One reason that executives are not breaking out the bunting is that the outlook for the global economy is less rosythan it was a year ago. 133 These price hikes are in part due to ongoing supply chain disruptions that will impact margins . Venue: Karnavati University, Gandhinagar. These are some of the findings from our latest report, The State of Fashion 2020, written in partnership with The Business of Fashion (BoF). How Digital Product Passport will reshape the fashion industry for good: Lifestyle Innovation Day 2023 The Digital Product Passport is increasingly becoming a hot topic, and several fashion companies are implementing it, with different applications as needed. This year, we return to our analysis but with an adapted approach: smoothing pandemic-induced distortions by calculating the average economic profit over both 2019 and 2020. More and more, they base their purchase decisions on whether a companys practices and mission aligns with their valueswhile at the same time they are highly price sensitive. We also highlight the ten trends that will define the fashion agenda in 2019 (interactive). Only those brands that accurately reflect the Zeitgeist or have the courage to self-disrupt will emerge as winners. By Imran Amed, Anita Balchandani, Achim Berg, Saskia Hedrich, Jakob Ekelf Jensen, and Felix Rlkens. After nearly two years of disruption, the global fashion industry is once again finding its feet. SHANGHAI, March 15, 2023 . The fashion industry posted a 20 percent decline in revenues in 201920, as earnings before interest, taxes, and amortization (EBITA) margins declined by 3.4 percentage points to 6.8 percent. NEW YORK, March 16, 2023 (GLOBE NEWSWIRE) -- CGS, a global . This is consistent with their compound annual growth rate (CAGR) over the past three years, which has been 9 percent for affordable luxury and 6 percent for value, the highest of any segment since 2013. Its against this backdrop that McKinsey has teamed with the Business of Fashion to shine a light on the fragmented, complex ecosystem that underpins this giant global industry. As our ten trends indicate, new markets, new technologies, and shifting consumer needs present opportunitiesbut also risks. While the crisis has visited a devastating impacton businesses and jobs, it may also have accelerated responses that can lead to positive outcomes. This result may be critical for NYS dual meet tournament considerations later in January 2023. Over that period, the top five performers by economic profit were Nike, Inditex, Kering, LVMH (including Tiffany), and Hermes. In August 2019, Kering CEO Franois-Henri Pinault spearheaded an industry-wide pact to achieve net-zero emissions by 2050. Among product categories, it was a breakout year for sportswear, with 42 percent of positive economic profit in the MGFI index coming from sportswear companies, amid strong growth for Chinese players. Additionally, they will need to think critically about where they operate, looking beyond top-line growth potential when evaluating new and existing foreign markets. In Mozambique, at least 10 people were killed and 13 injured in the Zambezia province, according to state broadcaster Radio Mozambique, citing the National Institute of Disaster Risk Management. For more information, please visit www.cgsinc.com and follow us on LinkedIn. Anita Balchandani is a partner in McKinseys London office, where Jakob Ekelf Jensen is an associate partner and Leila Le Merle is a consultant. Fashion companies that can adapt to the increasing complexity by updating their operating models and adjusting their strategies for supply chain, sales channels, and digital marketing will be best placed to weather the upcoming storm. Imran Amed is the founder, editor-in-chief, and CEO of the Business of Fashion. Affordable-luxury players benefited from consumers trading down from luxury, particularly among Chinese consumers. COVID-19 could spur the biggest economic contraction since World War II, hitting every sector from finance to hospitality.7UN chief says coronavirus worst global crisis since World War II, France 24, April 1, 2020, france24.com. On the other, global economic growth is slowing and competition is more intense than ever. In that scenario, we would see markets such as China recovering strongly. Looking forward, our base case is cautiously optimistic, with the virus more effectively controlled over the coming year, thanks to a strong public-health response.2McKinsey analysis. We see brands rethinking store formats and leveraging data and analytics to predict footfall, manage assortments, and built personalized offerings. How will changes to the global economy and consumers behavior affect fashion in the postcoronavirus world? Only the discount segment is likely not to be part of the recovery trend. It is a long and arduous transformation many organisations won't see tangible results from for years to come. New NASCA Report in Collaboration with McKinsey & Company on Bridging Talent Gaps in State Government. Our calculations, based on the changes in market capitalizations over time in our index on global fashion, suggest that the industrys economic profit will fall by 93 percent in 2020 after rising 4 percent in 2019 (Exhibit 1). Given the disruptions of recent months, many companies are reconnecting with their supply chains, making tough decisionsfor example, about ROI at store leveland ramping up omnichannel services. The MGFI