A 70-brand coalition is framing fiscal policy as the core barrier to circular scaling. With resale growing 13 percent in 2025 and modeled gross margins of 55 percent under the proposed tax regime, the statement repositions circularity as a regulatory arbitrage problem rather than a consumer adoption challenge.
Nearly 70 fashion and textile companies, including sporting goods brands Decathlon and Arc’teryx, have signed a statement urging governments in the EU, the US and Canada to change tax and regulatory policy to make resale and repair profitable at scale.
The statement, led by the nonprofit Ellen MacArthur Foundation, sets out three proposed levers: cutting value-added tax across the EU and removing sales tax in North America on resold goods and repair services; reducing employer social security contributions for resale and repair roles; and using Extended Producer Responsibility (EPR) funds to expand collection and sorting infrastructure.
The signatories argue that current economics, rather than consumer demand, are the central constraint. Labor represents about 35 percent of the cost of a resold item and about 50 percent of a repaired one, figures they say make it difficult to compete with new production. They also note that, unlike mass manufacturing, sorting and repair work does not achieve comparable scale efficiencies.
In an accompanying report based on the Fashion ReModel project, which tracks 13 brands, the Foundation modeled the combined effect of the proposed measures. It said gross margins could rise to 55 percent for resale around 41 percent for repair. The signatories also point to growth in re-commerce. The secondhand market grew 13 percent in 2025 and represented 10 percent of global apparel spending, according to ThredUp’s 2026 resale report, which forecasts the market will reach $393 billion by 2030.
Leyla Ertur, Chief Sustainability Officer at H&M Group, described the current system as one that “economically penalises” resale, calling the tax changes “one of the fastest and most concrete ways to scale circularity in fashion.”
The statement links the proposals to policy efforts already under way, including the EU’s Ecodesign for Sustainable Products Regulation (ESPR), which introduces product-level repairability requirements, and emerging national EPR frameworks for textiles. The group is calling for tax and labor measures to complement those demand-side rules by improving the business case for repair and resale operators.
