‘We Need to Play With the Same Rules as Others’: Circular Fashion Start‐Ups and the Emerging Logic of Circularity

Ines Kaivonen, Nina Mesiranta and Elina Närvänen

Business Strategy and the Environment, 2026, vol. 35, issue 1, 424-437

Abstract: Due to its activities' severe environmental and social consequences, the fashion industry urgently needs transformation. The shift to a circular economy is widely recognised as a key solution, with circular fashion offering a pathway to reshape the industry's dominant linear model. Entrepreneurship and especially circular start‐ups play a crucial role in this transition. However, in fashion, moving towards circularity is not only a business shift but also an institutional transformation. As this transition involves navigating multiple and sometimes conflicting institutional logics, we examine how circular fashion start‐ups (CFSs) engage in institutional work to shape these logics. Based on 13 thematic interviews, we identify four key themes (aspiration for novelty, broadening the audience, revaluating fashion and redefining roles) through which CFSs legitimise their businesses within the linear fashion market system. Simultaneously, we show how these efforts contribute to the emergence of a distinct logic of circularity and provide useful managerial implications for practitioners.

Date: 2026
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