forecasts that growth will slow to 3 to 4 percent in 2020, slightly below the predicted rate for 2019. Athletic wear is set to become the absolute category champion, maintaining 6.5 to 7.5 percent sales growth, although it will be unable to reproduce the double-digit growth of the past. The average industry EBITA16To view exhibit, refer to The State of Fashion 2020. margin was 10.8 percent, a tick up on 2017 and the highest since 2014. Bachelor's degree; Advanced graduate degree (e.g., MBA, PhD, etc.) Indeed, recovery is at the top of executives minds for the coming year, with 75 percent of luxury-segment executives, 61 percent of midmarket executives, and 50 percent of value executives expecting better trading conditions. They can lean into the following ten emerging consumer trends: Bereft by global risks and uncertainties, leaders in the fashion industry will need to pay careful attention to macroeconomic and political issues in the regions where they produce and sell their products in the year ahead. State of Fashion 2022 Report by McKinsey & Co & BOF - FASH455 Global Apparel & Textile Trade and Sourcing State of Fashion 2022 Report by McKinsey & Co & BOF In December 2021, McKinsey & Co' and Business of Fashion (BOF) released its annual State of Fashion report. They are also most successful in attracting funding and talent, often leaving the rest to fight over scraps. A "modest" recovery in China is expected in 2023, according to McKinsey, and will be tied heavily to the country's luxury sales. Washing, solvents, and dyes used in manufacturing are responsible for one-fifth of industrial water pollution, and fashion accounts for 20 to 35 percent of microplastic flows into the ocean. McKinsey: The State of Fashion 2023 Event Ended Thu Dec 01, 2022 UrbanCity, 9 Ankerrui, Antwerpen, Belgium View Details Advertisement Women History Month Events in Miami CLANDESTINEMOOD SPORTY PARTY MIAMI Secret Location disclosed 24h before, Coconut Grove, Miami, United States Mar 16 Web3 Equity 1 Year Anniversary: The Journey Edition Of course, for every success, there are also relative failures. Conversely, those that are slower to invest in digital technology will lag behindand could see a 23 percent relative decline. Renewed optimism for the fashion industry, Sporting goods 2021: The next normal for an industry in flux, Revamping fashion sourcing: Speed and flexibility to the fore, Oliver Guyot, Caught between inflation and rising costs, fashion seeks to strike new balance,, State of Fashion 2022: An uneven recovery and new frontiers, The State of Fashion 2021: In search of promise in perilous times, Its time to rewire the fashion system: State of Fashion coronavirus update, The State of Fashion 2020: Navigating uncertainty, The State of Fashion 2019: A year of awakening, The State of Fashion 2018: Renewed optimism for the fashion industry. Yet this sluggish overall growth masks some big winners: affordable luxury, value, and athletic wear. We expect in 2022 that companies will seek fresh approaches to online creativity and commerce, with nonfungible tokens, gaming skins, and virtual fashion edging closer to the mainstream. With information and the ease of comparison at their fingertips, consumers are becoming less brand loyalamong millennials, two-thirds say they are willing to switch brands for a discount of 30 percent or more. Emerging markets remain a crucial source of this growth; indeed, in 2018, for the first time, more than half of apparel and footwear sales will originate outside Europe and North America. Comedy night with Shreeja Chaturvedi. As athletic wear continues to grow, it will become a category with the ability to compete on equal terms with clothing and footwear, particularly in the midmarket and premium segments. Download The State of Fashion 2022, the full report on which this article is based (PDF14MB). Sales of the traditional fast-fashion sector have grown by more than 20 percent over the last three years, and new online fast-fashion players are gaining ground. Successful companies will invest more to nurture local clientele: 2017 will be the year of organic growth by deepening relationships with existing clients, rather than through geographic, channel, and store-network expansion. During the 49 weeks students in the state learned remotely, they only absorbed the equivalent of 19 weeks of schooling marking a 30 week loss of classroom time that was twice the national. Value and affordable luxury will probably be the big winners, both outpacing the industry average at a projected 3.0 to 4.0 percent and 3.5 to 4.5 percent growth, respectively. As decision makers continue to manage uncertainty, the most successful will be those that get a grip on the trendsshaping the fashion landscape. Although they are written off by some as too 20th century, we take a more constructive view. 1 - BoF-McKinsey's State of Fashion 2023 Survey Media Contacts: Escalate PR for CGS cgs@escalatepr.com Mark D. Tullio, CGS newsroom@cgsinc.com Education, Energy, and the Environment Committee . Even online sales have declined 15 to 25 percent in China, 5 to 20 percent across Europe, and 30 to 40 percent in the United States.11McKinsey analysis, based on data from Amazon and Stackline. The State of Fashion 2022 from the Business of Fashion and McKinsey & Company, found some brands were already surpassing their pre-Covid performance, benefitting from a burst of pent-up consumer demand that was expected