Why the UK fashion industry is doubling down on circularity amid challenges

As explained by Nigel Lugg, chairman of the U.K. Fashion and Textiles Association, “Robotics and AI can drive significant efficiencies, reduce carbon footprints and eliminate many of the compliance issues associated with overseas production.” He also pointed to reshoring as a crucial step. “The opportunity to reshore volume production is here, but it requires serious investment and long-term collaboration between manufacturers and retailers,” he said.

The U.K. fashion industry, historically a major polluter, is valued at approximately $75.6 billion. In 2024, the U.K. fashion and retail sectors have faced significant challenges, including inflation that’s reduced consumer spending, persistent supply chain disruptions and the ongoing impacts of Brexit, including new import costs and labor shortages. Rising production costs, driven by higher wages and energy prices, squeeze margins, while stricter sustainability regulations demand costly changes to supply chains. In addition, the shift toward e-commerce continues to hurt brick-and-mortar stores, and changing consumer preferences for sustainable and secondhand fashion are forcing brands to adapt quickly to stay competitive. Caroline Rush, CEO of the BFC, said, “Government support is crucial at this stage to help de-risk [industry] investment.”

CFIN members see opportunity for a U.K. fashion industry that embraces circularity, particularly in terms of local knitwear production and job creation through robotics and AI. Recent Dior shows have brought attention to U.K.-based manufacturing, and U.K. brands including Burberry and John Smedley still use local production.

The CFIN reports that 71% of U.K. fashion organizations have included circularity in their five-year strategies, though only 63% have moved beyond pilot phases. That includes John Lewis, which reported $68.32 million in pre-tax profit last year.

Consumer education will be a focus for the organization moving forward, with CFIN planning workshops on sustainable communication for marketers next year. “Scaling circular business models requires a long-term vision, smart customer communication and commercial viability,” said Kathleen Mitchell, commercial director at John Lewis.

In 2025, the CFIN plans to also launch a Circular Business Models Accelerator Program to help brands develop more consumer-facing sustainability initiatives. “Sustainable fashion needs to be aspirational, not just ethical,” to resonate with consumers, Rush stressed.

CFIN is not operating in isolation. U.K. and E.U. regulators are pushing brands to adopt sustainable practices or face penalties. Tim Duret, director of sustainable technology at waste management company Veolia, highlighted the importance of extended producer responsibility, which holds brands accountable for the lifecycle of their products. “EPR regulation will unlock investment in recycling infrastructure and drive circular innovation across the sector,” Durett said.