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As of February 14, 2026, French luxury titan Kering is executing a decisive strategic retreat to reset its financial foundations. Following a grueling fiscal year where revenue plummeted 13 per cent to €14.7 billion, the Group has finalized a landmark €4 billion sale of its beauty division, Kering Beauté, to L’Oréal. Encompassing the prestige fragrance house Creed and 50-year licensing rights for brands like Bottega Veneta, this divestment signals a shift away from high-stakes internal diversification toward a more agile, capital-light licensing model designed to weather current macroeconomic volatility.
Navigating the Gucci slowdown
The Group’s primary challenge remains the revitalization of its flagship, Gucci, which saw sales erode by 22 per cent in 2025. Fueled largely by softening demand in the Asia-Pacific region and a broader cooling of the ‘logo-mania’ trend, this decline dragged the Group's recurring operating margin down to 11.1 per cent from 14.5 per cent the previous year. However, a sequential improvement in Q4 - where Gucci's comparable sales decline narrowed to 10 per cent - suggests that the ‘La Famiglia’ collection and a move toward higher-end, ‘quiet luxury’ leather goods are beginning to resonate with affluent consumers.
Deleveraging and the 2026 roadmap
Under the stewardship of Luca de Meo, CEO Kering has prioritized balance sheet health over aggressive expansion. The L’Oréal transaction and strategic real estate disposals in Paris and New York have successfully slashed net debt by €2.5 billion, bringing it down to €8 billion. Looking ahead, the company has scheduled a Capital Markets Day for April 16, 2026, where it will unveil a comprehensive roadmap to reignite brand desirability and enhance operational efficiency. 2025 was the turning point we needed, de Meo noted, emphasizing a fighting spirit aimed at returning to growth and margin improvement by year-end.
Kering manages a portfolio of iconic houses including Gucci, Saint Laurent, and Balenciaga. While historically denim and leather-focused, the Group is currently pivoting toward high-margin ‘soft luxury’ and high jewelry (e.g., Boucheron). Its 2026 strategy focuses on cost discipline and leveraging AI for digital personalization to capture 20 per cent of sales through e-commerce.
As of February 2026, the American apparel landscape is navigating a fundamental structural transition. The newly released 2026 US Fashion Consumer Outlook Report by Informa reveals that the era of dopamine-driven impulse purchasing has yielded to a period of intentional consumption. With 66 per cent of consumers now identifying value for money as their primary purchase driver - a figure that dwarfs the 10 per cent who prioritize trendiness - brands are being forced to justify every price point through a lens of durability and classic appeal.
Navigating discretionary displacement
Fashion is no longer competing solely within its own sector; it is now vying for a shrinking slice of discretionary income against experiential categories. In the current fiscal year, fashion ranks fourth in spending priority, trailing behind dining, travel, and fitness. Success in this environment requires a pivot from volume-chasing to margin-focused engagement, says Greg Kerwin, Senior Vice President, Fashion by Informa. This displacement is particularly evident in the mid-market, where undifferentiated labels are struggling to retain customers who are increasingly ‘trading down’ to off-price channels or "trading across" to wellness-related purchases.
The tariff and fit friction
External pressures are further complicating retail strategies. With anticipated tariff increases expected to inflate shelf prices, 92 per cent of consumers report plans to adjust their behavior by delaying purchases or seeking private-label alternatives. Simultaneously, the industry faces an internal crisis: 64 per cent of shoppers cite inconsistent sizing and poor fit as their greatest barrier to purchase. This ‘fit friction’ is driving a surge in AI-powered sizing technology investments, as retailers aim to reduce the high e-commerce return rates that eroded nearly 15 per cent of net margins in 2025.
Informa operates as a leading international events, digital services, and academic research group. Their fashion division acts as a critical intelligence hub for the global community, providing data-driven outlooks and B2B platforms like MAGIC and Coterie to help retailers operationalize shifting consumer sentiments across 55 countries.
The Bangladesh apparel sector is targeting a US $5 billion increase in annual exports to the United States following the signing of the landmark Agreement on Reciprocal Tariff (ART) on February 9, 2026. This strategic framework introduces a pivotal ‘Zero-Tariff Clause,’ granting duty-free access to specific volumes of garments manufactured using US-origin cotton and man-made fibers. By transitioning from a general reciprocal tariff of 19 per cent to zero for US-linked shipments, industry leaders estimate total apparel exports to the US could increase from current levels to US $15 billion within the next three years.
Fiber-linked market entry
The agreement effectively establishes a bulk swap mechanism where market access is tethered to raw material procurement. Under this ‘yarn forward’ and ‘cotton forward’logic, Dhaka has committed to large-scale purchases of American agricultural products to unlock zero-duty corridors. This deal recalibrates our competitive equation, particularly against regional rivals," notes a senior representative from the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
While US cotton typically commands a premium of 3–4 cents per pound, the resulting 19 per cent tariff savings are expected to more than offset higher input costs, incentivizing local spinning mills to overhaul their supply chains toward American sourcing.
Operational hurdles and logistics
Despite the optimistic export targets, the sector faces significant structural challenges. Currently, less than one-third of Bangladeshi garments are produced from fiber-to-finished product domestically, with the majority relying on imported fabrics from China and India. Capturing the full benefit of the ART will require a massive surge in backward linkage investments.
Furthermore, the operational success of this deal hinges on the timely development of the Matarbari deep-sea port, which is essential for reducing the transit time and cost of bulk cotton imports from the US, currently estimated to be 30 per cent higher than regional alternatives.
