The economics of London’s circular fashion economy

While London is widely acknowledged as a global tourism and fashion retail destination, little attention is paid to its role in vintage fashion and the wider circular economy, at a time when this subsector is growing more important from a social, cultural and economic lens.

The United Kingdom in general, and London in particular, have always stood out as regional and global hubs of the fashion industry. The British Fashion Council notes that the industry contributes approximately £67.5 billion in output to the UK economy while supporting jobs, goods exports and soft power advantages^[1]. London lies at the heart of this offering- think London Fashion Week, which congregates designers, businesses, artists and pertinent stakeholders from across the globe to showcase innovative talent and weave an economic reality that fuses fashion, culture and technology.

This supplement provides a brief overview of one aspect of the fashion industry, the circular fashion economy, that has been rapidly growing over the past few years both in London as well as more widely.

Fashion in London

Data from the Office for National Statistics (ONS) show, in 2022, there were more than 108,000 individuals directly employed in the fashion industry in London. Employment in the sector averaged approximately 114,000 since 2019, employed across about 10,000 enterprises on average. It directly contributed nearly £11 billion to the capital’s total annual income (or approximately 2% of its annual gross value added (GVA)) in 2021. It supports nearly 1 in every 23 workforce jobs across the capital, while the average Londoner spent nearly £1,000 annually on apparel in 2025^[2].

It is remarkable that in spite of having an economy that’s predominantly services-oriented and where neither light nor heavy manufacturing protrude, London continues to represent a strategic hub for economic activity in the UK’s fashion industry. It remains an integral part of the industry’s wider supply chain, especially in the elements that relate to sales, retail and services exports.

London’s eminence truly shines, however, when looking specifically at its role in the circular fashion economy, and here it is worth presenting an overview of this sector’s emergence both globally and nationally.

Circular fashion: the global context

The circular fashion economy has gradually cemented its position as the fastest growing subsector within the wider fashion industry. At present, 10% of the global apparel market is likely to be comprised of second-hand apparel^[3], and the sector has been growing approximately three times faster than the overall global apparel market^[4]. According to ThredUp, an online consignment and thrift store that sells used clothing, shoes, and accessories for women and kids, the market for second-hand clothing has seen accelerated growth in 2023, growing at 26%. More impressively, it projects that the global second-hand market will nearly double by 2027 to reach $350 billion in size (or approximately £260 billion). To put this figure in perspective, only five years ago (in 2021), the figure was $138 billion (or nearly £102 billion)^[5]. In the United States, for example, second-hand clothing is expected to capture 18% of total market share by 2032, compared to only 3% in 2012^[6]. Another indicator of the sector’s growth is the rise in the number of retailers with branded resale programmes in 2022, such that the number grew nearly 3.5 times between 2021 (36) and 2022 (124)^[7].

Circular fashion in London and the UK

According to 2026 figures by Bleckmann, a global supply chain and logistics company specializing in fashion and lifestyle brands, the UK is one of the fastest adopters of resale fashion in Europe^[8]. For example, around 25% of all fashion transactions in the UK are now second-hand, and the overall resale sector is valued at more than £7 billion^[9]. The company’s forecasts suggest that the subsector will account for around 10% of total UK fashion spending by 2029, growing at about 9% per year and faster than the UK retail market as a whole.

Meanwhile, data from the ONS on the general apparel sector (so not just circular fashion) indicates that annually, London represents about 10-15% of the UK’s total output in that sector, creates about 28% of its jobs, has 27% of its businesses and generates nearly 37% of its turnover. That being said, the capital’s contribution to the circular fashion economy is likely to be more significant as a share of the national figures, not least due to the dense clustering of circular fashion retailers and activity (e.g., Portobello, Soho and Shoreditch), the higher domestic and international tourism-driven retail scene and the capital having a more mature and established consumer base and resale culture. While there are no official statistical measures for the UK’s circular fashion economy by region, it would be safe to assume that if London captures 10-15% of the national apparel industry, then it would capture at least 20% of the circular fashion economy.

