The rapid increase in clothing consumption over the last decades has meant a significant burden on the environment. Some examples of this are the high consumption of natural resources and land, increasing amounts of carbon emissions, excessive use of toxic chemicals, polluting air, land and water and increasing amounts of waste. The average clothing consumption in Europe is far higher than the world average, especially in Nordic countries including Sweden. Adopting and encouraging more circular economies is a part of the European commission‘s strategy to achieve sustainable consumption of resources and protection for environment. The purpose of this Research is to study the possibilities of improving the practice of second hand clothes consumption in Sweden and make it more effective towards the goal of sustainable consumption and circular economies. In order to achieve this goal, it is necessary to understand the challenges and find abilities for improvement in the value chain of used clothes in Sweden, with focus on the reverse logistics system of used clothes (collection and sorting processes) as well as the market of second hand clothes. In order to achieve the purpose of the study, the conceptual framework has been formulated upon studying relevant literature and results of previous studies. Value chains of three charity organizations have been studied and empirical data have been collected through semi-structured interviews with participants from these three organizations. The empirical findings have been interpreted in relation to the conceptual framework and the results of previous studies, in order to answer the research questions. The results of the study showed potential for improvement and development in the reverse logistics system (collections and sorting processes) of used clothes, as well as in the Swedish market of second hand clothes. However, benefiting of this potential requires collaboration between all stakeholders in the value chain of used clothes, including individuals (either in a position of donors or consumers), interested businesses (nonprofit or commercial organizations), government, municipalities, politicians and finally the private sector in clothing industry.