Circular economy and especially circular business model (CBM), is currently being discussed as a way to enable the fashion industry's transition to sustainable business models wherein pollution and resource waste may be reduced. However, one of the prime reasons for a slow transition is lack of scalability of CBMs operating in the fashion retail value chain. What is lacking in the current discourse is research that summarises and condenses the literature on strategies for how scalability can be attained and what that means in context to CBMs where not only economic values are in focus. Therefore, the main purpose of this paper is to explore the main strategic approaches to scale business models and how these can be applied to CBMs in the fashion retail value chain. To do this, a two-part method is adopted consisting of a systematic literature review of 57 business models and scalability papers followed by a review of activities reported by 76 fashion retail companies on how these have, or are planning to, increase the scale of their CBM initiative. Our suggested model provides a basic understanding of strategies for business model scalability seen from four different business model design perspectives. These are further contextualised for CBMs in the fashion value chain and lessons learned are generated in the form of four central propositions. The propositions account on how organisations can leverage resources from their existing conventional business model for efficient scaling of their CBM initiative, how they can consider strategic partnerships to access complementary resources, while also embarking on adaptability by running business pilots either internally or by engaging in collaborative networks for industry-wide learnings and change.

Resale-based circular business models (CBMs) hold immense potential to contribute towards sustainability in fashion retail. To significantly impact triple bottom line (TBL) sustainability, these fashion CBMs need to be scalable. This paper investigates the challenges for scaling resale-based fashion from a TBL perspective, as well as the strategic resources required to solve these. Based on 15 semi-structured interviews, six key scalability challenges and six main strategic resources are identified. Findings show that even though challenges are mostly referred to in economic terms, environmental and social challenges are also present. The difference is that those challenges are less visible, partly due to the lack of clear and standardised tools and definitions to interpret scale. Lessons from the study can be insightful for practitioners in reflecting on the scalability potential of their CBMs from a TBL perspective and understanding what resources to make use of or develop. 

The scaling of circular business models (CBMs) plays a decisive role in the transformation toward more sustainable business practices. The purpose of this paper is to explore the microfoundations of dynamic capabilities (DCs) involved in the scaling of CBM initiatives. Based on semi-structured, in-depth interviews with 12 Swedish retail fashion companies, this research outlines a variety of microfoundations involved in CBM scaling practices. The Swedish fashion sector offers a rich empirical basis for further exploration of the microfoundations required for the scaling of CBMs. The study is theoretically grounded in a combination of the three DC classes of sensing, seizing, and reconfiguring, and the three scaling logics of scaling out, scaling up, and scaling deep. This combination provides several new insights with respect to the expansion and growth of CBMs. In particular, the research emphasizes the actual activities and processes involved in efforts toward the scaling of CBM initiatives, which have so far only been researched to a minor extent. Furthermore, the application of different scaling logics offers clarity and a constructive understanding of how circular business practices can be scaled beyond the individual firm or CBM initiative. For practitioners, the combination of DC classes and scaling logics into a 3 × 3 matrix offers a tool for the identification, understanding, and organization of the dynamic capabilities required for different scaling logics of CBMs.

Purpose

The purpose of this study is to explore the process of scaling second-hand fashion and how different strategic paths develop over time. This is theoretically grounded in two distinct scaling logics synthesised from the literature: a process that includes strategies for organisational growth (breadth-scaling) and a process that influences change in formal and informal institutions (depth-scaling).

Design/methodology/approach

The paper presents a process-based study based on the growth of a second-hand fashion retail organisation over 20 years. Qualitative materials such as interviews, observations and documents were collected and analysed.

Findings

The findings illustrate how a circular business model (CBM) can make use of a mix of strategies aiming for both organisational growth and impacting practices and habits within the fashion industry. Strategies building on breadth-scaling logic are found to be a prerequisite for engaging with depth-scaling strategies since they contribute to necessary resources and confidence, while depth-scaling secures future scaling opportunities by changing the conditions for scale.

Originality/value

The study contributes to the relatively scant literature on the process of scaling CBMs by exploring how different strategic paths unfold over time. The process-based approach, in combination with the two scaling logics, gives new insights into how CBMs go from niche to mainstream and thus influence the transition to a circular economy (CE).

The circular economy is an emerging field characterised by complexity and innovation. As such, strategy likely emerges out of practice in a less planned manner. However, this view is largely missing in the growing field of circular business models (CBM) where strategies are assumed to be planned before they are implemented in a rational top-down process. Drawing on an analysis of how a secondhand organisation grew from a single store to become one of few larger commercial secondhand retail organisations, this study aims to illustrate the role of experimentation and emergent strategy-making. The findings, presented as two narratives, show that an experimental approach where strategy emerges from action has played a vital role in the organisation’s development. This suggests the need to widen the scope when discussing strategy-making for CBM growth and look beyond tools and metrics used for planning.