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UDPATE: Vanmoof has confirmed its application for a suspension of payment and the temporary shutdown of its physical stores. The startup said it would provide more updates shortly. July 12, 6:00 PM ET.

E-bike startup VanMoof has applied to a local court for an official suspension of payment provision after running out of money, the company has confirmed to TechCrunch.

Is VanMoof about to go “poof”? According to a report in the Dutch publication NRC, VanMoof is not officially bankrupt with this move: This is a particular scheme in the country that is designed to help a company try to avoid that, and give a temporary protection from creditors.

“The court has also ordered a cooling down period (‘afkoelingsperiode’) of two months,” Thijs Plug, global PR lead, told TechCrunch. “Together with the management of VanMoof the administrators are currently assessing the situation in order to find a solution so that VanMoof can continue its activities.”

Earlier this week, we broke the news on how the Amsterdam-based e-bike startup, backed by hundreds of millions of dollars in venture funding, was facing a major crisis: a prolonged pause in sales; a barrage of angry customers demanding refunds for their bikes, or complaining about the lack of service on their broken bikes; the departures of key executives; and struggles to raise money to continue operating.

The move to the Dutch courts effectively means that VanMoof cannot be forced to pay bills or other money owed, and that any money that it does pay out, and any financial moves it makes at this point (including raising money) will be required to go through court-appointed administrators for approval.

The court order can be in place for up to 18 months, and during that time VanMoof has time to restructure its business and look for new investment. If it doesn’t find a way ahead in that time, it then files for bankruptcy.

NRC reports that employees will be officially told about the state of the company today, and that the court will officially announce the suspension Thursday.

In the meantime, the company has closed all of its retail stores and appears to have halted all other activity, including its bike servicing.

“Due to the recent developments, we have decided to temporarily close the brand stores for the safety of our colleagues in the stores,” said Plug. We have asked the spokesperson to elaborate on the comment on safety.

“We work hard to continue our services and will separately contact all customers as soon as possible regarding pending deliveries or repairs.”

As we detailed in our story earlier this week, one of the main issues with VanMoof’s bikes is that they are custom designed from the ground up, including being tightly integrated with the VanMoof app.

The first of these means it’s virtually impossible for anyone to repair a VanMoof bike themselves. Prior to today’s announcement, on June 27, VanMoof said KwikFit NL, the car maintenance chain, would be a new service partner.

The second of these means that if the company does go bust and fails to find a buyer for the assets, the bikes already out in the world — if they are not already broken — lose most of their connected functionality, although are still more or less usable. Instead of opening the bike with the app, users can, for instance, use a backup unlock code on the start/bell button to start and ride the bike without their phone. But this will, of course, be scant assurance for customers who wanted the full VanMoof functionality.

The company has been facing a huge backlash for its models, not least because its bikes appear to be less than robust. As we reported earlier this week, one in 10 bikes last year were returned after purchase, and the company was losing money on bikes based on the costs of repairs of those that remained in people’s ownership.

And as for those repairs, this reddit post, allegedly from a former employee at the company’s Los Angeles outpost, paints a bleak picture of the company’s internal processes.

Vanmoof told TechCrunch it will have more updates to share shortly.

Tesla said the $7,500 federal tax credits for its Model 3 and Model Y electric vehicles are likely to be reduced after December 31, according to a change on the automaker’s website late Tuesday.

“Customers who take delivery of a qualified new Tesla and meet all federal requirements are eligible for a tax credit up to $7,500,” the website reads.

“Reductions to current federal tax credit likely after Dec 31.”

The EV tax incentives, in addition to Tesla’s many price cuts, have helped the automaker hit record delivery numbers. If Tesla were to lose tax credits, it could still fall back on its trusty (and controversial) price cuts, but analysts worry that such a strategy will have a serious effect on the company’s margins.

Tesla didn’t say why it expects to lose federal tax credits on its vehicles by the end of 2023, but it could be due to the government’s plan to enforce stricter rules on batteries next year.

The tax credit is broken down into two parts, each worth $3,750: a battery requirement and a critical minerals requirement.

To be eligible for the battery requirement in 2023, 50% of the vehicle’s battery must be assembled or manufactured within North America.

Next year, that percentage jumps up to 60%.

