In recent years, the consumption of clothes has increased extensively due to diminishing quality and low prices of garments along with ever-faster changing fashion trends. The linear business model results in products with a short lifespan and clutter of idle goods. With the growing awareness of environmental and social impact among the consumers; alternative business models (rental/lease, swap, resale) designed to intensify the utilization of clothes and enable sharing activities and collaborative consumption are emerging. However, the market share of these models is still low. This study aims to understand what are the barriers that hurdle; motivations that drive consumers’ adoption to collaborative fashion consumption; and how companies create and configure values to encourage consumers to partake in these innovative business models. Through a systematic literature review of 41 peer-reviewed articles, we found that the drivers for consumers towards collaborative consumption models are steered by economic factors, emotional factors, social factors, and sustainability values. While consumer barriers are namely, financial risk, arrangement, performance risk, social risk, psychological risk/lack of ownership, and lack of trust and information. It was also discovered that the collaborative fashion consumption models, in particular, rental/lease, swap, and resale are different in nature. Finally, we analyzed the existing literature and identified how companies can create, configure and capture values in these business models. This study is one of the very few to explore the interrelationship of the consumer-related drivers and barriers and business perspective. This paper can contribute relevant knowledge to academia as well as to the fashion industry.