Textile processing in Flanders is undergoing a major transition. Collection for reuse alone is no longer sufficient: sorting, pre-processing and recycling of non-reusable clothing are becoming essential. The Living Lab 'Labs on Fibre' investigated how these residual textile streams can be locally prepared for recycling. Within this project, VITO demonstrates how collaboration, economies of scale, technological choices, and strategic location selection can pave the way towards an efficient, circular textile value chain for Flanders.