To meet the critical minerals requirement in 2023, 40% of the critical minerals in a car’s battery must be extracted from or processed within the U.S., or from a country with whom the U.S. has a free trade agreement. By 2024, that percentage will be 50%. Additionally, in 2024, vehicles can’t source battery parts from a foreign country of concern, AKA China, and in 2025, EVs can’t contain any critical minerals sourced from China or other countries of concern, if they want to keep their credits.

Tesla uses batteries from Chinese company CATL and South Korean company Panasonic for its Model 3s.

The automaker has recently tapped BYD, a Chinese automaker, for batteries for its Model Y.

The harsh requirements are the U.S.’s attempt to end reliance on China for battery manufacturing and parts. Despite billions of dollars in investment from automakers and battery manufacturers to onshore, that reliance will be tough to end.

Six of the top 10 battery manufacturing companies are based in China, the country that dominates cathode, anode and refined battery materials production.

In 2022, China had more battery production capacity than the rest of the world combined, with 838 GWh capacity.

That’s compared to the U.S.’s 70 GWh, according to BloombergNEF data.

U.S. battery production capacity is expected to grow 10x by 2027 to about 908 GWh, but that’s nothing compared to China’s expected 600% increase.

The alert from Tesla could also be a move to kick more sales into gear this year, encouraging buyers to order a Model 3 or Y in the next few months while there’s a near-guarantee of receiving the full credit. Tesla only just got the green light for its Model 3s to be eligible for the full credit, rather than just half, in June. All Model Ys have been eligible since the rules went into effect.

• Chanel-backed Oritain has raised $57 million in a series C funding round.
• The company uses forensic analysis to trace materials and commodities back to their origin.
• It counts among a cohort of companies neatly positioned to benefit from a tailwind of incoming sustainability regulation.

Two years ago, Chanel president Bruno Pavlovsky told BoF traceability was the company’s “top priority.” Around the same time, the luxury giant started working with Oritain, a New Zealand-based business that has carved a leading position in the space by using forensic analysis to track materials and commodities back to their origin.

On Wednesday, the company raised $57 million in a series C funding round that saw Chanel nearly double a previous quiet investment alongside others including lead investor Highland Europe.

The substantial sum reflects the company’s strong position in an increasingly challenging market.

Though capital has become more discerning, Oritain counts among a cohort of companies neatly positioned to benefit from a tailwind of incoming regulation that is putting brands under growing pressure to prove the cotton in their T-shirts hasn’t come from regions linked to forced labour and the leather in their handbags isn’t associated with deforestation.

“Regulation is really driving growth for some of these businesses in a way that’s really dramatic as opposed to steady growth,” said Highland Capital principal Jacob Bernstein. “We are underwriting that Oritain becomes worth billions in the next few years.”

The topic of traceability is already top of the agenda for many fashion companies because of US moves to ban cotton from China’s Xinjiang region, which the American government says is linked to forced labour (an allegation consistently denied by the Chinese government). But new regulations in Europe focused on preventing deforestation and other supply-chain abuses are leading to increased focus on leather and other materials.

It’s a tricky issue because most brands have little visibility over where the materials they use come from and limited capacity to untangle the convoluted route most commodities take before they make it into the products consumers buy off the shelves.

Oritain’s solution relies on forensic analysis to identify chemical fingerprints formed by the specific environment a fibre was grown in. Differences in factors like altitude, rainfall and the composition of soil will all affect the composition of the fingerprint, enabling Oritain to trace commodities like cotton, leather, coffee and cocoa back to where they originated.

The company’s clients include Chanel, fast-fashion giant Shein (which has used Oritain to back up claims that its cotton is not linked to Xinjiang) and the US government.

“The product is unreal,” said Bernstein. “That [level of traceability] is something heads of sustainability in fashion brands literally don’t think is possible until they see it.”

The company is planning to use its new funds to accelerate its growth and expand into new markets and industries. Areas of focus include leather, gemstones and precious metals — commodities with challenging supply chain issues for major brands.

To be sure, the technology is no silver bullet.

It still needs to be accompanied by robust due diligence to ensure operations are being managed responsibly. The accuracy of the tests relies on access to detailed data about the specific conditions where commodities are sourced around the world. Oritain’s data library reaches back to the brand’s founding in 2008.

“We often joke we perfectly timed the last two years after perfectly mis-timing the previous 13,” said Oritain CEO Grant Cochrane. “In those years we were burning millions of dollars to build up data sets, so we have a head start.”