to continue. The industry is now on red alert. Twelve of the top 20 have been a member of the group for the last decade. The deadly cyclone has broken records for the longest-lasting storm of its kind after making landfall in Mozambique for a second time, more than two . McKinsey: The State of Fashion 2023 Meer informatie Volg deze organisator en blijf op de hoogte van komende evenementen Door Flanders DC Evenementen die je mogelijk leuk vindt Fashion & Beauty Congress Fashion & Beauty Congress Thu, May 11, 10:00 AM Shopping Stadsfeestzaal Antwerpen 556,98 Nidem Dito Fashion show Nidem Dito Fashion show The ones that will succeed will have come to terms with the fact that in the new paradigm taking shape around them, some of the old rules simply dont work. Many of them have already undertaken significant cost cutting and restructuring, and they are now primed to capture the benefits. By geography, the most optimistic about the coming year are executives in North America. Indeed, consumer pessimism about the economyis widespread, with 75 percent of shoppers in Europe and the United States believing that their financial situation will be affected negatively for more than two months.10McKinsey COVID-19 Consumer Pulse Survey: for Europe, held March 2026, 2020, with 5,614 respondents (France, Germany, Italy, Portugal, Spain, and the United Kingdom); for United States, held March 2329, 2020, with 1,119 respondents. Consumers want to know where materials come from, how products are made, and whether the people involved are treated fairly. Member News Rieter posts exceptionally high order intake. The State of Fashion 2023: Resilience in the Face of Uncertainty The seventh annual State of Fashion report by The Business of Fashion and McKinsey & Company reveals the industry is heading for a global slowdown in 2023 as macroeconomic tensions and slumping consumer confidence chip away at 2022s gains. Hyper-interactive digital environments and investment in e-commerce are increasingly the leitmotifs of brands that are pushing on fashion frontiers. By Imran Amed, Johanna Andersson, Achim Berg, Martine Drageset, Saskia Hedrich, and Sara Kappelmark. Imran Amed, the founder, editor-in-chief, and CEO of the Business of Fashion, is an alumnus of McKinseys London office, where Anita Balchandani is a partner and Jakob Ekelf Jensen is a consultant; Achim Berg is a senior partner in the Frankfurt office; Saskia Hedrich is a senior expert in the Munich office; and Felix Rlkens is an associate partner in the Berlin office. Although the fashion industry appears to be turning a corner, the rebound is not being felt evenly across the globe. Nonetheless, this is still expected to be the fastest-growing category, with continued strong demand in many markets. Saskia Fairfull. If stores remain closed for two months, McKinsey analysis approximates that 80 percent of publicly listed fashion companies in Europe and North America will be in financial distress. With the pandemic adding to the segments woes, many brands have embarked on strategic reviews or have compressed multiyear transformations into just a few months. Saskia Hedrich is a senior knowledge expert in the Munich office. The industry is not looking forward to 2020suggesting strategic clarity will be important. NIKE, Inc. reports fiscal 2020 fourth quarter and full year results, Nike, June 25, 2020, news.nike.com. In China, further COVID-19 outbreaks and the real estate crisis have undermined the regions growth trajectory, as well as disrupted supply chains. where McKinsey & Company state in their Fashion on Climate report that over 70% of the . As the pandemic continued to run its course, the performance inequalities that have become a challenge over recent years were more in evidence than ever. About the event: Performances by popular music bands and artists like Nucleya, The Yellow Diary, Prateek Kuhad, and so on, only for young people aged between 13 and 26 years. Its a sentiment shared by industry executives: 40 percent expect conditions for the industry to improve in the year ahead. Consumers (and increasingly, investors) will reward companies that treat their workers and the environment with respect, and the deeper relationships that emerge will bring benefits in agility and accountability. Looking forward, we anticipate that the luxury sector will outperform the rest of the industry, as wealthy shoppers continue to travel and spend, and thus remain more insulated from the effects of hyperinflation. Instead, we referenced our 2018 list to gauge the fortunes of the elite group. (For more, see our infographic on the ten trends that will define the fashion agenda in 2018.) The authors wish to thank Pamela Brown, Emma Bruni, Dunja Matanovic, Michael Straub, and Robb Young for their contributions to this article. Brands like SHEIN, Chewy, and Gymshark make the shortlist, proving the crushing power fashion brands hold in the ecommerce space. The report reveals the industry is headed for a global slowdown; the combination of the war in Ukraine, rising inflation, and supply chain pressures is creating a bleak . The fashion industry delivered a 21 percent increase in revenues in 202021, and EBITA margins doubled by 6 percentage points to 12.3 percent. While direct-to-consumer, digital channels remain a top priority, fashion industry leaders will need to diversify their sales channels to maintain efficiency and market relevance. For fashion players, 