New garments continue to enter the market at unprecedented rates, with global production projected to reach 147 million tonnes by 2030 and 92 million tonnes of textiles waste generated each year. The need to rethink fashion’s linear model has never been more urgent. Extending the life of our clothing through circular business models (CBMs) such as resale, repair, rental and upcycling represents a powerful lever to decouple growth from the making and selling of new product.
Despite this potential, sector-wide adoption of CBMs is still at an early stage. Brands face barriers around commercial viability, operational complexity and internal resistance. As a result, pilots stall, customer engagement struggles to gain traction, and investment remains cautious.
However, the opportunity is undeniable. Compared with traditional purchasing, CBMs can reduce the environmental footprint of clothing by 14–26%. UK circular industries have outpaced linear sectors, delivering 3.1 percentage points higher annual growth in value since 2020. Circular models aren’t just environmentally necessary, they are economically advantageous.
For fashion, embracing circularity is not just another sustainability initiative; it’s a strategic imperative.
Turning ambition into action
2026 to 2030 will be pivotal for accelerating circular textiles and delivering impact at scale requires collective action. WRAP has spent the last decade building sector-leading knowledge and insight to support this across circular design, circular business models and closing the loop on materials.
Our circular business model guide, citizen insight research, and displacement rates reports provide practical guidance to help organisations design, implement, and measure the environmental benefits of CBMs. With the focus shifting to operationalising and scaling these models, we have developed a portfolio-led approach to CBMs to help accelerate the textiles industry’s transition to circularity.
"The UK Textiles Pact is a strategic enabler – providing access to robust data, actionable tools and collaborative learning. A portfolio approach is essential because there is no single silver bullet that’s going to fix the linear economy… it’s helping us reduce risk and scale more confidently and effectively." Phillipa Grogan, Head of Sustainability, Nobody’s Child
Innovating with portfolio CBMs
There is no “one-size-fits-all” solution to adopting CBMs. Organisations need a tailored strategy. WRAP’s portfolio approach supports this by combining elements of new and existing models, such as product warranties with repair, or rental with resale, enabling companies to build a balanced portfolio of circular models.
A portfolio approach to CBMs improves integration and helps create more resilient, tailored services. Our research shows that organisations adopting a portfolio approach tend to outperform single-model strategies. For example, The North Face has built a strong resale offering alongside its warranty programme. Nobody’s Child offers rental and new purchases side by side on its website, with repair and alteration services integrated into its loyalty programme.
Four Innovation Lenses for CBM success
To support the rollout of a portfolio approach, we have identified four interconnected innovation lenses that businesses can use to implement circular offerings: the customer lens, the operational lens, the data and technology lens, and the community lens.
Customer Lens
Customers are the linchpin of circularity, meaning organisations must be genuinely customer-centric when designing and managing CBMs. Applying a customer lens ensures businesses respond to real needs and expectations, enabling them to deliver convenient, compelling circular offerings through seamless customer journeys.
Operational Lens
When implementing and scaling CBMs, businesses often hit barriers around reverse logistics, data integration and product recovery. By adapting and improving their operations, businesses can turn these challenges into sources of value and embed CBMs into their core processes, supported by measurable KPIs.
Data and technology Lens
Data and new technologies are critical to unlocking circularity at scale. Applying a data and technology lens enables organisations to turn information into action, supporting smarter, evidence-based decision-making and automating manual processes. This improves product tracking across multiple lifecycles, enhances customer experience, and makes circular models more viable, scalable, and transparent.
Community Lens
CBMs thrive when they are built around communities. A community lens shifts businesses from one-way transactions to trust-based, two-way relationships. These models generate value beyond revenue, supporting upskilling, green jobs and waste reduction, and helping to normalise CBMs in everyday life.
Our research shows that organisations prioritising one or more of these lenses — such as customer and community, or data and technology alongside operations — are better equipped to articulate value and translate ambition into action.
Portfolio-led CBMs can also drive customer acquisition. In our research, some brands report that up to 7% of new customers are brought in through rental and up to 25% through resale. Improved inventory visibility and returns management reduce waste and excess stock, delivering cost efficiencies and turning damaged or returned items from an operational cost into a future revenue stream.
For us, a portfolio-led approach combined with innovation lenses provides a robust framework for growing CBMs at scale. This is why we use this model as the backbone for supporting the businesses we work with to design, optimise, and scale their circular services.
"By combining rewear with digital resale, upcycling and curated collections, we are building a range of products to appeal to a wider audience. Portfolio business models let us pair strong community-based shops with growing online channels that have international reach."
Looking ahead – CBMs in 2030
Aligning the right product with the right business model and the right customer is essential for success.
CBMs won’t suit every product or every customer. However, they are set to become a normalised part of how we buy, use, resell, repair, and donate garments, playing a crucial role in enabling circular growth.
Extended Producer Responsibility (EPR) and the Ecodesign for Sustainable Products Regulation (ESPR) will be fundamental mechanisms for accelerating the circular transition. However, regulation alone will not determine who succeeds. Businesses that move beyond compliance and embed CBMs into their core strategy will shape the market rather than react to it, and will be best placed to strengthen unit economics, build operational resilience and position themselves for long term growth while leading the shift towards Circular Living.