Kappahl Group doubles revenue from circular business and continues to reduce climate emissions

“Responsible fashion is the foundation of how we grow, how we design and how we take responsibility for the entire lifecycle of a garment. Our purpose helps us stay the course even in times of rapid change,” says Elisabeth Peregi, President and CEO of Kappahl Group.

Circular growth and reduced climate impact
In 2025, the average climate impact per product sold amounted to 4.5 kg CO₂e*, an improvement of 12 percent compared with 2024. At the same time, 99 percent of Kappahl Group’s products are now made from materials with a lower environmental impact than conventional alternatives, such as organic cotton and recycled polyester.

Interest in second hand and other circular services continued to grow across both Kappahl and Newbie. The number of stores offering second-hand products has increased to around 100, and second-hand sales grew by more than 100 percent compared with the previous year.

Conscious design choices have played a key role. During the year, Kappahl Group decided to stop producing ripped denim, despite their presence in current fashion trends. This decision has reduced unnecessary resource use and strengthened the link between design and garment longevity.
“If we want garments to be used for longer, they must also be designed for longevity. This is where design and responsibility come together,” says Sandra Roos, Vice President Sustainability at Kappahl Group.

Increased transparency in the supply chain to ensure good working conditions
Kappahl Group has continued to increase transparency across its value chain. Today, 95 percent of purchase orders are mapped back to fiber level using the traceability tool TrusTrace, and a large and continuously growing share of the Group’s suppliers report environmental and social sustainability data through various Higg Index modules. During the year, the Group also achieved GOTS Scope certification, further strengthening control and credibility in the use of organic materials.

“Being open and transparent about which factories we work with enables us to improve social sustainability in our production countries. This contributes to safer working conditions for the people who produce our products,” continues Sandra Roos.

An active role in the development of new regulations
New European textile regulations are currently being introduced, such as extended producer responsibility and increased traceability requirements. Kappahl Group has been active in dialogue with policymakers and industry peers in Sweden and internationally, with the aim of contributing to regulations that reduce environmental impact while remaining practically implementable.
“We want to be a clear and constructive voice in creating the greatest possible environmental benefit, contributing our expertise and helping to build the systems of the future,” says Elisabeth Peregi.

Looking ahead
Kappahl Group will continue scaling up its circular services, deepening its traceability work and advancing the transition to energy efficiency and renewable energy in production. Investments in new infrastructure, including a new automated global distribution center scheduled to open in autumn 2026, will contribute to increased efficiency and improved sustainability across the business.
“ Sustainability is an integral part of how we do business and create growth. In 2025, we demonstrated that responsible fashion is possible – and commercially viable – when it is built on longevity, circularity and transparency,” concludes Elisabeth Peregi.

Key figures and progress 2025

• 30% reduction in climate emissions compared with the 2022 baseline year
• 4.5 kg CO₂e average climate impact per product sold*
• 99% of products’ main materials have a lower environmental impact
• GOTS Scope certification achieved
• +102% net revenue from circular business initiatives
• Continued expansion of second-hand offerings within Kappahl and Newbie
• 95% of purchase orders mapped back to fiber level
• 94% of factories report environmental data (Higg FEM)
• 84% of factories report social sustainability data (Higg FSLM)
• Active role in the implementation of new EU textile regulations
• Co-founder of Norway’s interim extended producer responsibility solution (TekstilPRO AS)

* Kappahl Group continuously improves its climate calculation methodology and applied a more comprehensive approach to calculating climate emissions in 2025 compared with 2024. Using the same methodology, the climate impact per product sold in 2024 amounted to 5.1 kg CO₂e