Businesses and organisations across the fashion and textiles industry have endorsed this business statement calling for policy action.
Read the statement
We are fashion and textile businesses calling for policies that help circular business models scale. Circular business models such as resale and repair don’t just offer a clear path to resource efficiency and job creation; they are a multi-billion dollar economic opportunity. We are calling for decisive policy leadership to reduce the existing economic barriers that prevent circular business models from scaling.
We need a circular economy for fashion, but it is being held back. Keeping materials in use at their highest value requires a combination of circular product design, circular business models, and end-of-life infrastructure (including textile-to-textile recycling). Circular business models, such as resale and repairrepairOperation by which a faulty or broken product or component is returned back to a usable state to fulfil its intended use., present an unrivalled opportunity for businesses to stay competitive, desirable, and resilient. By diverting products from waste, they can start to decouple revenue from production. However, current investment and policy disproportionately favour product design and end-of-life infrastructure, and businesses embracing circular business models are facing market barriers to scaling. While these efforts to improve design and infrastructure are vital and must continue, policy intervention is also required to unlock the full economic potential of circular business models.
Today’s system favours resource-intensive business models while it penalises repair and resale. Current infrastructure and government policies often make producing new items from virgin materialsvirgin materialsMaterials that have not yet been used in the economy. more profitable than keeping existing ones in use. Many manufacturing processes have been optimised for identical, high-volume production. By contrast, circular business models have labour-intensive processes (e.g. sorting, cleaning, listing, repair), which bring lower margins, and high taxes and costs that hardly decrease at scale. Businesses reselling products are taxed at every transaction, not just at the original point of sale. It is this economic trap that disincentivises keeping products in use.
Policy can change this. Businesses are already choosing to invest in circular business models in spite of the economics; policy is what makes those choices viable at scale. We need targeted policy interventions that fix the broken economics of resale and repair.
Governments that implement this policy mix can turn circular business models into a source of economic growth that uses fewer resources, produces fewer emissions, and creates more local jobs. By addressing both supply and demand, these policies make circular services more profitable for businesses and more available and affordable for consumers. Crucially, they can close the profitability gap with linear models. For instance, brands that retain cost savings could see gross margins reach up to 55% for resale and 41% for repair. Alternatively, if the majority of savings are passed on through lower prices, modelling suggests that the resale market share could have reached 12% in the EU and 14% across the US and Canada in 2023 had these policies been in place. This would unlock billions in revenue, enhance business resilience, and reduce dependence on new production.
With this statement, we publicly express our support for a policy mix that allows circular business models to scale and we call on all governments to enact targeted policies to make a circular economy for fashion commercially viable and competitive. We will constructively engage with governments and other stakeholders, and provide relevant business insights to strengthen this call.
Download the business statement
A unified call for a policy mix to support circular business models
"We’ve seen real progress on circular business models, but they remain a small part of a very large industry. Without policy that actively removes economic barriers, there’s a risk that circular models will stay stuck as a niche instead of becoming the norm. This is what The Fashion ReModel policy statement sets out to change.”
Christiane Dolva, Head of Innovation, Research & Demonstration, H&M Foundation
"At Reformation, we believe that the future of fashion is circular, but reaching that future at scale requires a more supportive policy landscape. While we are already investing in models that keep products in use longer, we need regulations that help remove the barriers to scaling these efforts industry-wide. By aligning legislation with our collective sustainability goals, we can accelerate the transition to a circular economy and ensure that keeping materials in circulation is the standard for everyone."
Sanne Butot, Senior Manager, Sustainability Data & Compliance
Endorsers support the overall vision and recommendations within this statement. The statement reflects areas of broad alignment, but does not necessarily represent the detailed views of every endorsing organisation on all aspects of it, and does not reflect any agreement by any endorsing organisations to take any individual or collaborative actions.
