Kappahl Group, the owner of Kappahl and Newbie brands, sold 34.5 million products in 2025. Ninety-nine percent of those products were made with materials with less environmental impact, according to the company’s 2025 Sustainability Report.
The report illustrates how circularity, transparency and long-term responsibility are increasingly driving the business.
“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,” said Elisabeth Peregi, Kappahl Group president and CEO.
The Swedish fashion company has a global network of suppliers. Bangladesh’s share of production is 42 percent, followed by China (30 percent), Turkey (9 percent) and India (8 percent). Cambodia, Sri Lanka, Pakistan, Italy and Bulgaria round the production map. In 2025, factories representing 84 percent of the company’s business volume report social sustainability data via the Higg Facility Social and Labor Module and 94 percent report environmental sustainability data via the Higg Facility Environmental Module (FEM).
Kappahl Group continued to increase transparency across its value chain. According to the report, 95 percent of purchase orders are mapped back to fiber level using the traceability tool TrusTrace.
Kappahl Group’s outlook for circularity grew sharper in 2025. Consumers showed strong interest in the company’s secondhand Kappahl and Newbie assortments, which is available in 100 stores across four markets. During the year, the firm reached its target of target of SEK 1.4 million ($150,900) in net sales from circular offers, bringing total accumulated circular sales to over SEK 2 million ($215,600).
The company also investigated an open‑loop recycling solution in which textile waste is used as a reduction agent in steel production. With Höganäs, RISE, Borås Energi och Miljö and the University of Borås, Kappahl Group explored how low‑value textile waste can replace fossil coal, offering a promising opportunity to reduce climate emissions.
Closing the loop remains a large focus for the company. In 2025, 37 percent of its assortment fulfilled the design criteria the company has set for an assortment enabled for a circular economy. Kappahl’s goal is reach 50 percent by 2026.
Though distressed denim has long cycled in and out of fashion, the company’s 2025 decision to discontinue pre-damaged styles underscored a key issue in garment durability: garments engineered to appear heavily worn are, by design, less durable. “If we want garments to stay in use for a long time, we must design them accordingly. This is a clear example of how design and responsibility belong together,” said Sandra Roos, Kappahl Group’s vice president of sustainability.
To further support designs made to last, the company is integrating digital design tools that help its designers make more informed decisions early in the product development process.
Other sustainable achievements include a 30 percent reduction in climate emissions compared with the 2022 baseline year, GOTS Scope certification achieved and active participation in the implementation of new EU textile regulations.
Looking ahead, Kappahl Group said it plans to scale its circular services, deepen its traceability work and advance the transition to energy efficiency and renewable energy in production. The company reported that investments in new infrastructure, including a new automated global distribution center scheduled to open this fall, will contribute to increased efficiency and improved sustainability across the business.
