H&M, Primark and Decathlon join calls for policy changes around resale and repair

The retailers claim the current system makes producing new clothes more profitable than repairing or reselling existing ones.

In a statement, the organisations have called for reduced VAT in the EU and eliminated sales tax in North America on resold products and repair services.

It asks EU governments to lower labour taxes and for North America to issue tax credits for businesses creating jobs in resale and repair.

Nearly 70 companies have also asked for extended producer responsibility (EPR) to fund the infrastructure needed to collect and sort clothing at scale.

Other signatories include Arc’teryx, Lacoste, Reformation, Vestiaire Collective, Vinted, and Zalando.

The call from businesses is backed by a new report from the Ellen MacArthur Foundation, which found that the targeted changes could raise gross profit margins to up to 55% for resale and 41% for repair.

H&M Group chief sustainability officer Leyla Ertur said: “Resale keeps products in use while meeting customer demand for more affordable and sustainable choices. But today, this business model is still economically penalised. 

“If governments are serious about circularity, they need to act by removing double taxation, reducing labour costs, and removing other barriers that hold resale back. 

“Fixing the economics of resale is one of the fastest and most concrete ways to scale circularity in fashion.”

Vinted sustainability senior director Marianne Gybels added: “To unlock its full potential, policy should support business models that make circular choices more accessible. 

“This helps secondhand to scale further and provides consumers with high-quality, affordable alternatives that are significantly better for climate impact than buying new.”