During an interview in late March, Stuart Vevers, the creative director of Coach, stood by slivers of mustard-colored leather spread across a table at the Coach headquarters in New York City. They were byproducts from the production line for the company’s luxury handbags.

“Waste scraps like this would normally end up on a factory floor before being burned or in a landfill in huge volumes,” Mr. Vevers said via video. “That’s just the way it has always been.”

But as the fashion industry comes under increasing scrutiny for its wasteful practices, a team at Coach has spent the last two years trying to figure out how to embrace more circular business models, a concept that emphasizes minimizing the use of resources and making products easier to recycle and reuse.

This week, the company introduced Coachtopia, a line that offers nearly 100 products including bags, accessories, ready-to-wear fashion and footwear made primarily with waste leather sourced from India and Vietnam or partly recycled materials like cotton, resin or polyester. Prices range from $75 for a T-shirt to $495 for the most expensive handbag.

With motifs like fluffy clouds and flowers, the 1970s-infused aesthetic of Coachtopia is designed to fill people with hope, rather than anxiety about the future. Cornerstones are the Ergo and Wavy Dinky, shoulder bags available in a wide variety of colors and artisanal designs, including a checkerboard pattern, with each square made from dozens of woven leather scraps like those that had been spread out in the workshop.

“The idea behind Coachtopia is to not just create new and beautiful craft from waste but also to close the loop by designing out waste in the first place,” Mr. Vevers said. The challenge is to find a circular system that actually works, he added.

Initially, this will mean using waste or recycled materials from Coach factories. Eventually, materials would also come from older Coachtopia products, which customers will be able to return to Coach for credit and are being designed to be repurposed more easily.

Much of the groundwork for Coachtopia, comes from (Re)Loved, a program the company started in 2021 that sells remade handbags and allows customers to trade in older designs.

Capsule collections or “sustainable” lines are common in fashion, and many critics see them as marketing opportunities with minimal impact. Coach itself has been scrutinized for its sustainability strategies after a viral TikTok video in 2021 alleged it was destroying unsold handbags, a widespread industry practice. In response, Coach said it would cease the destruction of “in-store returns of damaged and unsalable goods.”

Joon Silverstein, the head of Coachtopia, said she hoped the process of figuring out the logistics of producing a line that hews to such circular standards, and making it profitable, could be used as a blueprint for how to improve the overall environmental footprint of Coach, which made net sales of $4.9 billion in 2022.

The intended consumer for Coachtopia is Generation Z, who will represent 40 percent of the luxury goods market by 2035, according to a 2022 report from Bain, a consulting firm. A community of young collaborators was invited to consult on designs and marketing campaigns for current and future collections. Coachtopia prices are deliberately lower than those of Coach and other luxury rivals in order to make products more accessible to younger shoppers.

Francois Souchet, the global head of sustainability and impact consulting at BPCM, a consulting firm, said that sustainability credentials could not compensate for design or brand appeal.

“The selling point is the product, and then how it’s made is the cherry on top,” Mr. Souchet said. “A product can only really be successful if people want it. What we see currently is that circular craft might make a customer more excited about a product but it is unlikely to drive the purchase itself.”

Jules Lennon, fashion lead at the Ellen MacArthur Foundation, a charity that focuses on the circular economy, said Coachtopia was a great starting point. She called it a “major step forwards on Coach’s pathway” to better business practices.

“We need to completely reshape traditional organizational silos in the fashion industry so that companies can generate revenue without making new clothes,” she said. Tapestry, which owns Coach, is part of the foundation’s network of partners, companies that pay a fee to the foundation and receive guidance from it.

Still, Ms. Lennon added that some companies are taking even bigger and more ambitious steps. Timberland, for example, has set a goal for all products to be designed for circularity and all its natural materials to be sourced by regenerative agriculture by 2030.

“Circular initiatives should not be seen as a bolt-on to traditional linear models of growth,” Ms. Lennon said. “And that’s something we need to be watching closely for.”

Mr. Vevers, who has been exploring and emphasizing sustainability more deeply on the Coach runway in recent seasons, said the process has been an important learning experience. He noted that it was “impossible for anyone working in this business to ignore how broken a linear system of producing, distributing and using most clothing is.”

“But there is also a fear that if you’re not perfect then you will be publicly held up for it,” he said. “There were times during this process where I thought ‘this could be impossible’ but then you have a breakthrough, and keep going.”

Responsible Fashion examines innovative efforts to address issues facing the fashion industry.