2019 will be a year of awakening. They also need to invest in enhancing their productivity and resilience, as the outlook is uncertain. So what will change in 2017? The bottom line going into 2022 is that the fashion industry faces a complex mix of challenges and opportunities, in which there is little room for missteps. Athletic wear is the only category where record growth rates look to slow down slightly in 2018, as the athleisure trend has reached its peak in some mature markets. Meanwhile, extreme weather is negatively affecting supply chains and raw materials across Asia. Looking forward, we see more research into sustainable materials and technologies, as well as the circular economy. Some are household names, while others are less visible but still pack a punch. On the consumer side, we foresee the end of ownership, as concerns about sustainability grow and consumers and companies alike worry about how to alleviate their impact on the environment. Our first two reports, last yearand the year before, laid the foundation for rigorous in-depth research and analysis, focusing on the themes, issues, and opportunities affecting the sector and its performance. March 15, 2023 3 mins read. About 97 percent of fashion executives expect their cost of goods sold as well as selling, general, and administrative expenses to rise in 2023, spurring appetite across the industry to simplify assortments and manage costs. But regardless of touchpoint, consumers expect a consistent brand experienceacross channels. Europe, on the other hand, will probably continue to feel the effects of subdued tourist arrivals, leading in 2021 to a 2 to 7 percent sales decline from 2019. When it comes to categories, the improvement of fashion-industry sales is reflected in stronger sales growth forecasts across the board, including apparel and footwear. Given the disruptions in financial year 2019, it was not possible for us to calculate our annual list of 20 super winners accurately. And finally, brands will need to be more creative in marketing to attract customers through bold, differentiated content that cuts through a crowded digital environment in which data targeting is no longer effective. Terrorist attacks in France, the Brexit vote in the United Kingdom, and the volatility of the Chinese stock market have created shocks to the global economy. The authors wish to thank McKinseys Johanna Andersson and Dale Kim, as well as the Business of Fashions Robb Young, for their contributions to this work. Download The State of Fashion 2020: Coronavirus Update, the full report on which this article is based (PDF3MB). All this comes against a backdrop of the fashion industry having turned a corner in 2018, with increased growth justifying the optimism expressed in last years global fashion survey. The trick in 2020 will be to prove to investors they can turn potential into profit. Mainstream customers are moving into a decisive phase of digital adoption, and online sales of apparel and footwear are projected to grow rapidly. The conglomerate cohort witnessed as high as a 135 per cent increase in the number of net offers. Download The State of Fashion 2021, the full report on which this article is based (PDF9MB). While the luxury and sportswear sectors have dominated the industrys list of super successes in recent years, macroeconomic context might change that in the upcoming year. The report, the sixth in our series, discusses the major themes shaping the fashion economy and assesses a range of possible responses. Brands, suppliers, contractors, and property owners should also find ways to share the burden. Widespread store closures for an industry reliant on offline channels, coupled with consumer instinct to prioritize necessary over discretionary goods, hit brands bottom lines and depleted cash reserves. Growth has slowed in China, and major questions loom about the markets future trajectory. Fashion leaders are also watching global headlines closely in the year ahead, as macroeconomic and political uncertainties continue to obstruct business operations and escalate reputational risk. Mar 4, 2023, 12:12pm EST. Exactly when this will happen is impossible to know for sure, except that it will, in all likelihood, be linked to the discovery of a workable antiviral treatment and delivery of a proven vaccine, which some experts say is at least 12 to 18 months away. Download the report to view the exhibit. The outlook for the fashion industry varies across different value segments, too. Our survey of 290 global fashion executives and interviews with thought leaders and pioneers have helped us identify ten key themes that will set the agenda in the year ahead. These are some of the findings from our latest The State of Fashion report, written in partnership with the Business of Fashion (BoF) to explore the industrys fragmented, complex ecosystem. The State of Fashion 2023: Resilience in the Face of Uncertainty The seventh annual State of Fashion report by The Business of Fashion and McKinsey & Company reveals the industry is heading for a global slowdown in 2023 as macroeconomic tensions and slumping consumer confidence chip away at 2022s gains. However, there may also be new opportunities from growing southsouth trade and the renegotiation of trade agreements. More than ever, sustainability is dominating consumer priorities and the fashion agenda. Some brands over the past year expanded into the digital