-up accelerator.

To be sure, other brands like Coach and Oscar de la Renta have opted to develop resale as a direct sales channel. Coach is planning to roll out its (Re)Loved programme currently available in North America to Europe and Asia in the coming year. Another approach that brands including Gucci, Burberry and Alexander McQueen have tested is a partnership with existing marketplaces, like The RealReal or Vestiaire Collective.

Many are still simply laying the groundwork, eyeing how the market is evolving or investing in supporting technologies like digital labelling that can help smooth out the labour-intensive process of authentication.

But there are signs investment is likely to speed up.

Balenciaga’s parent, the French luxury conglomerate Kering, acquired a 5 percent stake in Vestiaire Collective last year, while British department store chain Selfridges has said nearly half its sales will come from recycled products or services like resale by the end of the decade. Farfetch CEO José Neves laid out a plan to reposition Yoox as an “end-of-cycle and circular fashion destination” by adding resale to its offering following the August e-commerce megadeal that saw Farfetch take a near 50 percent stake in Yoox Net-a-Porter.

“The secondhand market is a real transformative factor in luxury,” Kering CEO François-Henri Pinault told analysts in February, highlighting that the company’s investment in Vestiaire “gives us a front-row seat on this new trend, and it enhances our ability to influence the future of our industry.”

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On Sept. 23, UK Chancellor of the Exchequer Kwasi Kwarteng released his “mini-budget,” outlining the economic policies of British Prime Minister Liz Truss’ newly formed government. Its name was deceptive: the mini-budget contained a number of changes, including the abolition of the country’s top income tax rate and a freeze on energy bills, that unsettled markets and crushed already-fragile consumer confidence in a big way. The mini-budget has sparked an economic crisis that has accelerated this week. Here, BoF explains the crisis and the implications for the fashion industry.

What’s going on?

While Truss and Kwarteng argue the policies will unlock growth by making the UK economy more competitive, their critics are portraying the mini-budget as mainly benefitting the rich, while feeding inflation and leaving the government’s safety net starved of funding.

Financial markets were not happy; the price of UK government bonds, known as gilts, plunged, and the pound hit a record low against the dollar. In a rare statement on Tuesday, the International Monetary Fund criticised the mini-budget, warning it would “likely increase inequality” and urged the UK government to reconsider its policies.

Before the week following Kwarteng’s budget unveiling drew to a close, the Bank of England took steps to calm markets by buying gilts, while Truss defended her policies in the media, resisting calls to reverse course.

Wasn’t the UK economy already in trouble?

The debate over tax cuts versus social spending is not new. But the mini-budget came against a gloomy economic backdrop. Inflation in the UK hit double digits in July for the first time in 40 years. Energy prices are spiking as Russia cuts off natural gas supplies to Europe. While the economy has yet to technically enter a recession, most economists see it as only a matter of time.

The solutions to these problems tend to be painful. The Bank of England can bring down inflation by raising interest rates, which reduces consumption because it becomes costlier to borrow. Many fear the central bank will have to hike rates by more than anticipated to counter the mini-budget’s tax cuts. The consensus forecast is for the bank’s base rate to hit 6 percent by spring, from 2.25 percent today.

One of the Truss government’s first acts was to cap household energy bills, heading off a potential crisis this winter. However, for many, anxiety over heating costs have been replaced by concerns about mortgage payments. The BOE’s base rate is used to calculate borrowing costs across the economy, including mortgages; homeowners with adjustable rates on their loans could see their payments rise by thousands of pounds annually. Meanwhile, the property market was left in turmoil as mortgage providers pulled hundreds of products, leaving many potential home buyers and sellers in limbo.

Where does this leave fashion?

All this uncertainty means Britons are not in a shopping mood. Even before the mini-budget’s unveiling, the economic outlook was grim. Consumers worried they would need to pay thousands of pounds more to heat their homes and have been cutting back on non-essential purchases, including clothing. In August, consumer confidence looked worse than it had during major recessions, even though the UK economy was still technically in a period of high employment and growth.

“There’s a nervousness among the UK consumer, and that nervousness is increasing,” said Neil Saunders, managing director of research firm GlobalData. “Apparel is one of those areas where unfortunately it’s very easy to make cuts.”

High street retailers are adjusting to the grimmer national state of mind.

“Instead of spending so much on marketing and on customer acquisition, we’re going to be mining the customers we’ve got and talking to them about price… because there’s fear out there,” Boohoo chief executive Carol Kane said on the company’s half-year earnings call on Sept. 28.

Keeping prices down isn’t going to be easy. Like most big fashion brands, Boohoo sources much of its clothing from Asia, and even garments made in Europe often contain materials shipped in from China, Vietnam or Bangladesh. Those suppliers want to be paid in dollars; the weaker the pound gets, the more expensive those clothes become. Retailers can accept slimmer margins or pass along the higher costs to consumers. For now, they’re doing both: apparel inflation hit 7.6 percent in August, while low-cost retailers including Primark have warned that profits will fall.

