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This Ethical Clothing Startup Is Leading The Fashion Industry Into The Circular Economy

Fast fashion is killing the planet, but circular economy startups like Buena Onda could be the solution. We speak to the MBA grad behind the company to find out how


Fri Nov 8 2019

When EU Business School MBA Farah Ragheb launched Buena Onda in 2016, she knew that she was heading into uncharted territory. The sustainable fashion brand runs on a circular economy business model, only producing three items per season, a practice which places it far outside the fast fashion norm.

However, she also knew it was a necessary risk. The fashion industry was responsible for almost 5% of all greenhouse gas emissions in 2015—more than the aviation and shipping industries combined—and experts have said the industry must drastically alter its practices in order to reverse this trend.

If you ask Farah, it’s not just an alteration that’s needed—it’s total system change.

“The fast fashion calendar doesn’t make sense”

The idea for Buena Onda came to Farah after 13 years in the retail industry, witnessing massive brands like Topshop pursue an ever-accelerating schedule of production.

“You see them chase that fast calendar, and it just doesn’t make sense,” she says.

“I just decided to go to a blank sheet of paper and describe what an ideal business model would look like if it were my brand.”

But building a business model from scratch is no mean feat; Farah’s MBA background was one of the most useful things she had in her arsenal when she put pen to paper.

“Take a case study and build a universe around it”

Farah had chosen EU Business School’s Barcelona campus for a number of reasons—primarily Barcelona’s reputation as a vibrant international city with a thriving startup scene, and EU’s competitive offering when it comes to specializations.

“Most MBAs are focused on international business or finance, whereas EU’s portfolio of MBA specializations was quite wide—that was exactly what I was looking for,” Farah recalls.

The marketing expertise she gained on the MBA has been invaluable in building a sustainable clothing brand, but it was EU’s case study method of teaching that really made an impact on Farah’s approach to business.

“That was definitely what was interesting about the academic style at EU,” she says. “Rather than just reading about various cases, we were actually given case studies to develop international marketing strategies for, to be more hands-on.”

“[It taught us] to take a case study and build a universe around it.”

A circular economy business model

The universe that started on that blank sheet of paper is founded on what Farah calls a ‘simplified retail model’.

 “We only release three items every summer,” she explains. “It’s a circular model—we give back to the creators behind the brand so that they can create items that they’re inspired by.”

This process draws Japanese design ethics together with Scandinavian simplicity and the idyllic image of a Californian summer. It strikes an optimistic note in tune with the brand’s name—taken from Spanish phrase meaning ‘to be on a good wave’—and in contrast with the often-ominous tone of climate change discussion.

This optimism is hard-wired into Farah’s long-term goals for the business, and stretches way beyond Buena Onda’s status as an ethical clothing brand.

Sustainable clothing for a social good

As she started building her business plan—working on it with the case study methods she’d learned on her MBA—Farah came upon a problem.

“I found myself getting stuck looking into the future, because [in a circular business model,] cash wasn’t going to be a winning solution,” she recalls.

The solution she found strayed away from the growth-driven model usually favored by fashion brands.

“The biggest part of our business model, and our biggest driver, is that we give 10% of all profits to empower youth to support causes that they’re passionate about,” Farah says proudly.

It’s simple: children sign up to share a cause that they’re passionate about, and Buena Onda donates money to that cause in the child’s name and tells them what change their money is making.

“We want to cultivate a charitable mindset as [these children] grow older, and we hope to one day increase [the amount we donate] to 60% of our profits,” enthuses Farah.

Advice to other entrepreneurs

There’s no question that Buena Onda pushes the boundaries of what we expect from sustainable brands in 2019, and Farah picked up a lot of helpful tools during her time on her MBA.

To other aspiring ethical clothing entrepreneurs, her advice is to think outside of the box.

 “I would say, do it your way and do it differently!” she counsels. “It doesn’t have to adhere to what we see already because what we see isn’t working.

“There are a lot of business woes right now—we’re hungry for somebody to refresh us.”