Circular Fashion Still Struggling to Gain Traction

At most fashion brands, the “low-hanging fruit” for implementing a circular business model – that is, finding ways to reuse, resell and recycle as much product as possible – has already been picked. Those basics include such steps as awareness campaigns, capsule collections and local take-back programs.

But for too many apparel producers, such initiatives remain a siloed endeavor, rather than an enterprise-wide effort. Those conclusions and others are contained in the just-released fifth annual Circular Fashion Index Report from management consulting firm Kearney.

“While our top-ranking companies continued to pull ahead, the majority of brands find themselves stuck between ambition and execution, making progress in some facets, but not transforming themselves across all dimensions in an integrated way,” said Nora Kleinewillinghoefer, Kearney partner, Americas fashion and luxury lead, and co-author of the report. “For most companies we researched, circularity efforts are too often siloed in sustainability departments, rather than being embedded into product development, sourcing, supply chain, and commercial operations.”

The index tracks the industry’s efforts to apply and advance circular practices worldwide. An analysis of 246 apparel brands across 18 countries and five core product categories – fashion, sports, outdoor, underwear/lingerie and footwear – Kearney’s report evaluates their performance across seven dimensions that reflect a product’s full life cycle and beyond.

Here are some key findings from that research:

• While many brands have committed to circularity, few have translated intent into consistent, scaled execution.
• More than 70% of brands are now committing to circular strategies and starting to implement relevant programs, a signal circularity has entered the mainstream with most brands
• Only 3% to 5% of brands have reached the “extensive” implementation level, reflecting significant conversion gap. The leap from moderate engagement to scaled circularity remains rare.

“Our analysis shows execution gaps are not due to a lack of awareness but to missing enablers such as scalable infrastructure, system integration, cross-functional ownership and commercially viable business models,” said Kearney Partner and report co-author Dario Minutella. “The message here is clear: while directionally correct, the industry’s pace must now shift gears. As regulation moves from policy to enforcement, incremental gains are no longer sufficient. Brands need to move from declaring ambition to delivering evidence, systematically, and at scale.”

Click here for the full report, which includes Kearney’s list of the top 10 circular fashion brands (including two newcomers, Arc’teryx and Decathalon), and examples of circular programs at such retailers as The North Face and Hugo Boss.