Nearly 70 fashion and textile orgs ask governments to support resale and repair

A coalition of nearly 70 fashion and textile organizations is urging global governments to implement policy changes that incentivize circular business models like resale and repair. While the global secondhand market is projected to reach $393 billion by 2030, high labor costs and economic disincentives currently hinder broader industry adoption. These policy recommendations aim to make circularity more profitable for brands, helping the sector meet growing consumer demand for sustainable options while reducing environmental impact.

The Ellen MacArthur Foundation’s "Fashion ReModel" project, which involves 13 major brands, highlights that voluntary action alone is insufficient to transition the fashion industry toward circularity. According to ThredUp’s 2026 report, the secondhand market grew 13% in 2025, capturing 10% of global apparel spend, and is expected to reach $393 billion by 2030. Similarly, the European clothing repair market is projected to grow from 2.7 billion euros in 2024 to 3.7 billion euros by 2030. However, these sectors face significant hurdles, particularly high labor costs which account for 35% of resold product costs and 50% of repair costs, alongside inconsistent supplies of used goods.

To address these economic barriers, the Foundation modeled three specific policy levers for the U.S., Canada, and the EU. These include reducing the EU VAT on resale and repair to 6% and eliminating sales tax on resale in the U.S. and Canada. Furthermore, the model suggests lowering employer social security contributions to 10% for circular jobs in the EU and providing equivalent 5% tax credits in North America. The report also advocates for allocating a portion of Extended Producer Responsibility (EPR) fees—estimated at $0.29 per item—to support repair and resale activities, mirroring the "repair bonus" system currently used in France.

Implementing these policy changes could significantly boost profitability, with estimates suggesting gross profit margins could rise to 55% for resale and 44% for repair. This would represent a 23% increase in profitability for European markets and a 12% increase for the U.S. and Canada. Miranda Beckett, project manager at the Ellen MacArthur Foundation, noted that brands currently feel disincentivized by the existing economic system despite strong consumer demand. While waiting for policy shifts, the report suggests that fashion executives focus on supply chain resilience and emissions reductions to build the internal business case for circularity.