What: Kearney's Circular Fashion Index 2025 reveals slowing progress in circular fashion implementation, with only 5 brands scoring above 7.0 points despite growing regulatory pressure and market maturity.

Why it is important: The widening gap between industry leaders and mainstream brands signals a critical transition point where circular fashion must evolve from isolated initiatives to systemic transformation to meet intensifying regulatory demands.

The fifth edition of Kearney's Circular Fashion Index demonstrates both progress and persistent challenges in the fashion industry's journey toward circularity. Covering 246 brands across 18 countries and five product categories, the report reveals a growing divide between frontrunners and mainstream players. While overall scores have improved, with average and median scores reaching 3.40 and 3.20 respectively, progress is slowing. Most brands remain stuck in moderate maturity levels, struggling to move from pilot projects to scaled implementation. The strongest improvements are seen in circular design and closing the loop initiatives, with companies like Arc'teryx, ARKET, and Decathlon joining innovative projects. However, secondary market models such as repair, resale, and rental continue to lag, with 65% of brands scoring "limited" on repair services. As regulatory pressure intensifies, particularly in the EU and US, the industry faces a critical moment to transform circular ambitions into systematic execution.

IADS Notes: The Kearney CFX 2025 findings align with significant industry developments over the past year. In March 2025, The Retail Bulletin reported widespread adoption of multiple circular approaches by major retailers, validating the report's observation about maturing market practices. This evolution is driven by intensifying regulatory pressure, as evidenced by February 2025's EU regulations on textile waste management and France's landmark legislation against fast fashion. The market's complex dynamics are reflected in contrasting performance metrics: while January 2025 saw The RealReal's stock surge 444% and Nuuly grow to 297,000 subscribers, many platforms still struggle with profitability, echoing the CFX's findings about execution challenges. Consumer behavior continues to shift significantly, with December 2024 data showing 41% of consumers choosing repairs over replacement. The operational transformation is gaining momentum, as seen in October 2024 when major brands began integrating sustainable materials into regular collections rather than just pilot projects, demonstrating the industry's move from experimental to systematic implementation of circular practices.

The Kearney CFX 2025 report: circular fashion growing but still not at scale