Is there any upside?

There are a few potential ways fashion could benefit from the recent upheaval, mostly for luxury brands.

Wealthy consumers, while not immune to economic downturns, generally have enough cushion to keep spending even if their heating bills and mortgage payments rise. They’ll have more to spend too as the mini-budget’s tax cuts take effect.

The mini-budget also restores a waiver of the value-added tax for tourists that expired at the start of 2021. Going forward, overseas visitors will effectively receive a 20 percent discount on many purchases. That plus the weak pound will make a shopping trip to London extraordinarily appealing, and not just for the budget-minded.

Luxury items such as Rolex timepieces could sell at a hefty discount, with the waiver in addition to the weak pound could mean a steel Rolex GMT-Master II that costs around $11,300 in the US can sell for for around $2,000 less in the UK, according to Bloomberg, citing watch retail industry publication WatchPro.

“It was a big problem for us in the UK, not attracting more tourists,” Moncler chief executive Remo Ruffini told BoF in a recent interview. “Now, I think they can not only attract the foreign tourist from outside of Europe, but also the Europeans — the Italians will go to the UK. It’s good for the economy.”

It’s unclear how much the VAT waiver or the plunging pound will boost spending beyond Harrods, Selfridges and the luxury brands on Bond Street, however. And UK-based brands and department stores are still in the position of having to accept cheap pounds at the till while paying suppliers in expensive euros or dollars.

“It’s not going to benefit everyone to the same extent — the spoils are unevenly distributed,” Saunders said.

Call it a thin silver lining on a very dark cloud.

Lauren Sherman contributed to this article.

THE NEWS IN BRIEF

FASHION, BUSINESS AND THE ECONOMY

Burberry appoints Daniel Lee chief creative officer. The designer who helped revive Bottega Veneta succeeds Riccardo Tisci as the British luxury brand seeks to accelerate growth under new CEO Jonathan Akeroyd.

Balenciaga launches resale programme. The luxury label is partnering with tech and logistics platform Reflaunt to help customers sell their pre-owned Balenciaga clothing and accessories.

H&M to cut costs as profits hit by inflation, cautious shoppers. Pretax profit in the June-August period, the Swedish group’s fiscal third quarter, fell to 689 million crowns ($60.9 million) from 6.09 billion a year-earlier. Five analysts polled by Refinitiv had on average forecast a 2.98 billion crown profit.

Boohoo cuts outlook as consumers rein in spending. The online fashion retailer on Wednesday now expects revenue to fall 10 percent over its full year 2023, it had previously forecast revenue growth in the “low single digits.”

Shein outlines plans to reduce emissions. The Chinese ultra-fast-fashion giant said it will reduce supply chain emissions 25 percent by 2030, outlining projects to drive greater energy efficiency and support a transition to renewable power among its manufacturers.

Richemont’s Watchfinder reports customer data breach. The UK-based company, which sells watches online and in retail outlets, “recently discovered unauthorised access to a user account belonging to one of our employees,” its CEO Arjen van de Vall said in an email to clients and customers.

Farfetch CEO sees luxury recession resilience and China return. Chief executive José Neves said handbags, fashion and watches are less sensitive to economic downturns, and he expects demand in China to bounce back next year.

Chinese consumers snap up used Rolexes and Birkins to satisfy luxury cravings amid slowdown. Zhu Tainiqi, founder of Shanghai-based second-hand luxury goods marketplace ZZER, said he’s seen a surge in people selling Birkins bags and Rolex watches, alongside a jump in buyer interest.

THE BUSINESS OF BEAUTY

Sephora launches same-day delivery subscription. The beauty retailer announced a new subscription-based membership on Tuesday that allows shoppers to get certain Sephora products (based on delivery address and nearby locations) delivered in as little as two hours.

Shiseido to acquire skin care line Gallinée. Shiseido Europe, S.A., a subsidiary of Japanese beauty conglomerate Shiseido Company Limited, will acquire the London-based microbiome skin care brand. Financial terms of the deal were not disclosed.

PEOPLE

Gucci names new CEO of its Vault and metaverse ventures. Robert Triefus will be charged with finding new opportunities to expand Gucci’s presence in online spaces such as gaming.

MEDIA AND TECHNOLOGY

Harper’s Bazaar to launch French edition. Harper’s Bazaar France will be published in both print and online. It will operate under a multi-year licensing between Hearst and Prisma Media. Its first print edition will be published in March 2023.

Walmart is making its first move into the metaverse with virtual worlds on Roblox. The retailer will unveil two immersive experiences on Roblox Corp.’s virtual platform. Walmart Land will feature fashion, beauty and entertainment items, while Walmart’s Universe of Play will showcase toys, the company announced.

Chat-based e-tailer Threads Styling acquired by Chalhoub Group. The deal will allow Threads Styling to deepen its ties with the key Middle Eastern market, while enabling its new owner to boost its digital presence and international reach.

Compiled by Joan Kennedy.