The textile industry is recognized as being one of the most polluting industries. Thus, the European Union aims to transform the textile industry with its “European Green Deal” and “Circular Economy Action Plan”. Awareness regarding the environmental impact of textiles is increasing and initiatives are appearing to make more sustainable products with a strong wish to move towards a circular economy. One of these initiatives is wear2wearTM, a collaboration consisting of multiple companies aiming to close the loop for polyester textiles. However, designing a circular product system does not lead automatically to lower environmental impacts. Therefore, a Life Cycle Assessment study has been conducted in order to compare the environmental impacts of a circular with a linear workwear jacket. The results show that a thoughtful “circular economy system” design approach can result in significantly lower environmental impacts than linear product systems. The study illustrates at the same time the necessity for Life Cycle Assessment practitioners to go beyond a simple comparison of one product to another when it comes to circular economy. Such products require a wider system analysis approach that takes into account multiple loops, having interconnected energy and material flows through reuse, remanufacture, and various recycling practices.