Circular Fashion Market Report 2026

The circular fashion market size has grown strongly in recent years. It will grow from $6.48 billion in 2025 to $7.04 billion in 2026 at a compound annual growth rate (CAGR) of 8.7%. The growth in the historic period can be attributed to rising environmental awareness among consumers, increased textile waste generation, early adoption of sustainable fashion practices, growth of ethical fashion brands, expansion of second-hand clothing markets.

The circular fashion market size is expected to see strong growth in the next few years. It will grow to $9.84 billion in 2030 at a compound annual growth rate (CAGR) of 8.7%. The growth in the forecast period can be attributed to growing regulatory focus on textile waste reduction, rising investments in circular supply chains, increasing consumer preference for sustainable apparel, expansion of digital resale platforms, advancements in textile recycling technologies. Major trends in the forecast period include increasing adoption of recycled and reused textiles, rising demand for durable and long-lasting apparel, growing popularity of resale and rental fashion models, expansion of closed-loop apparel production systems, enhanced focus on transparency and traceability.

The increasing awareness of the environmental and social impacts associated with the fashion industry is anticipated to drive the growth of the circular fashion market. This concern is fueled by the industry's excessive resource consumption, significant waste generation, and labor exploitation, all of which adversely affect ecosystems and communities. Circular fashion addresses these issues by promoting sustainable practices such as recycling, upcycling, and extending the lifespan of garments, ultimately reducing waste and mitigating the industry's environmental and social footprint. According to research from Northumbria University in August 2023, the fashion and textile industry is responsible for 8% of global greenhouse gas emissions and 20% of wastewater production. It consumes more energy than both the aviation and shipping sectors combined, with its full environmental impact remaining largely unknown due to its complexity and extensive global operations. Consequently, this growing concern is propelling the circular fashion market forward.

Leading companies in the circular fashion market are concentrating on developing innovative products utilizing recycled polyester to lessen environmental impact and promote sustainable, closed-loop production processes. Recycled polyester is a sustainable fabric created from repurposed plastic materials, such as polyethylene terephthalate (PET) bottles, converted into fibers for clothing and textiles. This approach reduces waste and conserves resources compared to the production of virgin polyester. For instance, in April 2024, Lululemon, a Canada-based manufacturer of athletic apparel and accessories, introduced the Packable Anorak jacket, crafted from enzymatically recycled polyester. This anorak is made from a blend of materials, including mixed plastic waste, Lululemon apparel that has reached the end of its lifecycle, and carbon emissions captured during industrial processes. This innovative strategy represents a significant advancement toward textile-to-textile recycling.

In May 2025, MySize Inc., an Israel-based provider of AI-driven retail solutions and omnichannel e-commerce platforms, acquired New Percentil, S.L. for approximately €610,000 ($679,000). Through this acquisition, MySize aims to enter and expand within the circular fashion and re-commerce market by integrating resale infrastructure to deliver a premium second-hand marketplace and develop a “Circularity as a Service” offering for fashion brands. New Percentil, S.L. is a Spain- and Europe-based managed marketplace for second-hand fashion, providing a logistics-supported platform for quality-vetted pre-owned garments and re-commerce services across several European countries, including Spain, France, Germany, and Italy.

Major companies operating in the circular fashion market are Nike Inc., Industria de Diseno Textil S.A., Adidas Group, H&M Group, Fast Retailing Co. Ltd., Gap Inc., Hermes International S.A., VF Corporation, Guccio Gucci S.p.A., PUMA SE, Lululemon Athletica Inc., Ralph Lauren Corporation, Levi Strauss & Co., Prada S.p.A., Everlane Inc., Reformation, Eileen Fisher Inc., Patagonia Inc., Rothy’s Inc., Ecoalf Recycled Fabrics, SL, Stella McCartney Ltd., Outerknown LLC, LANIUS GmbH, MUD Jeans International B.V.

North America was the largest region in the circular fashion market in 2025. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the circular fashion market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the circular fashion market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

The circular fashion market consists of sales of recycled apparel, upcycled accessories, rental footwear, secondhand clothing, and biodegradable textiles. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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