In the last seven days two of the biggest cloth nappy manufacturers have gone into administration. Many parent like myself have been left shocked and saddened that this could happen to two well-loved brands. Tots Bots and Close Parent were two of the longstanding pioneers of the reusables market. Pretty much every parent who uses cloth nappies has used nappies manufactured by one or both.
But does the fate of Tots Bots and Close expose a practical problem within the sustainable market which has seen a huge boom in recent years, not least because of the covid-19 pandemic. If we have reached the inevitable bust following the proliferation of the cloth nappy market since 2020 should we really be so surprised?
It’s taken me a little while to write this post. In part because I’m extremely upset about what has happened for the people involved. But also because it feels like there is more to this than just market economics. So how did two of the biggest players in the cloth nappy market find themselves facing serious cashflow issues necessitating that they cease trading? It’s a story that is rooted in the pandemic, changing consumer habits and companies that created unrealistic demand for a product facing up to the cost of living crisis.
What has happened to Tots Bots and Close?
First let’s consider the companies themselves and exactly what has happened in the last few days and the months leading up to the collapse of both Tots Bots and Close Parent.
The Tots Bots story
Tots Bots, a Scottish company, was incorporated in 2003 after moving from the kitchen table of founders Fiona and Magnus Smyth to becoming one of the most recognisable cloth nappy brands. In 2019 shares in the business were sold to well-known sustainable children’s clothing company, Frugi.
The investment by Frugi was not only a testament to the brand’s value built by years of online retail within a fairly small market that consisted of a few main players but also allowed Tots Bots to reach a much bigger market through the stocking of their products in bricks and mortar stores including high street retailer Boots.
But not all was well behind the scenes. The accounts for the financial year ending 31 May 2022 were clear that the company was relying on creditors for finance and that if that support was withdrawn it would not be able to continue as a going concern. This precarious financial position came to a head in March of this year when Frugi (aka Cut4Cloth Limited) narrowly avoided insolvency through a pre-pack administration at the end of November 2022 following cash flow issues. Interestingly the company that bought Frugi, Refined Brands, owns a portfolio of fast fashion brands including Phase Eight, Whistles and Hobbs.
Refined Brands decision not to acquire Tots Bots may have been purely economic. Certainly Tots Bots was having cash flow issues. And a cloth nappy brand was unlikely to be an easy fit for a fast fashion retailer. It may be that the Smyth family, who remained shareholders in Tots Bots, wanted to regain independence of their brand from the fast fashion company. Perhaps it was a bit of both. Either way Tots Bots returned to the sole ownership of the Smyth family, finance was taken out, with the floating charge registered against the company in June and the total number of employees reduced. A rebrand followed along with the release of new products.
But turning the company’s fate around proved to be an impossible task. On 9 November 2023 Interpath Advisory were appointed as provisional liquidators of the company. The liquidators cited “challenging trading conditions, including rising costs and fragile consumer confidence” as the reasons behind Tots Bots demise.
It’s a sad end for a company that had been a genuine trailblazer for sustainability. Unlike almost all other cloth nappy manufacturers in the UK market Tots Bots sought to manufacture its nappies exclusively on home soil. As a result it had a much larger workforce than its peers employing almost 75 people in 2022. All of the remaining 47 employees of Tots Bots were immediately made redundant upon the appointment of the liquidators. It will no doubt be a terrible time for those people who now find themselves without a job, particularly where a decline in textiles manufacturing in the UK will make it harder for them to find equivalent positions.
Close’s story
Close Parent has suffered a similar if not identical fate. The company was incorporated in 2004, originally as manufacturer of baby carriers but soon branching out into cloth nappies and swimwear and accessories. Its key product, the Pop-In nappy was an innovative hybrid nappy which differed from other nappies before or since. At the peak of its business Close employed 18 people and had relationships with factories in multiple countries such as Turkey.
In it’s most recent accounts for the financial year ending 31 December 2021 there is no indication that Close was facing financial issues. And yet on 17 November Close Parent announced it was ceasing to trade, referring to the steep decline in the reusable nappy market over the last 18 months and general slow down due to the cost of living crisis. The company entered into voluntary insolvency the same day.
So what happened?
Let’s go back to 2020.
At the time I was a first-time mum just discovering the range of reusable nappies available, having decided that I wanted to minimise my environmental footprint when my daughter was born. As a result I was caught up in the surge in popularity of reusable nappies that took place during lockdown.
The Instagram boom
And surge it did. At a time when we were confined to our homes the cycle of online shopping and receiving deliveries became a much needed dopamine hit. Without coffee dates and trips out our budgets could be reallocated to these purchases. And that dopamine hit was further reinforced by the Instagram culture of sharing our purchases – whether it was an unboxing story or carefully composed photo of our little ones in their newest nappy.
The community of parents on Instagram using cloth nappies was a lovely thing to be part of (although inevitably there was drama too). Out of this came a proliferation of new brands entering the market. Some parents set up their own businesses sewing their own cloth nappies or clothes to fit over cloth bums in matching prints to our favourite brands. More still saw a potential opportunity to ditch the 9 to 5 by establishing their own retail websites for eco products. Bloggers even branched out into publishing books all about cloth nappies.