Late last month, leading materials start-up Bolt threads said it had paused operations for its leather alternative Mylo. The company’s struggle to raise funds points to deeper challenges for the sector, writes Kenneth Pucker.

Were one to judge the progress of sustainable fashion by counting press releases for new bio-based materials, the industry would pass with flying colours.

Biofabricated spider silk, fermented seaweed fibres and fruit, vegetable and fungi-based leather alternatives are but a few of the inventions pitched as game-changing eco-solutions by big brands and big investors.

There are reasons to be excited; fashion will need lower-impact materials to meet growing demands from consumers, regulators and investors to cut the industry’s environmental impact.

Today, more than two thirds of fashion emanates from fossil fuel inputs, and heaping piles of scarcely worn shirts and shoes are poised to outlive purchasers’ grandchildren in landfills. And even natural materials like leather or wool have a hefty environmental footprint and are often coated with synthetic chemicals and plastic finishes to ensure performance and durability.

But while credit is due to the creative and courageous innovators and investors leading efforts to develop alternatives, attempts to scale far-out concepts into market-ready solutions have struggled.

Last week, prominent start-up Bolt Threads announced a pause in production of its much-hyped mushroom-based leather alternative Mylo, the result of difficulties raising new funds.

The news caught many by surprise, especially given Bolt’s pioneering status and fundraising prowess.

The company gained early traction thanks to collaborations with Stella McCartney. Since its founding in 2009, the company has raised at least five rounds of funding summing to over $330 million. Its backers include a novel consortium of brand partners including Stella McCartney, Adidas, Lululemon and Kering, who all committed to develop products containing Mylo.

Bolt Threads blamed the pause in Mylo production on a challenging macroeconomic climate that “has made it increasingly difficult to secure necessary capital to support the scale up of emerging technologies.” Given Bolt’s compelling partner brands and the over $450 million of capital invested in next-gen materials in 2022 alone, it is likely this was not the only reason.

Indeed, the sudden news points to broader challenges that also face other material innovators seeking to up-end the dominance of leather, polyester, and nylon.

Leather has been around for thousands of years and chrome tanning — a faster, cheaper alternative to traditional methods that helped develop the production of leather goods at scale — was invented over a century ago. Since then, billions of dollars have been invested in perfecting processes and driving down costs. Such advances aside, the material has properties (such as its ability to improve with age) that are very hard to replicate.

Some of these same elements apply to another dominant fashion material input: polyester. Introduced over 75 years ago, the polyester supply chain has also been tuned to deliver abundant, consistent supply at low cost. At the same time, years of research and development have produced polyester variants that deliver performance characteristics that are a challenge to match, including consistency, availability, stretch, strength or moisture management.

Notwithstanding some brands’ genuine desire to reduce their environmental footprint and innovate, the process of replacing existing materials with new products can be daunting and plagued by labyrinthian approval processes.

Even trickier, contrary to the cheery survey data, there is no compelling empirical evidence that consumers will pay more for “sustainable” fashion. That means margin pressures most often rule out expensive new ideas with little credit given for reduced environmental impact. As a result, innovators are either forced to sell at a loss or are restricted to pilot programs, stymying efforts to prove the viability of their products, scale production and reduce costs.

Compare the number of venture capital firms funding software to the number of venture firms specialising in material innovation or fashion. There are far fewer.

The reasons for the chasm are structural. Once a software solution is invented, the marginal cost to distribute the second, third and one millionth sale are close to zero. By contrast, once a new material is invented, the marginal costs for subsequent units are nearly the same. It is only with learning and scale that costs begin to decrease.

At the same time, building the capacity to produce new materials often requires considerable capital expenditure to build out infrastructure. These costs do not exist for software products. While some fashion companies, including H&M Group and Nike, invest in new environmentally preferred solutions, corporate support for new ventures is small relative to the need.

Mushrooms, pineapple, cactus, and coconut leathers make for dramatic headlines. Often, however, the buzz has been bigger than the impact.

A lack of disclosure — and frequently, diligence — has made it hard to understand how new materials really measure up on sustainability. For example, though plant-based alternative leathers can generate fewer carbon emissions as compared to cow leather, most include synthetic polymers (AKA plastics) to add strength and durability. As a result, they come with other environmental challenges (such as biodegradability) that are associated with the least readily degraded component of the product. Mylo, for instance, includes plastic.

