Circular Revenue Model
Circular revenue models focus on generating income while promoting sustainability by recycling, upcycling, and reusing materials. These models offer fashion companies the opportunity to create value not only through direct sales but also by adopting innovative approaches such as subscription services, rental models, and digital platforms. By aligning their revenue strategies with sustainable practices, companies can reduce waste and improve their environmental footprint while maintaining profitability.
This unit explores the key components of circular revenue models and how they can be implemented in the fashion system to drive both sustainability and profitability.
Case Studies
For Days
For Days is a zero-waste fashion brand that has implemented a subscription-based model, allowing customers to exchange old garments for new ones. The old garments are then recycled into new items, closing the loop on textile waste and promoting a sustainable revenue stream based on recycling and customer loyalty.
Learn more about For Days
The R Collective
The R Collective is a sustainable fashion brand that creates collections from surplus fabrics, promoting recycling and upcycling. The brand collaborates with designers to create limited-edition pieces using waste materials, creating a unique revenue model based on transforming waste into fashion, thus contributing to both sustainability and profitability.
Learn more about The R Collective
Eileen Fisher Renew
Eileen Fisher Renew is a take-back program that allows customers to return worn Eileen Fisher garments, which are then cleaned, mended, and resold. This circular model generates revenue from both new and previously owned products, while promoting the reuse of garments and reducing waste.
Learn more about Eileen Fisher Renew
The Upcycle Project
The Upcycle Project is a brand that focuses on transforming waste materials into new, high-fashion pieces. By using discarded clothing and textiles, the brand reduces waste and creates a unique product offering that supports a circular revenue model. This approach helps the brand differentiate itself while promoting sustainable fashion practices.
Learn more about The Upcycle Project
References
Case studies
Mud Jeans – Lease A Jeans
Mud Jeans, a Dutch denim company, operates a “Lease A Jeans” model in which users pay a monthly fee to wear jeans and return them at end-of-use. The returned garments are repaired for resale, or shredded and recycled into new denim, generating recurring revenue while keeping cotton fibers in a technical loop.
Project link
For Days – Closed-Loop Membership & Take-Back
For Days is a U.S.-based circular apparel brand built around a membership and swap model in which users can send back worn items in exchange for credit toward new products. Returned textiles are sorted and recycled into new materials, so revenue is generated both from new garments and from ongoing participation in the take-back system rather than one-off sales.
Project link
Eileen Fisher – Renew Take-Back and Resale
Eileen Fisher Renew is a long-running take-back program in which customers return used Eileen Fisher garments in exchange for store credit. Collected pieces are cleaned, repaired, and resold, or remade into new designs, creating an additional revenue stream from existing products while extending garment lifetimes and reducing waste.
Project link
Patagonia – Worn Wear Repair and Recommerce
Patagonia’s Worn Wear program invites users to trade in used Patagonia garments for credit, which are then repaired and resold or recycled. The initiative monetizes repair and recommerce services alongside new product sales, strengthening user loyalty through repair events and storytelling while embedding circular practices directly into revenue generation.
Project link
Levi Strauss & Co. – Levi’s SecondHand
Levi Strauss & Co. operates Levi’s SecondHand, a buy-back and resale model where customers trade in worn jeans and jackets for gift cards. Items suitable for reuse are cleaned and sold on a dedicated recommerce platform, while others are recycled, allowing Levi’s to earn revenue from multiple lifecycles of the same product and reducing reliance on virgin-material-based sales.
Project link
References
Johnson, E., & Plepys, A. (2021). Product-service systems and sustainability: Analysing the environmental impacts of rental clothing. Sustainability, 13(4), 2118. https://doi.org/10.3390/su13042118
Ostermann, C. M., Nascimento, L. S., & Zen, A. C. (2021). Business model innovation for circular economy in fashion industry: A start-ups’ perspective. Frontiers in Sustainability, 2, 766614. https://doi.org/10.3389/frsus.2021.766614
D’Itria, L., & Aus, R. (2023). Circular fashion: Evolving practices in a changing industry. Sustainability: Science, Practice and Policy, 19(1), 2220592. https://doi.org/10.1080/15487733.2023.2220592
Chen, X., et al. (2021). Circular economy and sustainability of the clothing and textile industry. Materials Circular Economy, 3, 1–9. https://doi.org/10.1007/s42824-021-00026-2
Todeschini, B. V., Cortimiglia, M. N., Callegaro-de-Menezes, D., & Ghezzi, A. (2017). Innovative and sustainable business models in the fashion industry: Entrepreneurial drivers, opportunities, and challenges. Business Horizons, 60(6), 759–770. https://doi.org/10.1016/j.bushor.2017.07.003