Global sustainability initiative Fashion for Good, in collaboration with global professional service provider Accenture Strategy, has launched a new report today that for the first time explores the financial viability of circular business models in the fashion industry.
â€œThe Future of Circular Fashion: Assessing the Viability of Circular Business Modelsâ€ looks into three different models â€“ rental, subscription-rental and recommerce, to assess the financial viability of each when adopted in four different market segments â€“ value, mid-market, premium and luxury. With established brands and retailers being slow to adopt circular models, the report presents further incentives for implementation, helping to identify where circular models are attractive today and the critical levers to enhance their viability in the future.
â€œWe believe this study can drive the implementation of circular models and trigger much needed in-depth discussions around this topic by presenting businesses with actual quantified opportunities related to the adoption of circularity by fashion brands,â€ said Fashion for Goodâ€™s managing director Katrin Ley in todayâ€™s press release.
The fashion industry in its current form is not sustainable; raw material consumption, pollution and waste contribute to the accelerating environmental footprint. Thus the urgent need for a transition towards a more circular system. However, one of the main barriers that brands and retailers face is a lack of understanding how circular models can be financially viable. Hence, the report explores how all three of the models can be financially viable for existing fashion retailers, presenting a strong case to build circular business models.
â€œWith consumers increasingly buying from brands that have a strong purpose that aligns to their personal values and beliefs, particularly on environmental and social issues, it is imperative that retailers take action to create a more sustainable industry. Circular business models can deliver tremendous value to retailers, enabling them to eliminate waste, drive positive impact across the fashion value chain and improve their competitiveness,â€ said Harry Morrison, managing director of Accenture Strategy, in the press release.
â€œThere has never been a better time to commit to the circular economy. Technological advances, infrastructure improvements, innovative start-ups, new circular design practices, shifting consumer preferences and increasing regulatory pressure are creating an environment where established fashion retailers can pursue circular economy initiatives with confidenceâ€, finds the report.
It will be presented on the morning before the opening of the Copenhagen Fashion Summit on 15th May. Both Ley and Morrison will provide insights on key levers for success for retailers preparing for circular business models and highlight key findings to signatories from the Global Fashion Agenda.
Courtesy: Fashion United
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