Fashion retailers team up to trial new closed-loop business models

A coalition of fashion retailers including Ted Baker are set to pilot more resource-efficient business models, such garment repair, resale and rental, to determine whether they are economically viable solutions to the sector's waste challenges.

Fashion retailers team up to trial new closed-loop business models

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Ted Baker, along with luxury fashion platform Farfetch and outdoor clothing brand FW, will explore how new closed-loop business models could help reduce waste and boost profitability through a series of real-world trials. The trials could involve resale, repair, rental, customization or other servitisation models, depending on what the brands feel is the best fit for their business.

The schemes will be convened by the London Waste and Recycling Board (LWARB), retailer C&A’s charitable arm the C&A Foundation and circular economy consultancy QSA Partners, which have dubbed the overarching project “Circular Fashion Fast Forward”.

Its aim is to help these retailers – and others – bring new business models to market for the first time, or to scale up their existing closed-loop offerings. In order to help businesses outside of the project to learn from the participants’ experiences, case studies will be developed and shared across the industry once the pilots are complete.

“The fashion industry needs to rapidly adopt new business models that increase the use of clothing and stop the use of unsustainable materials,” the C&A Foundation’s programme manager Megan McGill said.

“The Circular Fashion Fast Forward project and the participating brands will demonstrate what can already be done today and inspire more industry players to follow. This is a critical step towards a circular fashion sector.”

The three brands taking part in the project are already offering resource-efficient clothing in some form or another. Farfetch recently trialed its first repair service, in partnership with UK-based startup The Restory, and, this month, its flagship resale platform called Second Life went live online. Under Second Life, consumers can access a digital platform that enables them to sell their designer handbags back to Farfetch in exchange for store credit. The bags will then be repaired and resold.

As for FW, the Swiss brand isn’t launching until September, but has already confirmed plans to make products from recycled yarn, design its products for recyclability and to launch a repair offering.

Ted Baker, meanwhile, is currently working towards an ongoing goal of sending no operational waste to landfill and reducing the amount of waste generated throughout its products’ lifecycles by 2020, against a 2016 baseline. In order to help meet this target, it joined the Sustainable Clothing Action Plan (SCAP) – a Government-sponsored industry coalition working to reduce carbon, water and waste across the fashion sector.

Waste not, want not?

Waste is one of the biggest sustainability challenges facing the global fashion industry, which is now so large that it is churning out more than 100 billion garments and 20 billion shoes annually – most of which will be sent to landfill or incineration within just five years of being purchased. The Ellen MacArthur foundation estimates that the global fashion industry loses $100bn each year from clothing that is landfilled or incinerated, and a further $460bn annually through the under-utilisation of clothes.

This is largely due to a lack of mechanical or chemical recycling capacity for textile recycling and compounded by population growth and the proliferation of “fast fashion” business models.

The good news is that big companies across the sector are making shifts towards a more circular business model. H&M, for example, recently unveiled a pre-industrial sized mechanical recycling facility for textile blends in Hong Kong, as it strives to become “fully circular” by 2030. The company also launched its first ever repair and customisation services during 2018.

Also in high street fashion, Urban Outfitters this month confirmed that will begin offering its US-based customers a subscription-based rental service for the first time this summer. Under the service, called Nuuly, consumers will pay $88 (£69) a month to receive a box of clothing in their size and chosen style. The box contents will be worth approximately $800 (£630) each time.  The move follows the success of bespoke clothing rental firms such as White Closet and Rent the Runway.

However, as Farfetch’s director of sustainable business Tom Berry recently told edie. The uptake of resale, repair and rental models has been far quicker to catch on in the luxury sector, as these high-price-point products are usually designed for longevity in the first instance. The likes of Burberry and Stella McCartney have been providing repair services and aftercare advice for years. Academics have argued that a truly circular economy for fashion will not be achieved unless emerging, resource-efficient business models become mainstream and are complemented by wider cultural change.

Sarah George

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