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Summary Report for Fashion World 2025 (The State of Fashion Report)

Updated: Jul 24

Summary Report for Fashion World 2025 (The State of Fashion Report)

The State of Fashion Report (2025) is always one of the main sources of the fashion industry (BoF 2025). They always start with the macroeconomic indicators for the fashion industry.

Like every year, new challenges and risks await the fashion industry. According to the BOF Fashion Report, there will be a slowdown in the future in general as expected. If we would like to summarize the reason for that,

  • High inflation triggered the customer's price sensitivity

  •  Trade wars and introducing mutual tariffs between the US, China, and the EU

  • The Accelerated Climate Crisis and unfortunate natural disasters all over the world

  • The effect of these crises the tremendously changed the supply chain systems.

  • The surprise rise of the dupes (also some scandals like sweatshop accusations for subcontractors in Milan for Dior and Armani helped this case) (Kent, 2024).

As a result of all these developments, regional differences and a negative environment will make 2025 another difficult year for the customers. There will also be a change in consumer behavior for Fashion consumers, like demanding different go-to-market models, different price ranges, etc., off-price brands like Action or Woolworths in Europe. The challenges for the brands will be again agile adaptation and maybe a chance for many different brands in the fashion world (The State of Fashion, 2025, p. 7).

In general, for the fashion industry, a flat growth will be expected with a single digit. But this time, in contrast to previous years, not the luxury sector but the non-luxury sector will lead the growth of the fashion economy since 2010, except for COVID-19.

Other problems which will be important for the leaders will be the decreasing consumer confidence and decreasing appetite for spending money, geopolitical instability and tension between the markets. Some of the positive developments are the decreasing inflation rate in many markets except in the US. But still the supply chain will be a huge concern of the fashion leaders (State of Fashion, 2025, p. 9).

Big Fashion Markets Europe, US, China

There are still some regional differences in terms of fashion demand. The State of Fashion report always analyzes the fashion economy in three regions: like US-EU-China.

Here in following as a summary from the State of Fashion Report: these three big markets look slightly different from each other (The State of Fashion, 2025, pp. 10-11).

For Europe, there will be some positive news, like falling inflation and increased tourism, also for the US, the high net worth individuals will support the fashion economy. For Asia, new Hubs and centers will show bigger growth than China, while the Chinese consumer is still recovering from the COVID-19 crisis. Also, other macroeconomic problems will force companies to focus on additional Asian markets other than China, like India, Japan, and Korea (BOF 2025, p.6).


Advice for the Fashion Executives:

BOF report suggests the following steps for the fashion executives to stay on the edge (The State of Fashion, 2025, pp. 6-7):

1)      Localizing the market entry strategies

2)      Broadening the price range in your product portfolio

3)      Focus on the brand positioning to attract consumer attention

4)      Prioritizing the value

5)      Paying attention to the expansion of resale (Case Selfridges-Reselfridges) and off-price segments.

6)      The opposite of the off-price segments will be staying in the premium price segment, while explaining their high price strategy with reasons in their marketing strategy.

7)      Especially for the high price segment, improving the shopping experience will be the key

8)      Followed by well-trained sales assistants in the store.

9) An increase in physical store sales will challenge many online marketplaces, resulting in falling demand and increased customer acquisition costs.

10)  For online marketplaces, helping customers with AI-aided programs for product discovery according to their needs will be helpful.  With that help customers will purchase more easily.

11)  Brands will discover new, previously overlooked customer segments in the future, like ``Silver Generation`` Customers over 50 is a growing proportion of the overall population and fashion spending (BOF, December 2024).

12)  For many established brands, it will be difficult to adapt to these changes, and therefore, newer and challenger brands will stay at the top. This will be especially the case for the sportswear industry, where many innovative new brands will capture the market with their innovative ideas

13)  In terms of supply chain management and with the new regulation in tariffs, many retailers will reconfigure and change their supply chain methods to prioritize closer production countries (nearshoring) and will prefer new manufacturers from geopolitically aligned countries like Uniqlo (Uniqlo 2025, Roll, 2021).  

14)  Agile supply chains mean reduced inventory, to respond to changing demand in a shorter time, and respond to margin pressures.

15)  Another problem will be the restrictions imposed by the governments to reduce emissions and reduce fashion waste.  These will lead to new technologies in terms of inventory management and new technologies like refibre. Already, like PUMA, many brands have started to implement this strategy into their branding strategies.


PUMAxVIVID VISION
PUMAxVIVID VISION

 PUMA x VIVID VISIONS. An experimental one-off collection designed by Andrew Burgess was made entirely from PUMA's RE: FIBRE fabric. (Puma-Refibre)


16)  The other issue is the climate crisis, which will continue to influence the supply chain management and consumer behavior. Although customers will less willingly pay the difference for environmental products, they still expect their brands to deal with that problem. Also, the government restrictions will force the companies to take these strategies in their marketing plan. According to the expert, these companies will be awarded with long-term brand advantage like Patagonia and more efficient business operations like reducing gas, having a more efficient delivery system, with saving money like Wal-Mart's case with rerouting (Hardcastle, 2017).

17)  Also using advanced technology and implementing the AI, Digital Product Passports and finding unique tech solutions for the companies will be more crucial to control the stocks and also follow up the whole supply chain for traceability for sustainable management and working with IT companies like Lectra closer in the Future (Lectra May 2025).

As a short summary, the leaders will find an area in terms of technology, geographical area, or demography where they could renew themselves to stay on the edge. (BoF 2025, p. 7).

In detail, different geographical areas like Europe, Asia, and the USA, the State of Fashion Report summarizes the detailed information. I also added additional detailed information like development of GDP Growth in these markets, interest rates, disposable personal income, etc., in my following blog post ``Macroeconomic figures for the Fashion Industry``.


References:

BOF, 20 December 2024., `` Fashion Wakes Up to the ‘Silver Generation’ Opportunity`` retrieved January 2025 from https://www.businessoffashion.com/articles/retail/the-state-of-fashion-2025-report-silver-generation-consumer-cohort-older-shopper/.

Hardcastle J. 2017: ``Walmart’s ‘Very Strong Business Case’ for Cutting Emissions`` retrieved February 2025 from <``https://www.environmentenergyleader.com/stories/walmarts-very-strong-business-case-for-cutting-emissions,14768>.

Lectra, May 2025, 1: ``A call to action for the Fashion industry `` retrieved May 2025 from <https://www.lectra.com/en/library/why-the-future-of-fashion-depends-on-finding-better-ways-to-create-make-market-and-more#read-the-white-paper>.

Lectra, May 2025, 2:  ``A one-stop digital traceability platform for the fashion supply chain``, retrieved May 2025 from <https://www.lectra.com/en/library/a-one-stop-digital-traceability-platform-for-the-fashion-supply-chain#download-the-document>.

Lectra: 16 May 2025 ``Roversi Simone optimizes panel management with Valia Fashion

Reselfridges: retrieved, 15 May 2025, retrieved April 2025 from <https://www.selfridges.com/GB/en/cat/reselfridges/>

Roll, M., Jary 2025. ``Uniqlo: The Strategy Behind The Global Japanese Fast Fashion Retail Brand``, retrieved 15 May 2025 from < https://martinroll.com/resources/articles/strategy/uniqlo-the-strategy-behind-the-global-japanese-fast-fashion-retail-brand/>

The State of Fashion: Business of Fashion (BoF and McKinsey): retrieved January 2025 from <https://www.businessoffashion.com/reports/news-analysis/the-state-of-fashion-2025-bof-mckinsey-report/, or



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