Dec 08 2024 4 mins 1
The current state of the fashion industry is marked by uncertainty and challenges, with leaders anticipating further headwinds in 2024. According to the BoF-McKinsey State of Fashion 2024 Executive Survey, the word most often mentioned by executives was "uncertainty," reflecting concerns about consumer confidence, economic conditions, and the climate crisis[1].
In terms of market movements, the fashion industry is predicted to achieve year-on-year retail sales growth of between 2 percent and 4 percent in 2024, a slower pace than in previous years[1]. This is partly due to deteriorating macroeconomic and geopolitical conditions, which have weighed heavily on the industry since the second half of 2022[3].
One of the key challenges facing the industry is the climate crisis, with extreme weather events in 2023 highlighting the need for resilience and sustainability in supply chains[1]. In response, companies are bolstering their contingency planning and investing in sustainable materials and practices. For example, collaborations with textile manufacturers and tech providers are becoming increasingly important for successful sample development, enabling brands to access the latest developments in fabric technology and reduce their environmental impact[2].
Another trend shaping the industry is the rise of vertical integration, with garment manufacturers expanding into textile production, knitting, and dyeing to meet increasingly crunched buyer timelines[4]. This shift demands substantial capital investment and a reevaluation of traditional business models but offers benefits such as enhanced efficiency, superior quality control, and heightened competitiveness.
In terms of partnerships, sports-fashion collaborations are becoming increasingly popular, with brands like Balenciaga and Off-White teaming up with sports teams to create unique crossovers that resonate with both fans and fashion-forward consumers[5].
Compared to the previous reporting period, the industry's outlook has become more cautious, with 84 percent of industry leaders expecting market conditions to decline or stay the same in 2023, compared to 91 percent who predicted improvement or stability in 2022[3]. The effects of inflation are also weighing heavily on executives, with prices in Europe and the US reaching historic highs and central banks raising interest rates.
Overall, the fashion industry is navigating a challenging era, with leaders responding to current challenges by investing in sustainability, adopting new technologies, and reevaluating traditional business models. As the industry continues to evolve, agility and tech-savviness will be crucial for survival.
In terms of market movements, the fashion industry is predicted to achieve year-on-year retail sales growth of between 2 percent and 4 percent in 2024, a slower pace than in previous years[1]. This is partly due to deteriorating macroeconomic and geopolitical conditions, which have weighed heavily on the industry since the second half of 2022[3].
One of the key challenges facing the industry is the climate crisis, with extreme weather events in 2023 highlighting the need for resilience and sustainability in supply chains[1]. In response, companies are bolstering their contingency planning and investing in sustainable materials and practices. For example, collaborations with textile manufacturers and tech providers are becoming increasingly important for successful sample development, enabling brands to access the latest developments in fabric technology and reduce their environmental impact[2].
Another trend shaping the industry is the rise of vertical integration, with garment manufacturers expanding into textile production, knitting, and dyeing to meet increasingly crunched buyer timelines[4]. This shift demands substantial capital investment and a reevaluation of traditional business models but offers benefits such as enhanced efficiency, superior quality control, and heightened competitiveness.
In terms of partnerships, sports-fashion collaborations are becoming increasingly popular, with brands like Balenciaga and Off-White teaming up with sports teams to create unique crossovers that resonate with both fans and fashion-forward consumers[5].
Compared to the previous reporting period, the industry's outlook has become more cautious, with 84 percent of industry leaders expecting market conditions to decline or stay the same in 2023, compared to 91 percent who predicted improvement or stability in 2022[3]. The effects of inflation are also weighing heavily on executives, with prices in Europe and the US reaching historic highs and central banks raising interest rates.
Overall, the fashion industry is navigating a challenging era, with leaders responding to current challenges by investing in sustainability, adopting new technologies, and reevaluating traditional business models. As the industry continues to evolve, agility and tech-savviness will be crucial for survival.
