The textile and fashion industry produce a significant amount of solid waste annually. Most of this waste is either disposed of or burned; very little is reused. This research investigates the potential of reusing and recycling remnant fabric to create sustainable luxury fashion products in a circular economy. Focusing on three factories namely Factory A, Factory B, and Factory C, this study analyzes product diversification, capacity, capital investment, supply chain dynamics, and manufacturing operations. A qualitative approach with semi-structured interviews with industry practitioners from the case factories was employed. Data from purchasing orders, production reports, inventory reports, and monthly invoices were analyzed. The factories manufactured a range of sustainable products, emphasizing floor mats, ladies’ handbags, and bedding items (pillow covers). The analysis revealed that each factory achieved a 30–40% profit margin on their monthly sales. Notably, approximately 95% of the remnant fabric was recycled in the production process, with merely 5% being discarded and resold for further use. These findings indicate local employment opportunities and substantial contributions to socio-economic advancement. This study recommends adopting a circular economy model to generate new business opportunities and income streams from remnant fabric. It encourages new financial investment and technical innovations to promote growth in this sector and benefit wider stakeholders.

Hybrid jute–banana fiber‐reinforced recycled high‐density polyethylene (rHDPE) composites present a sustainable alternative for achieving improved mechanical performance and ecological durability. This study addresses the challenge of simultaneously optimizing flexural and impact properties along with structural integrity by employing a novel (0°/90°/0°/90°) stacking configuration using both plasma‐treated and untreated fiber preforms. Composites were fabricated through compression molding, placing rHDPE sheets strategically within a four‐layer fiber stack and applying 5‐ton pressure at 160°C for 15 min, followed by a 24‐h curing period. Plasma treatment drastically influenced the adhesion of fiber and matrix, leading to an increased impact strength and altered behavior of water absorption. The greatest impact strength of 31.86 kJ/m ² —a 45.4% improvement over its untreated counterpart—was found in the plasma‐treated hybrid composite (plasma jute–banana composite [PJBC]) with a 7.6% flexural strain, signifying improved energy dissipation and ductility. However, flexural strength in hybrid composites decreased marginally (from 21.3 to 20.3 MPa) due to increased surface brittleness. Plasma treatment improved water absorption in jute composites (0.13%) via increased porosity, but hybridization minimized the effect to yield balanced moisture absorption and mechanical properties. The synergistic combination of jute stiffness and banana flexibility in hybrid form, with plasma‐induced surface activation, resulted in composites with optimal structural integrity and sustainability. These findings demonstrate the viability of plasma‐treated hybrid rHDPE composites for resource‐efficient application in packaging, automotive, and construction sectors, in line with the goal of the circular economy.