Sixty-nine prominent fashion and textile organizations have united in a call for governmental policy changes to significantly enhance the viability of resale and repair within the apparel sector. This collective appeal, spearheaded by the global nonprofit the Ellen MacArthur Foundation, aims to level the playing field for circular business models against traditional production methods.
The statement, which includes endorsements from major apparel manufacturers like Decathlon, H&M Group, Lacoste, Primark, and Reformation, alongside leading resale platforms such as ThredUp and Vinted, advocates for a multifaceted approach to policy reform. A central tenet of the proposal is the reduction of value-added tax (VAT) on resold products and repair services across the European Union, coupled with the elimination of sales tax on these activities in the United States and Canada. Furthermore, the group suggests a reduction in labor costs associated with resale and repair operations through lower labor taxes in the EU and the provision of labor tax credits in the U.S. and Canada.
The initiative also champions the implementation of Extended Producer Responsibility (EPR) policies. As detailed in an accompanying Ellen MacArthur Foundation report, these policies would introduce additional costs for primary production, thereby incentivizing resale and repair. The revenue generated from these EPR schemes could be directed towards building essential infrastructure for collection and sorting of used garments, facilitating smoother operations for resale and repair services.
The push for these policy changes comes at a time when the fashion resale and repair markets are demonstrating substantial growth. The global second-hand market experienced a 13% expansion in 2025, capturing 10% of worldwide apparel spending, and is projected to reach $393 billion by 2030. While the repair market is more challenging to quantify, its value in Europe alone was estimated at 2.7 billion euros in 2024, with a forecast of 3.7 billion euros by 2030.
Despite these promising market trajectories, fashion sustainability and circular models face inherent challenges. High labor costs, which account for approximately 35% of the cost of a resold item and 50% of a repaired item, and the inconsistent supply of pre-owned goods are significant hurdles. The Ellen MacArthur Foundation report highlights that while increasing production of new items leads to economies of scale, processing a large volume of individual used items demands disproportionately more effort per unit.
This new report is an extension of the Fashion ReModel project, initiated in mid-2024 by the Ellen MacArthur Foundation. This project collaborates with thirteen brands to increase their revenue from circular business models over three years. Early feedback from participating brands consistently indicated that current economic systems disincentivize these circular economy practices.
The report’s modeling explored the impact of three specific policy interventions on the U.S., Canadian, and EU apparel industries. These interventions included reducing EU VAT on resale and repair to 6%, eliminating U.S. and Canadian sales tax on resale, and adjusting labor taxes to lower associated costs for resale and repair jobs. Additionally, a portion of hypothetical EPR fees was allocated to support circular economy infrastructure, mirroring successful subsidy systems like the French “repair bonus.”
Collectively, these proposed policy levers could significantly boost gross profit margins for resale and repair, potentially increasing them by up to 23% in European markets and 12% in the U.S. and Canada. While policy is a critical driver, the report also acknowledges that other factors such as consumer behavior, access to finance for smaller businesses, and product design standards are vital for the sustained growth of circular business models in the apparel industry. Until comprehensive policies are enacted, enhancing supply chain resilience, reducing emissions, and fostering customer engagement remain crucial for building internal support for circular strategies.
Consumers are increasingly vocal about their preferences, and their engagement with the circular economy is growing, creating an expectation for brands and businesses to offer such services. This collective action by industry leaders underscores the urgent need for supportive government policy to foster a more sustainable and resilient textile innovation landscape.