These trade offs are typically directly related to efforts to ensure innovations can compete on quality and performance as well as impact. Pushing products to market before they are ready on all counts risks the credibility of the whole sector.

Though materials are the most visible manifestation of a product, they do not represent the bulk of a garment’s environmental impact.

In fact, less than one quarter of an apparel item’s carbon footprint comes from raw materials, while over 70 percent of emissions come from the processing and production, according to analysis by the Apparel Impact Institute and World Resources Institute. As such, if decarbonisation is the goal, it would make sense to reallocate the billions spent on material innovation to the gritty work of replacing coal-fired steam boilers in many less developed countries. Credit to Apparel Impact Institute for leading this vital work.

This does not mean that innovation should stop. Instead, an industry committed to reducing its environmental footprint ought to:

(1) Encourage partnerships between new materials developers and existing suppliers to accelerate innovation and streamline spending.

For instance, leather manufacturer Ecco Leather has partnered with mycelium-based materials start-up Ecovative in a novel tie up designed to leverage existing infrastructure to bring new innovations to market.

(2) Actively endorse regulation to force companies to pay for social and environmental costs. Efforts to make brands pay to manage clothing waste through so-called Extended Producer Responsibility schemes would be a step in the right direction, if coupled with ecomodulation fees (that penalise worse material choices based on their environmental impact) and appropriate compensation for the countries in the global south where old clothes currently end up.

(3) Accelerate financial support for the work of the Apparel Impact Institute and others committed to supporting suppliers’ efforts to decarbonise.

(4) Fund blended finance partnerships to accelerate targeted grid transitions to cleaner forms of energy in countries with deep fashion supply networks.

These strategies will yield far more impact than yet another press release announcing the acceptance of a marine macroalgae jacket into a museum collection.

H&M Teams With Artist GucciGhost for Disney 100th Anniversary Collection

The streetwear-inspired collection leverages iconic Disney characters for an array of styles.

H&M’s latest collaboration is celebrating a milestone anniversary.

The Swedish clothing company is teaming with artist Trevor Andrew, known popularly as GucciGhost, for a streetwear-inspired collection celebrating Disney’s 100th anniversary.

The men’s and women’s collection offers a wide range of styles, including polo shirts, sweatshirts, T-shirts, varsity jackets, denim pieces, accessories and more.

The collection will be available starting July 20 in-store and online.

The products feature iconic Disney characters as prints and graphics on the styles, such as Mickey Mouse, Goofy and Donald Duck. Andrew incorporated his own aesthetic with the Disney graphics, utilizing his signature ghost and flying egg symbols.

For the first time, H&M is offering limited-edition skateboards as part of the collection. The skateboards are designed with the Disney characters and feature a hand-painted Disney logo drawn by Andrew.

To celebrate the collection, H&M is transforming its Williamsburg, Brooklyn, location into an interactive gallery space that features Andrew’s artwork for the Disney collaboration, on display from July 20 through Aug. 23.

This is the latest fashion brand celebrating Disney’s 100th anniversary this year.

Earlier this year, brands like Tommy Hilfiger, Karl Lagerfeld, Vera Bradley and Givenchy, among others, have created capsule collections highlighting the company’s anniversary.

H&M’s Disney collection is also the fashion brand’s latest major collaboration this year. In May, H&M released its highly anticipated Mugler collaboration after debuting the collection during a fashion show in New York City in April.

H&M’s Disney collaboration offers 23 styles across apparel and accessories. Prices range from $5.99 to $135.

Sources said the mega influencer’s brand is in the process of raising fresh funds from mutual funds and family offices in a prelude to an offering.

Kim Kardashian is inching that much closer to Wall Street.

The mega influencer’s Skims brand is in the midst of a round of fundraising that is set to value the fast-growing innerwear business at close $4 billion, multiple sources told WWD.

While the round has not yet closed, Boston-based mutual funds and family offices are said to be investing in what would be a pre-IPO fundraise, setting the company’s value anew ahead of a potential offering over the next six to 12 months.

Skims raised $240 million in a Series B fundraising round in January 2022, valuing the company at $3.2 billion at that time.

Representatives for Kardashian did not immediately respond to requests for comment.

While the company’s valuation is set to increase rapidly from round to round — and could potentially move much higher again in an eventual offering on Wall Street — the business is growing even faster.