metaverse, rolling out virtual stores, gaming, and digital events. unpacks five areas that could see significant changes; the full report explores these areas in greater depth. Qualifications. McKinsey State of Fashion 2021 Survey; McKinsey analysis. According to McKinseys 2019 Apparel Chief Purchasing Officer Survey, while the absolute number of sustainable fashion products remains low, there has been a fivefold increase over the past two years. Felix Rlkens is an associate partner in the Berlin office. Business of Fashion and McKinsey & Co. released their annual report, "The State of Fashion 2023," containing insights for the upcoming year and 10 key trends that are set to shape the. After a challenging stretch, has fashion turned the corner? In 2021, the COVID-19 pandemic will accelerate industry trends, with shopping shifting to digital channels and consumers continuing to champion fairness and social justice. After experiencing 18 months of robust growth (early 2021 through mid-2022), the fashion industry is again facing a challenging climate. Download The State of Fashion 2023 Digital-first companies such as Alibaba, Amazon, Net-a-Porter, and Zappos continue to force fashion companies to provide an even more premium experience. Many consumers today expect perfect functionality and immediate support at all times, coupled with rapid delivery times as players constantly compete to expedite products. As with everything in this fast-moving sector, well just have to wait and see. Things are looking up, but the rebound may be uneven, says this years The State of Fashion report. Heading into 2023, the industrys decision makers will need to prepare to make strategic sacrifices while investing in agility and creativity to succeed when the market eventually recovers. Against the backdrop of increasing demand for Li-ion batteries across industries, McKinsey & Company projects that revenues along the entire value chain will increase fivefold, from about $85. The latest reading of the McKinsey Global Fashion Index (MGFI), meanwhile, reveals new insights into fashion-company performance by category, segment, and region. Perhaps unsurprisingly, 67 percent of executives said conditions for the fashion industry have worsened over the past 12 months. As I did last year,. It is quite a sobering read overall, but definitely worth a look! That's up from the 9% who had the same expectations for 2022. Trip.com Group, together with Accor and McKinsey, launches whitepaper on sustainable travel in China and sets out series of industry and consumer recommendations. This will also be a time for collaboration within the industryeven among competing organizations. The Super Winners include three new entrantsAnta Sports, Heilan Home (HLA Corporation), and Lululemonreflecting the strength of sportswear and the growing influence of Chinese players. Annapolis, Maryland 21401 . The outlook for the global fashion industry in 2023 is uncertain and tenuous. Reflecting our conversations with industry leaders over recent months, it examines the ten key trends likely to shape the business over the coming year. Overall, the industry continues to hover in a state of flux, and the fortunes of individual players can turn with frightening speed. . The seventh annual State of Fashion report by The Business of Fashion and McKinsey & Company reveals the industry is heading for a global slowdown in 2023 as macroeconomic tensions and. Imran Amed is the founder, editor-in-chief, and CEO of the Business of Fashion and an alumnus of McKinseys London office, where Anita Balchandani is a senior partner; Sarah Andr is a consultant in the Paris office; Achim Bergis a senior partner in the Frankfurt office; and Felix Rlkens is a partner in the Berlin office. Brands can no longer plan on complete political neutrality as their global customer bases become more connected and outspoken. Sustainability, which breaks into our respondents list of the most important challenges for the first time, is evolving from a tick-box exercise into a transformational feature. At the same time, they must adapt to evolving consumer demand and ensure they take the opportunities offered by new digital frontiers. But equally, there is no call for rags just yet. This is in stark contrast to the fashion industrys performance over the previous decade, which saw the industry expand at 5.5 percent annually. However, there will be opportunities. Companies that have performed the best over recent months tended to share at least one of two key characteristics (Exhibit 2). I'm an experienced and versatile communicator, currently working with McKinsey's Global Publishing team to launch a new product, McKinsey Explainers. While eCommerce and Sustainability Top Key Trends, Only 23% in Fashion and Apparel Industry Have High Confidence in Supply Chain. Physical retail has been under historic levels of pressure. They should bear in mind the three trends that we believe will shape the 2017 fashion industry: the global economy, consumer behavior, and the fashion business model. We kick off our ten key themes for this year by taking the temperature of the global economy and analyzing the complex impacts of the pandemic as it continues its unpredictable progress. McKinsey expects global fashion sales growth of 5 percent to 10 percent for luxury and negative 2 percent to positive 3 percent for the rest of the industry in 2023. 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