Short-Term and Long-Term Business Benefits of Circular Fashion – Fibre2Fashion

The fashion industry is undergoing a transformation. As the environmental impact of traditional, linear models becomes undeniable, brands are increasingly turning to circular fashion—a system that minimises waste, maximises resource efficiency, and keeps materials in use for as long as possible. Far from being just an ethical or environmental imperative, circular fashion presents compelling business benefits, both in the short term and long term.

This article explores these benefits, illustrating why transitioning to circular practices is not only sustainable but also profitable.

What is Circular Fashion?

Circular fashion involves designing, producing, and consuming apparel in ways that prioritise longevity, reusability, and minimal environmental harm. It contrasts sharply with the linear ‘take-make-dispose’ model by integrating principles of recycling, reuse, and durability at every stage of the product lifecycle.

For businesses, embracing circular fashion offers a competitive edge in an era where consumers, regulators, and investors increasingly prioritise sustainability.

Short-Term Benefits of Circular Fashion

1. Cost Savings Through Resource Efficiency

Circular practices reduce dependency on raw materials, which can be expensive and subject to volatile market conditions. By incorporating recycled materials or designing for modularity, brands save money while mitigating supply chain risks.

•  Example: Adidas’ use of recycled ocean plastic in its Parley collection¹ demonstrates how repurposing waste materials can lower costs while enhancing product appeal.

•   Businesses can also save on landfill fees and waste disposal costs by redirecting waste into productive use.

2. Enhanced Brand Reputation and Customer Loyalty

Modern consumers demand more from the brands they support. A commitment to sustainability fosters trust, attracts eco-conscious customers, and strengthens brand loyalty.

•  Data Point: According to a November 2023 Financial Times report², 64 per cent of consumers globally are worried about sustainability and would change their consumption habits to reduce their environmental impact.

•   Circular initiatives such as take-back programmes, repair services, and transparency in sourcing resonate deeply with these values.

3. Increased Revenue from Resale and Recycling Models

The rise of second-hand and resale markets offers new revenue streams for brands willing to adapt. Platforms like The RealReal³ and Depop⁴ have proven that consumers are willing to pay for pre-loved items, particularly when they come from trusted brands.

•   Many brands are now launching their own resale platforms, such as Patagonia’s Worn Wear⁵ and Levi’s SecondHand⁶, to capture value from this growing trend.

Long-Term Benefits of Circular Fashion

1. Competitive Advantage and Market Differentiation

As circular practices become more mainstream, early adopters will gain a significant competitive edge. Brands that position themselves as sustainability leaders can build stronger relationships with investors, attract top-tier talent, and secure partnerships with like-minded organisations.

•   Circularity not only appeals to eco-conscious consumers but also positions businesses as innovative leaders in their industry.

2. Future-Proofing Against Regulatory Changes

Governments worldwide are introducing stricter regulations to tackle environmental challenges. From extended producer responsibility (EPR) laws to bans on textile waste, businesses operating within a circular framework are better equipped to comply with these regulations.

•   Example: The European Union’s Green Deal includes measures to promote circularity, such as mandatory recycling targets and eco-design requirements.

Proactively adopting circular practices today ensures brands are ahead of the curve when such regulations take effect.

3. Contribution to Global Sustainability Goals

Circular fashion aligns with global initiatives like the United Nations’ Sustainable Development Goals (SDGs), particularly SDG 12 (Responsible Consumption and Production) and SDG 13 (Climate Action).

•   Brands that commit to these goals not only drive positive environmental change but also strengthen their corporate social responsibility (CSR) profile, which is increasingly valued by stakeholders.

4. Longevity in Business Models

Circular fashion encourages durable product design and alternative ownership models, such as rentals and subscriptions. These models create recurring revenue streams while extending the lifespan of garments.

•   Example: Rent the Runway and Hurr Collective have demonstrated the viability of subscription-based fashion, appealing to consumers who prioritise access over ownership.

Case Studies: Circular Fashion in Action

H&M’s Garment Collecting Programme

Since 2013, H&M has implemented a global garment collecting initiative, encouraging customers to return old clothes for recycling. To date, the programme has collected over 172,000 tons⁷ of textiles, which are either recycled into new garments or repurposed for other industries.

•   Impact: H&M not only reduced waste but also engaged customers in a shared commitment to sustainability.

Stella McCartney’s Pioneering Efforts

Luxury brand Stella McCartney has long championed circularity through the use of sustainable materials, partnerships with innovators like Bolt Threads, and her circular design manifesto.

•   Impact: Stella McCartney’s brand⁸ is widely recognised as a leader in sustainable fashion, earning her loyalty from environmentally conscious consumers and partnerships with other forward-thinking organisations.

How to Transition: Key Steps for Brands

•   Invest in Innovation: Technologies such as AI and blockchain can optimise inventory management, enhance transparency, and track materials throughout the product lifecycle.

•   Foster Collaborations: Circular fashion requires partnerships across industries, including recyclers, logistics providers, and sustainability organisations. Collaboration unlocks resources and expertise that individual brands might lack.

•   Educate Consumers: Brands must actively educate their audience about the benefits of circularity. Providing information on how products are made, maintained, and recycled encourages informed purchasing decisions.

Conclusion: Circular Fashion as a Strategic Investment

Circular fashion is no longer a future concept—it is a present-day necessity. For businesses, the transition offers tangible benefits in the short term, including cost savings and enhanced reputation, while setting the stage for long-term success through competitive advantage, regulatory readiness, and contribution to global sustainability goals.

By investing in circularity, brands can create a more sustainable and profitable future for themselves and the planet. The time to act is now—because the future of fashion belongs to those who embrace the principles of circularity today.