Circular economy in the textile industry as a factor of financial sustainability and competitiveness

Abstract

The modern textile industry faces significant environmental challenges due to high levels of waste, intensive resource consumption, and the short life cycle of products characteristic of the fast fashion model. In response to these limitations, the concept of the circular economy is gaining increasing importance, as it implies a transition from the linear model of production and consumption to a model based on reuse, recycling, and extending the life cycle of products. The aim of this paper is to analyze the role of the circular economy in improving the financial sustainability and competitiveness of textile companies. Special focus is placed on changes in the cost structure, opportunities for cost savings, development of new revenue sources, and the impact on business profitability. Research results indicate that the application of circular models may lead to increased costs in the short term, while long-term effects are reflected in improved efficiency, more rational use of resources, and a stronger market position of companies. It is concluded that the circular economy represents an important direction for the development of the textile industry and a key mechanism of its transition toward sustainable business.