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Kearney's 2025 Circular Fashion Index: An In-Depth Look

On July 16, 2025, global management consulting giant Kearney unveiled its fifth annual Circular Fashion Index Report (CFX 2025). This important document assesses how well the fashion industry is adopting circular practices worldwide. Covering 246 apparel brands across 18 countries and five core product categories—fashion, sports, outdoor apparel, underwear, and footwear—the report provides a detailed and data-driven evaluation of these brands across seven crucial dimensions that encompass the lifecycle of their products.

Key Findings and Observations

The CFX 2025 report shines a spotlight on several critical observations:

1. Persistence of Top Brands: The report shows that while leading companies are continuing to excel, a significant segment of industry players is struggling to translate circularity intentions into widespread practices. Only two new brands joined the top ranks, illustrating stagnation within the industry.

2. Stuck Between Ambition and Execution: According to Nora Kleinewillinghoefer, a partner and co-author of the report, many brands appear caught between ambition and practical execution. While some are making strides in certain areas, they are not achieving comprehensive transformation across all dimensions, often treating circularity efforts as isolated projects rather than core operational strategies.

3. Moderate Engagement Dominates: The report indicates that over 70% of brands now operate within a 'moderate' implementation zone, suggesting that the concept of circularity is gaining traction within mainstream strategic commitments. However, merely 3-5% of brands have achieved extensive implementation, highlighting a significant gap in execution.

4. Regional Performance Disparities: In terms of geographic performance, Europe and North America lead with average scores of 3.6 and 3.4, respectively. Notably, Europe has shown remarkable improvement (+0.4 points) driven by stricter regulations and policy measures, including repair bonuses and extended producer responsibility initiatives.

5. Need for Systemic Change: Experts like Namrata Shah argue that while there have been moves toward 'moderate' maturity in circular design, it is clear that businesses must adopt a more strategic approach. Circularity should be perceived not just as a compliance requirement but as a potential growth driver. Brands need to integrate circular principles deeply into their design processes, sourcing strategies, and sales methodologies.

6. Execution Gaps Must Be Addressed: Several Kearney partners, including Dario Minutella, emphasize that execution gaps are not stemming from a lack of awareness but are due to inadequate infrastructure, lack of systemic integration, and insufficient cross-functional collaboration. Incremental improvements are no longer enough; brands must shift towards providing evidence of their efforts at scale.

The Path Forward

According to the report, most of the easy advancements—such as awareness campaigns and localized take-back initiatives—have been largely exploited. Moving forward, brands will need to adopt a more integrated approach to circular practices across their range of offerings and geographical markets.

As the regulatory landscape transitions from advisory to enforcement, this industry faces a pressing need to escalate its efforts. The call to action is clear: brands must harness their ambitions and deliver concrete evidence of circularity through strategic, systematic execution.

Conclusion

The Circular Fashion Index 2025 serves as a pivotal assessment of the fashion industry's journey towards sustainability. Kearney's insights highlight the growing commitment to circularity, coupled with the challenges that remain. By addressing execution gaps and embedding circular principles into every aspect of their operations, brands can begin to fulfill their potential and lead the way toward a more sustainable future in fashion.

For further insights or to view the full report, visit Kearney’s official website.