Innovative new business models for the clothing sector can combine sustainability with a swift return on investment, according to WRAP (Waste & Resources Action Programme), a UK government-backed specialist in charge of reducing waste.

A new report from the organisation on “Evaluating the financial viability and resource implications for new business models in the clothing sector”, considers the commercial feasibility of alternatives to traditional “make-buy-use-dispose” business models.

It reviews five potential business models, highlighting the most effective as one where retailers sell their own brand, pre-owned garments back to consumers.

The model, says WRAP, combines relatively low set-up costs with the quickest payback period – meeting capital invested in less than two and a half years, and providing a good return on capital over five and 10 years.

“To stay ahead in today’s competitive markets, companies need to consider the way they do business,” said Dr Liz Goodwin, WRAP CEO.

“The traditional model of buy-use-dispose can be improved when you consider the significant commercial value that can be realised from used clothes.

“Businesses require sound commercial payback; this report shows how reducing the environmental impact can do exactly that and make the system more sustainable.”

WRAP points out that more than 1.1m tonnes of clothes are disposed of in the UK each year, with about one-third of this ending up in landfill.

According to a previous report by the organisation, UK households are storing clothes worth an estimated GBP30bn (US$47bn) in their wardrobes.