Why Do Sustainable Fashion Brands Keep Going Bankrupt?

You know that eco-friendly denim brand your favorite sustainability account keeps recommending? One of the best-known ones, MUD Jeans, just filed for bankruptcy. Not because women stopped buying its jeans. Because the entire economics of fashion are built to reward the opposite of what MUD Jeans was trying to do.

Why do sustainable fashion brands keep going bankrupt?

Because the system prices "good" out of survival, not because shoppers stopped caring. MUD Jeans, a Dutch B-Corp known for letting customers lease jeans and send them back to be recycled, filed for bankruptcy in August after the debt from building that circular model became too heavy to carry. Business of Fashion sustainability editor Shayeza Walid, writing about the collapse, put it plainly: asking individual businesses to build a more sustainable fashion system will only get the industry so far if the economics of the existing one keep rewarding making and selling more. It's not just a MUD Jeans problem. It's an industry-wide one, and it's part of why Sézane recently chose to slow its own growth instead of scaling faster rather than chase the model that keeps breaking other brands.

What's actually broken here

Circularity costs money up front, and none of that cost is optional. Repair programs, take-back systems, recycled materials, and fair wages up the supply chain all add real expense to every single item a sustainable brand makes. Meanwhile, fast fashion competitors keep pumping out cheap new pieces because nothing in the system currently charges them for the water, carbon, or waste those clothes leave behind once you're done with them. A brand trying to do the harder, better thing ends up competing on price against companies that never had to pay for the damage in the first place. That's not something a sustainable label can fix with a better Instagram strategy or a heartfelt founder story. It's structural, and it will keep happening to other brands you love until the underlying economics change. The scale of what's at stake is enormous: the UN Environment Programme estimates the global fashion industry produces around 92 million tonnes of textile waste every year, most of it burned or landfilled rather than reused, because throwing away and buying new is still the cheapest option on paper.

You can see the same disconnect play out in what actually happens when you resell your old clothes — one person doing the right thing, running straight into a system that was never built to reward it back.

Why this matters for you

If you've ever felt like you were doing something wrong because your favorite ethical brand quietly disappeared, or talked yourself into a fast-fashion purchase because the sustainable version cost three times as much, you're not the problem here. You were never going to shop your way out of a system engineered to make the cheap, disposable option the rational one for almost everyone. That doesn't mean your choices don't matter. It means they were never supposed to carry the whole weight of fixing this by themselves, which is part of why it's worth asking whether buying ethical fashion actually empowers the women doing the buying in the first place, rather than treating it as the whole answer.

One thing to try today

The next time you feel guilty over a clothing purchase, redirect that energy somewhere it can actually do something. Send one email, comment, or DM to a brand or a lawmaker asking why the durable, repairable option costs more than the disposable one, or why there's still no real cost attached to textile waste. Your individual guilt doesn't move an industry. Public pressure on the actual economics might.

Quote to sit with

"Every time you spend money, you're casting a vote for the kind of world you want." — Anna Lappé

💌 Sarah