An Innovative Circular Business Model for the Luxury Fashion Industry

Marcos Komodromos (), Jinju Heo, Tatiana Harkiolakis and Daphne Halkias
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Marcos Komodromos: University of Nicosia
Jinju Heo: Glion Institute of Higher Education
Tatiana Harkiolakis: ISC Paris Business School
Daphne Halkias: EIM - European Institute of Management

Chapter Chapter 3 in The Evolution of Luxury Brands, Volume II, 2025, pp 65-94 from Palgrave Macmillan

Abstract: Abstract The luxury fashion industry, projected to reach $84.04 billion by 2025, is increasingly shifting towards innovative circular business models to meet consumer demand for sustainable practices. This study explored the transition from traditional linear models to circular economies, highlighting the challenges and opportunities in luxury fashion. Using a content analysis of relevant literature, key findings revealed that while luxury brands publicly support sustainability, many have yet to integrate it fully into their business models. The research suggests that embedding circularity enhances brand equity and creates a competitive advantage. Moreover, the study underscores the role of strategic planning in facilitating this transition and stresses the importance of aligning sustainability initiatives with consumer values. Results showed that internalized consumers prioritize economic and ethical dimensions of sustainability, while externalized consumers focus on legal and philanthropic aspects. The study calls for future research and policy frameworks that foster circular economy adoption in luxury fashion.

Keywords: Model; Sustainability challenges; CSR practices; Sustainability in luxury fashion; Luxury fashion; Business model; Consumption; Luxury consumption; Luxury; Luxury brands; Innovation; Strategic; Circular economy; Circular strategies; Strategy; Luxury fashion industry; Economy practices (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pscchp:978-3-031-96680-4_3

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DOI: 10.1007/978-3-031-96680-4_3

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