Of course existing brands tapped into that popularity and growing community too. Suddenly manufacturers who had previously released a handful of new prints or products each year were bringing out new prints every few months. There was a metaphorical scrum on Instagram to be the account with the inside track when these releases happened. Everyone wanted to be a brand ambassador, affiliate or so called nappy guru (myself included).
A sustainable product becoming unsustainable
While reusable nappies are a sustainable product the culture being created around them was far from it. As far back as June 2020 I was writing about the unsustainable practices of reusable nappy manufacturers. At the time I undertook research into the transparency of many of the well known brands and both Tots Bots and Close came out well. They remained brands I would recommend based on their ethics. I even worked with Close on several projects and found everyone I dealt with at Close to be great to work with and really open in their approach.
But almost inevitably that demand for constant new products slowed. Brands adjusted by driving down prices and essentially de-valuing their product. For those with questionable manufacturing practices the ability to drive down prices was always going to be somewhat easier than those brand that refused to compromise on their ethical values. Tots Bots sought to revitalise its fortunes through the release of its H.E.R.O nappy; Close took to hosting online sales events that had a whiff of Lula Roe about them. Neither strategy was successful.
Are cloth nappies less popular?
No doubt many will attribute their failure to a drop in the popularity and use of cloth nappies I’m not convinced that that is the case. While anecdotally some of those pandemic adopters of cloth may have switched back to disposables when they started to go out and about more, true figures around cloth nappy use are hard to come by. (An Environment Agency study in 2005 concluded cloth nappies had a market share of just 3.6%. DEFRA used the same figures in it 2023 Life Cycle Assessment for Disposable and Reusable Nappies despite the intervening 18 year period.) More likely there are several elephants that has always been lurking in the corner of the room: the first is the secondhand market, the second, trying to maintain ethical values in a capitalist market.
The secondhand market
If you flood the market with a long lasting product then demand for that product bought from new will reduce. In the UK car market (bear with me here) three times more cars are bought secondhand each year than are bought new. Would it really be surprising if similar figures apply to cloth nappies – especially when you factor in a cost of living crisis.
My personal experience is that I bought a huge number of cloth nappies in 2020. I was starting from scratch and I wanted to build a “stash”, try different brands and buy cute prints and matching outfits. By the time my son was born in 2022 these factors had dropped away. I had enough nappies, knew what I liked well enough to identify where I might need one or two new and I no longer had the disposable income to or time to make regular purchases.
Many parents will like me be finding it harder to justify buying from new. And it’s very easy to buy good quality reusable nappies secondhand with very little effort. Close used to include in its FAQs that its nappies were only designed to be used by a single child but the reality is these nappies keep going – I have pop-ins that are on their 5th child and still going strong. Just today I “won” a bundle of pop-ins in my local WhatsApp baby bootsale group (we use them for childcare and with winter drying times it’s good to have a few extras).
Sadly it is those brands that create well-made products that are most at risk when it comes to the secondhand market. Whereas the car industry is constantly bringing out new models with (supposed) innovations making each iteration better than what came before, for a product like cloth nappies the speed of change in much slower. Yes there are some changes in design, new fabrics and of course new prints but the brands producing quality products are effectively competing with their own products that can be bought secondhand.
Can sustainable products succeed against capitalism?
The fate of Tots Bots and Close highlights the broad challenge that companies manufacturing sustainable products face when operating in a traditional capitalist market. These companies with high ethical and quality standards simply can’t compete with companies that are able to flood the market with low quality reusable nappies that can be bought on Amazon for less than the price of a Starbucks coffee.
I’m not trying to blame parents of course. Everyone loves a bargain especially when we are all facing a cost of living crisis. I bought from Close when they hosted their warehouse sales on Facebook. I frequently browse my favourite eco stores to get the best price if there is a product I need.
But what worries me if the impact this has collectively on the market for eco products. It’s something I spoke with Natalie from Small Kind about in the wake of the news last week.
I definitely saw a huge boom in the first lockdown. Nappies kept my business afloat during that time.
Natalie – SmallKind
Natalie is a brilliant advocate for independent retailers, encouraging her customers to understand how the push for discounts, particularly to keep up with the bigger competition can have a devastating impact on independents.
Whether it’s an independent retailer or a well-known manufacturer the problem is the same: how can you continue to thrive and maintain your ethical values when you are competing with others who don’t? Manufacturers like Close had market pressure to reduce their prices both from consumers with an expectation for lower prices and their competitors who could comprise on values to put out a lower quality, cheaper but also less environmentally friendly product.
The tragedy of course is that this trend of quality manufacturers exiting the market continues the quality of products available reduces and parents are more likely to turn away from cloth nappies because the reduction in quality in the products available will likely mean it just feels like too much hard work.
Reversing the trend
I think most of us who use cloth care more about having nappies that are easy to use and don’t leak than we are about the print on the shell. Yet we may soon find ourselves in a situation where style wins out over substance.
So how do we stop that from happening?
It’s the same answer the sustainable living community have shouted countless times before – support small, know who you are buying from, consider their business practices, put quality above quantity and price. If we want sustainable businesses to succeed and be there in the future we need to be supporting them now.
And I’ll be the first to admit that there may be a tension with the sustainable tenets of consuming less and reusing more. But there has to be a middle ground where good quality sustainable brands can still thrive and survive. At least that’s what I’m hoping.
