Americans throw away 25bn pounds of clothing, shoes, accessories and other textiles every year. While some of it gets resold at thrift stores or recycled, most of it – 85%, in fact – goes straight to the dump. Nearly 13m tons of textiles were dumped into landfills in the US in 2013, the most recent year for which there is data from the Environmental Protection Agency (EPA).

A new venture called the Renewal Workshop aims to reduce some of that waste by repairing clothes that customers have returned to stores as well as items that are damaged during manufacturing. While it’s difficult to find current estimates on just how big of a problem this is, clothing makers toss out around 10%-12% of garments with simple flaws such as broken zippers, according to a 2006 estimate from the book, Apparel Manufacturing: Sewn Product Analysis. By correcting light damage on clothing that ordinarily wouldn’t make it to sales racks – think jackets with ripped linings, pants with holes and stained shirts – the Renewal Workshop hopes to head off the inevitable garbage dump.

The project, which launched in June, has attracted more than $1m in venture funding from VTF Capital, based in Las Vegas and San Francisco, and Closed Loop Ventures in New York. “They’re building a whole new infrastructure for a whole new phase of life in the apparel industry,” said Jen Taylor, brand manager and director of creative development for Mountain Khakis, a Jackson Hole, Wyoming-based outdoor apparel company that recently partnered with the workshop.

The workshop is the latest in a number of secondhand clothing websites that have popped up in recent years, including San Francisco-based thredUp, which allows customers to buy and sell used clothing online and donates or recycles the items that don’t pass muster. Twice, a similar Bay Area-based company for buying and selling secondhand clothes, was acquired by eBay in 2015.

At first glance, the Renewal Workshop may seem like a glorified tailoring operation. But co-founder Jeff Denby, who previously co-founded Pact Apparel, a Boulder, Colorado-based company that makes sustainable, organic cotton clothes, said the business is based on volume. The company will take garments from sustainability-focused partner companies such as prAna, Indigenous, Toad & Co, and Ibex, who pay a membership fee to the Renewal Project. The clothes are sorted into problem groups, such as those that need repairs on zippers or pockets, and the workshop makes the repairs in batches. “Instead of being a repair center, which is not very efficient, we’re acting like a production facility,” said Denby.

The repair work will take place at the workshop’s warehouse in Cascade Locks, Oregon. Soiled items will be cleaned with a waterless washing system from Tersus Solutions, a Colorado-based company that has developed a process using pressurized carbon dioxide. Repaired garments will then be co-branded with a Renewal Workshop label and sold on the workshop’s website at 30%-50% off the original listed price. The partner brands get an undisclosed portion of the sales when the co-branded items are purchased, since the Renewal Project doesn’t pay them for the damaged goods.

The factory can process hundreds of thousands of garments per year, according to Denby. “When we get the product, it’s pretty low value, but it allows us to flow it through our system in a way that’s really efficient,” he said. “We’re able to capture a margin off that that makes the business sustainable.”

The company currently employs five people, though the plan is to expand to 30 as soon as it can be scaled up, something Denby anticipates will happen soon.

Pop-up sales are scheduled next year at stores such as Nordstrom and Whole Foods, according to co-founder Nicole Bassett, a former director of sustainability at Southern California clothier prAna. She says partner brands will also be able to sell their refurbished items through their own stores by the end of 2017. There are also plans in the works for so-called upcycling, creating new products such as aprons out of the clothes that can’t be repaired.

So far, the process seems to be working. Mountain Khakis’ Taylor said that of the 171 test garments sent to the workshop last month, 99% were successfully cleaned or repaired. She anticipates the clothes will appeal to the burgeoning maker movement. “It adds some cachet, actually, to the product,” Taylor said. “The kind of Etsy element of the unique repair is going to lend some individuality to each of these styles.”

And because the workshop generates reports on the types of repairs each product needs, the partner brands can improve their manufacturing efficiencies, she said. Basic reporting on what types of repairs the clothes needed comes with the membership fee, but brands can pay extra for more detailed reporting.

Tasha Lewis, an assistant professor at Cornell University’s Department of Fiber Science and Apparel Design, said the business structure holds promise. “It is very similar to what off-price stores used to do more of in the past – basically selling second quality goods to a different consumer,” she said. “I like the idea of making the repairs/cleaning the items before reselling.” Lewis is currently working with clothing retailer Eileen Fisher on its Green Eileen project, which recovers and cleans the brand’s pre-owned garments, then resells them at a discount.

The key to making such a business work is to be extremely efficient with a supply chain that already has thin margins. Logistical costs would need to be minimized, according to Deishin Lee, an assistant professor of operations management at Boston College. “In theory, it should be a great idea, and if there’s a market out there, it could at least mitigate an environmental problem and they could make a decent profit,” Lee said.

But a business based on repairing damaged goods strays from the typical supply chain – after all, the aim of the original manufacturer is to produce quality clothes from the start. In the Renewal Workshop model, “Your ‘supplier’ is actually not interested in supplying you, per se,” Lee said. “In fact, the goal is to actually have nothing to supply to you in the case of factory seconds.”

Plus, it’s difficult to predict how the business will play out on the consumer side. It may prove hard to match up items with customers since the nature of seconds means each style may only be available in a limited number of sizes. “They won’t get, let’s say, 100 pieces of the same size and the same color in the sizes that they need,” said Ilse Metchek, president of the non-profit California Fashion Association. “Damages don’t go across the board.”

Even if shoppers flock to the reworked versions of their favorite brands, the co-branding relationship can be a double-edged sword, according to Lewis. A partner brand’s image could suffer if consumers think the quality has been compromised –but the same thing could happen if shoppers decide they like the discounted clothes more than the full-priced versions.