If we take Beckmann’s most recent projection for the size of the UK’s resale clothing sector (£7 billion) as a given, then this would suggest that London’s circular fashion economy could be valued at anywhere between £1.5 billion and £2.5 billion annually at present. It is worth noting, however, that such an estimate would encompass the entire circular fashion retail scene, including physical stores, digital/online sales platforms and peer-to-peer platforms such as Depop and Vinted.

Furthermore, the sector is also an important job creator that directly employs tens of thousands of Londoners while supporting employment in other sectors that complement activity in circular fashion. According to IBISWorld, a global industry market research company that provides deep data, statistics, and analysis on thousands of industries, the UK’s vintage sector employed approximately 128,000 in 2026 (this encompasses the broader circular economy, including sorting, recycling and digital resale)^[10]. Given that London is responsible for approximately a third of direct employment in the sector, this would imply that London employs approximately 40,000 individuals directly in circular fashion. This would not include employees employed in other sectors that are reliant or closely dependent on circular fashion. Therefore, London’s circular fashion sector is likely to support an even larger number of jobs overall in the capital.

The future could be even more circular

While the current economic contributions of the circular fashion economy may seem modest, existing trends suggest that it is likely to play a more important role going forward. This is due to several reasons:

1. Gen Z and Millennial fashion trends: Globally and nationally, Gen Z consumers are leading the momentum towards purchasing second-hand clothing and supporting the circular fashion subsector in general. As an example, in 2023, 65% of Gen Z and Millennial individuals shopped for second-hand apparel^[11]. 50% of that same cohort look at purchasing second-hand first before exploring alternatives. This would suggest that younger cohorts are more likely to embrace circular fashion in general, making this a sector with promising demand potential.

2. Environmental considerations: Buying and wearing second-hand clothing instead of new reduces carbon emissions by an average of 25% according to ThredUp^[12]. At a time when London is leading both nationally and globally in setting ambitious environmental targets (including making the capital a carbon-neutral city by 2030), the circular fashion subsector would play an important part in supporting this broader agenda.

3. Cost-of-living pressures: Cost-of-living pressures continue to affect affordability of necessities (including clothing) across the world. Within the UK, London in particular suffers from acute affordability pressures. Recent polling by the GLA in collaboration with YouGov indicates that almost half of Londoners (47%) are either struggling financially or just about managing^[13]. Buying second-hand would help individuals and households alleviate such pressures; for example, research by Barclays shows that “new clothing and accessories are the most commonly cut discretionary spend, with 55% of cost‑conscious consumers actively avoiding new purchases since 2023”^[14]. This would favour growth in circular fashion as affordability pressures persist.

4. The preponderance of technology: Globalisation, internet connectivity and the boom in peer-to-peer digital platforms further supports growth in circular fashion. 38% of UK consumers bought from a resale platform in 2025, with platforms like Vinted now having nearly 1 in 4 UK individuals as users^[15]. It is also worth bearing in mind that younger generations (who are already more likely to buy second-hand clothing) are also more likely to shop online using digital platforms. Barclays research also notes that “resale adoption is highly age‑skewed, with one in four 16–24‑year‑olds using resale platforms to save money, compared with just 9% of over‑55s”^[16]. This phenomenon facilitates interaction between buyers and sellers of pre-loved clothing items, a trend that is unlikely to slow down in the near future.

The aforementioned factors explain why the circular fashion subsector is growing much faster (economically) than the clothing and apparel sector overall. More importantly, London could capitalise on its competitive advantage in this subsector and harness this growth to stimulate its overall output, boost employment both directly in the sector and indirectly across other industries, and concurrently realise important social, cultural and environmental outcomes. The capital already has a major resale platform ecosystem and a robust ecosystem of independent retailers (many of whom are small and medium-sized employers responsible for employing hundreds of thousands of Londoners), cultivates several fashion clusters (e.g., Portobello, Camden and Brick Lane), enjoys a competitive advantage in sectors that complement circular fashion (e.g., technology, artificial intelligence and the green economy), and has a relatively young demographic that espouses strong cultural values related to environmental sustainability and financial responsibility. These elements favourably position London not only as the national core, but also as an international hub for the circular fashion sector over the short, medium and long run.

^[1] British Fashion Council (2026): https://www.fibre2fashion.com/news/fashion-news/british-fashion-council-2030-to-strengthen-uk-fashion-industry-309412-newsdetails.htm