Back to New(s): An in-house Circular Hub dedicated to repair, regeneration, co-design and second-life products

Company and project background

Can you give us a brief overview of your business and the specific project you implemented?

EMBAWO is an Italian artisanal brand producing high-quality handbags and small leather goods, combining traditional craftsmanship with innovative design. Our core products are handcrafted bags made with carefully selected materials, designed to last over time.

With the Up2Circ project, we explored the transition from a predominantly linear production model to a structured circular business model. The project focused on the feasibility of creating an in-house Circular Hub: a multifunctional space dedicated to repair, regeneration, co-design and second-life products.

While repair services already existed, they were used by less than 10% of customers. The project represents a shift from occasional services to an integrated system embedded in our operations.

This aligns strongly with our mission: to create objects that last, evolve with their owners, and reduce the need for continuous new production.

What motivated you to make your business more circular?

The motivation came from both internal and external drivers.

Internally, we were already aware of the environmental impact of leather goods production, which requires significant raw materials, water and generates CO₂ emissions. We wanted to reduce this impact while staying true to our artisanal identity.

Externally, we observed growing interest in sustainable fashion, especially among younger and eco-conscious consumers and a clear market opportunity for more participatory and circular premium models.

A key insight was that customers are increasingly interested not only in sustainability, but also in emotional connection, uniqueness and co-creation. This represented a strong opportunity to rethink our business model.

Implementation process

What were the main objectives of your feasibility study?

The main objective was to evaluate the feasibility ( technical, economic and environmental) of implementing a Circular Hub within our company.

Key goals included:

• Reducing reliance on virgin materials (target: -20% within 3 years)
• Minimising waste (target: up to -80% landfill waste)
• Lowering CO₂ emissions through product regeneration (approx. 14.5 kg CO₂ saved per bag)
• Increasing customer engagement through co-design and circular services
• Creating new revenue streams based on regenerated and co-designed products

The study also defined clear KPIs related to material efficiency, energy use, waste reduction and customer participation.

What activities did you carry out during your project?

The project followed a structured approach:

• Market analysis to identify target groups and validate demand for circular services
• Customer survey (“Give Your Bag a Second Life”) to understand expectations, willingness to pay and perception of regenerated products
• Technical feasibility assessment to define required tools, workflows and integration with existing craftsmanship
• Economic analysis including CAPEX, OPEX and ROI projections
• Environmental and social impact assessment to quantify benefits

We involved internal staff (artisans and management) and external expertise where needed, especially for economic and environmental evaluation.

What feedback did you receive from stakeholders (customers, suppliers etc.)?

Feedback was very encouraging.
Customers showed a strong openness to circular solutions, especially when combined with creativity and storytelling. The survey confirmed that regenerated products are not perceived as “second-hand”, but rather as unique and responsible premium items.
We also observed differences in communication preferences:

• German-speaking audiences respond more to values and authenticity
• Italian audiences respond more to design and emotional storytelling

This feedback is already influencing how we design and communicate our circular services.

Impact & Outcomes

What were the main results and outcomes of the project for your company?

The main outcome is a validated and structured circular business model.

The study addressed key gaps:

• Lack of structured repair and regeneration processes
• Limited customer engagement beyond purchase
• High dependence on virgin materials

We now have a clear roadmap for implementing the Circular Hub, including operational workflows, cost structure and expected benefits.

Did you detect a positive impact of circular transition for your company and for the environment?

Yes, although we are still in the early implementation phase, the projected impacts are expected to arrive in the next periods:

• Up to 20% reduction in virgin materials
• Up to 80% reduction in waste
• CO₂ savings of 1.3–2.0 tons per year in the pilot phase
• Improved energy efficiency (approx. +10%)

Beyond environmental benefits, the model strengthens brand positioning and customer loyalty.

Have you already implemented any changes?

Yes, but implementation is still at an early stage.

We have started:

• Structuring circular workflows internally
• Testing regeneration and co-design processes
• Integrating customer feedback into service design

Some elements are already part of our operations, while others, such as the full Circular Hub, will be implemented progressively and scaled over time.

Lessons learned

What key lessons did you learn regarding circular innovation?

One key lesson is that circular innovation is not only technical: it is deeply cultural and relational.

Customer involvement is crucial. Co-design and storytelling are not just “add-ons”, but central elements of the value proposition.

Our advice:

• Start from your identity and strengths
• Involve customers early
• Think of circularity as an experience, not just a process

Did you encounter any challenges?

Yes and they were alredy taken into account:

• Financial challenges, especially initial investment (CAPEX ~43,000 €)
• Operational complexity, integrating new workflows with artisanal processes
• Market perception risks, as some customers may still associate regeneration with lower value

These challenges are ongoing, but we are addressing them through gradual implementation.

If you could do your project again, what would you do differently?

We would start earlier with:

• Customer testing and pilot services
• Communication strategies to shape perception
• Partnerships with external stakeholders

We would also simplify some analytical phases and move faster into operations, but this is only a theoretical wish as we need funds to invest for transiction.

Future plans & recommendations

What are your next steps towards circular transition?

Our next steps include:

• Physical implementation of the Circular Hub
• Expansion of regeneration and co-design services
• Development of partnerships with other SMEs
• Scaling the model to reach new markets (Italy and DACH region)

Is there any advice you would give to other SMEs looking to adopt a circular business model?

• Start small but start concretely.
• A good first step is to analyse your material flows and identify where value is lost.
• Avoid treating circularity only as marketing and overcomplicating the model from the beginning.
• Focus instead on real processes and customer value.

How can policymakers or financial institutions better support businesses in adopting circular practices?

Support is crucial, especially in early stages.

What would help most:

• Easier access to grants and funding for small-scale pilot projects
• Training programs on circular design and digital tools
• Tax incentives for investments in circular infrastructure
• Simplification of regulatory procedures

There is still a gap between policy ambition and practical accessibility for SMEs.

Do you have any additional comments or reflections about your participation in the Up2Circ project?

Participating in the Up2Circ project has been a valuable opportunity to structure and validate a transformation that was already part of our vision.