Aligning Circular Fashion Business Models with the EU Textiles Strategy

Abstract

This article examines how circular fashion business models can be aligned with the European Union policy framework for sustainable and circular textiles. It analyses resale, rental, repair-as-a-service, and product-as-a-service as distinct but complementary mechanisms for extending garment life, intensifying asset utilisation, and recovering post-consumer value. Methodologically, the study adopts a qualitative conceptual approach based on a thematic synthesis of academic literature, institutional reports, and EU regulatory documents. The discussion focuses on four interrelated dimensions: design for longevity and disassembly; the economic tension between growth and circularity, particularly the risk of sales cannibalisation; data governance and digital traceability through the Digital Product Passport; and reverse logistics as a precondition for value recovery. The analysis suggests that circularity is viable not as a single universal model, but as a category-specific portfolio of strategies whose performance depends on durability, residual value, operational costs, and the quality of product information. The findings further indicate that the most plausible transition pathway for fashion firms is a hybrid management model that combines conventional sales with repair, resale, rental, and take-back channels. Within the evolving EU regulatory environment, competitive advantage will depend less on symbolic sustainability claims than on the organisational capacity to integrate compliance, traceability, and lifecycle monetisation into a coherent business architecture. UDC: [334.72:502.131.1]:677(4EU); JEL: O44, Q52, Q56