Potentials of Circular Business Models in the Textile Sector

Topic
This thesis examines textile industry practices and the implementation of circularity in business strategies. Ten experts from various companies discuss challenges and opportunities in transitioning to a more sustainable fashion market. Identified barriers include regulations, supply chain transparency, infrastructure, and financing. Opportunities comprise resale, recycling, remanufacture, and repair. Desirability is crucial for sustainable products, as it can increase revenue and strengthen brand relationship. Certifications, such as the cradle-to-cradle standard, should be the future go-to. The paper states that investments for circularity are missing and that awareness and sustainable product design are essential. Further research needs to address incentivization of recycling.

Relevance
Circular economy in the textile industry offers numerous possibilities for adapting business models to become sustainable. Common r-strategies include reuse, repair, remanufacture, and recycle. However, companies face challenges engaging in circular business thinking due to supply chain transparency and too many initiatives. The Ellen MacArthur foundation states that many businesses recognize the need for change but are unsure where to start. Research shows that only a few examples exist where newest technical innovations can be tested in collaboration with the scientific community. This thesis suggests different key activities next to focusing on a specific r-strategy, like the eco-design of desirable fashion products.

Results
Brands have been pushing for new business models and adaptations to become more circular, such as using deadstock materials or fabrics from discarded items. Offering clothes for rent allows consumers to have less proprietary models and enhances control over garment lifecycle decisions. Despite hurdles, the implementation of circular strategies has been successful, especially with the upcoming enforcement of circular regulations in Europe. The reuse model is the most viable business model, while recycling is necessary but not as profitable. With the right framework, many businesses can adopt circular economy measures and r-strategies, leading to a more sustainable future.

Implications for practitioners

• A fashion product will not only sell because it is sustainable, it has to be appealing and desirable in the first place.
• There are many different r-strategies to pick from, but it’s best to focus on one of them and optimize it to the maximum.
• A five year vision and the necessary funds are needed as well as endurance if the business model is not profitable right away.
• Smaller companies should be able to profit from the knowledge that larger corporations have acquired in projects and initiatives with research and development communities. Thus networking in the industry is important.
• Increasing word of mouth is key and can be done with the help of certifications such as cradle-to-cradle standards, storytelling, and sustainability awareness.

Methods
This thesis focuses on the impacts of circular businesses in the textile industry, using a qualitative approach. Expert interviews were conducted to gain a deeper understanding of current businesses and market players. The interviews were conducted with employees, mostly founders or management within the firms to ensure a well-represented view of the companies. The firms chosen had to be at least five years in business, have implemented r-strategies or show sustainability efforts. The study included companies of different sizes, from local sole proprietorships to international corporations, to ensure a comprehensive understanding of the industry's challenges and opportunities.