The brand is said to be on track to produce sales of close to $1 billion this year with a growth rate of about 100 percent — without any permanent retail base.

By comparison, Victoria’s Secret & Co. saw its sales fall 6 percent to $6.3 billion last year and currently has a market capitalization of $1.6 billion.

Kardashian has built the four-year-old business with a mix of online popularity and genuine commercial savvy that has clearly upset the status quo in innerwear and fashion.

While Kardashian is front and center — most recently posting with well-oiled models for a Skims swimwear campaign shot by Steven Klein — she has a powerhouse team with her, including cofounder Jens Grede and his wife, founding partner Emma Grede. The couple also cofounded Khloé Kardashian’s Good American denim brand and contemporary casualwear label Frame.

Jens, who serves as chief executive officer of Skims, told WWD in 2021: “Our dream is to develop a few generation-defining brands. If the ’90s had Guess, Victoria’s Secret and Calvin Klein, I want today to be defined by Good American, Skims and Frame.”

That’s a big ambition and one that Skims could certainly help fulfill if it keeps its growth up.

An IPO would give Skims a new platform, a new kind of currency — with stock that is easily traded — and a new audience of Wall Street traders.

If the brand’s sales continue to double, growing potentially through retail and matching Kardashian’s global reach, stock traders will love the business all the more.

But they are also a fickle bunch and can turn quickly on businesses that come with big growth prospects and big promises, but falter in some way or even just don’t meet those expectations.

A wave of IPOs in 2021 — including buzzy names like Warby Parker Inc. and Allbirds Inc. — ran headlong into the realities of the market and have seen their valuations plummet.

Still, the IPO cycle seems to be starting back up despite worries about consumer spending, high interest rates and the rest of it.

Most of the players seen as IPO candidates this time though appear to have better growth prospects than the direct-to-consumer players that dominated the wave of offerings two years ago.

Birkenstock is said to be weighing its options with bankers and could go for an offering and fast-fashion giant Shein could also make its introduction, with some speculating that would be an IPO with a valuation in the $60 billion area.

Some companies have already successfully debuted — including the for-profit thrift store Savers — and others are seen as in the wings monitoring the interest in fashion’s new guard, such as Rihanna’s Savage x Fenty.

But much depends on the market, which can be fickle as lingering inflation, high interest rates, consumer sentiment and geopolitical and economic pressures all interact ceaselessly and unpredictably.

In the meantime, Kardashian is clearly keeping busy as she also is reported to be ready to part ways with her Coty Inc.

In 2021, the beauty giant acquired a 20 percent stake in Kim Kardashian’s beauty business, then called KKW Beauty, for $200 million, implying that the brand was valued at $1 billion at the time.

But reports are circulating that the billionaire is in talks to regain total ownership of her beauty business.

Coty and a rep for Kardashian did not immediately respond to request for comment on the reports on the beauty business, which first appeared in The Wall Street Journal.

Nevertheless, Ashley Helgans, an analyst at Jefferies, speculated that it could be an attractive option for Coty, which is currently mulling a dual listing in New York and Paris.

“Though the value of the brand is likely lower today, debt paydown is a priority for Coty and the repurchase could help accelerate deleveraging efforts,” she said.

Since Coty became involved in the business, it has expanded into luxury skin care with a pricey launch with Skkn. Coty CEO Sue Nabi previously said it is performing above expectations and that one of the bestselling products is in fact not a product, but the full line, which retails at $673.

For the time being, it has paused makeup and fragrance, but there have been reports lately that new launches are in the works.

“Assumptions were that the brand would eventually return to makeup and fragrance,” Helgans said. “We estimate brand sales today are a fraction of what they were in 2021 due to the suspension of the KKW brand and the price for the 20 percent stake would be less than the $200 million paid to Kim back then.”

The arrangement with Kardashian is similar to the one that Coty struck with her sister, Kylie Jenner.

Coty bought a 51 percent stake in Jenner’s business, Kylie Cosmetics, for $600 million in 2019.

Most recently, Coty raised guidance for the fourth quarter and full fiscal-year 2023. The group now expects 12 percent to 15 percent like-for-like sales growth for the three months ended June 30, and 10 percent to 11 percent like-for-like sales gains for the full fiscal year.

The talks with Coty are separate from the ongoing fundraising round for Skims.