Bangladesh is the world's second-largest garment exporter, with the RMG sector contributing 84 per cent of total export earnings and 10 per cent of national GDP. The industry aims for a $100 billion global export target by 2030, supported by over 200 LEED-certified green factories and a workforce of 4.4 million.
Following the second session of the Joint Trade Committee (JTC) in Islamabad on February 11, 2026, Pakistan and Cambodia have formally committed to a high-level industrial partnership aimed at restructuring regional textile supply chains. Having recorded a historic $6.39 billion in textile exports during the first trimester of FY2025, Pakistan is positioning itself as a primary alternative to China for Cambodia’s upstream requirements. Currently, Cambodia imports nearly 90 per cent of its yarn and fabric, with China holding a dominant 60 per cent market share. By integrating Pakistan’s specialized weaving and spinning capacities - responsible for approximately 60 per cent of its total export revenue - Cambodian garment manufacturers aim to mitigate over-reliance on single-source suppliers while enhancing resilience under RCEP rules of origin.
Expansion into technical textiles and SEZ
The bilateral roadmap prioritizes a transition toward high-value segments, specifically technical textiles, a global market projected to reach $271.83 billion by 2026. This collaboration focuses on ‘Mobiltech’ and ‘Meditech’ applications, leveraging Pakistan’s raw material base and Cambodia’s sophisticated assembly infrastructure. To facilitate this, Cambodia has proposed country-specific investment clusters within its Special Economic Zones (SEZs), offering 10-year tax holidays to Pakistani enterprises. This engagement serves as a gateway for Pakistani value-added goods into the ASEAN bloc, noted Jam Kamal Khan, Federal Minister emphasizing, the proposed Preferential Trade Agreement (PTA) will be instrumental in reducing the 10% VAT and associated tariffs currently impacting bilateral trade flows.
Contributing 8.5 per cent to the national GDP and employing 38 per cent of the manufacturing force, the Pakistan textile sector remains the nation’s industrial backbone. Specialized in home textiles, cotton yarn, and denim, the industry is currently undergoing a $5 billion technological upgrade to boost annual export capacity toward $30 billion. With a fiscal focus on sustainable high-performance fabrics and synthetic blends, the sector is increasingly targeting ASEAN markets to offset traditional volatility in Western demand.
The National Council of Textile Organizations (NCTO) has launched a high-stakes legislative campaign to block a new bill that industry leaders warn could reverse hard-won trade protections. In a formal letter to Mike Johnson, House Speaker and Hakeem Jeffries, Minority Leader; Kim Glas, President and CEO, NCTO urged leaders to reject the Secure Revenue Clearance Channel Act. According to the association, the bill threatens to effectively dismantle recent bipartisan efforts to secure the domestic supply chain against unfair competition.
The domestic textile industry currently supports over 471,000 American jobs and contributes an estimated $63.9 billion in annual shipments to the U.S. economy. For manufacturers who have invested $2.98 billion in new capital expenditures as of 2022, the threat of shifting trade rules remains a primary operational concern.
The battle over ‘De Minimis’ resurfaces
At the heart of the dispute is the ‘de minimis’ trade exemption, a rule that historically allowed packages valued under $800 to enter the US duty-free and with minimal inspection. While designed to streamline low-value trade, the loophole was increasingly criticized for allowing a flood of untaxed Chinese e-commerce goods into American markets.
Last year, Congress passed bipartisan legislation to phase out the exemption by July 2027, and the Trump administration accelerated this via executive action in late 2025. NCTO reports, these measures have already yielded tangible results: package volumes from offshore platforms have dropped significantly, while federal duty collections have risen. The industry asserts, the proposed Secure Revenue Clearance Channel Act would recreate these vulnerabilities by granting duty relief to foreign importers on packages up to $600 with reduced data requirements.
Addressing labor concerns and leveling the playing field
Beyond economic competition, the NCTO has tethered its opposition to the Act to national security and human rights standards. The association cited 2023 findings from the House China Select Committee, which revealed that Chinese e-commerce giants were shipping billions of dollars worth of goods duty-free while lacking sufficient due diligence to ensure products were not the result of forced labor.
In contrast, American manufacturers operate under stringent labor and environmental regulations. The NCTO argues, the current enforcement environment, which mandates proper inspection and levies duties on all commercial shipments, is essential to maintaining the integrity of US consumer laws. By requiring less information on foreign packages, the new legislation would make it nearly impossible for customs officials to verify origins or detect illicit goods, once again opening a ‘backdoor’ for offshore producers.
A strategy of resilience and domestic investment
The push to block the legislation is part of a broader industry strategy to prioritize a ‘yarn-forward’ supply chain and domestic production. In 2024, the US exported $28 billion in fibers, textiles, and apparel, underscoring the global competitiveness of American-made goods when trade rules are applied uniformly.
The NCTO remains a critical voice in Washington for a sector that provides over 8,000 products annually to the U.S. military and produces high-tech textiles used in aerospace and medical applications. Industry leaders maintain that the long-term viability of these manufacturers depends on a stable regulatory environment where offshore e-commerce platforms are held to the same duty and inspection standards as domestic businesses.
Buoyed by a 26 per cent Y-o-Y rise in Christmas sales, British heritage label Jigsaw is accelerating its physical retail expansion in 2026. Following a rigorous structural reset in mid-2025 - which included a strategic capital injection from majority shareholder David Ross - the retailer has successfully re-established its ‘full-price’ trading model. This fiscal discipline resulted in a 35 per cent improvement in profit margins, providing the necessary liquidity to expand its footprint in premium market towns and regional city centers.
Capitalizing on category growth and technical resilience
Market data from early 2026 indicates, while broader consumer confidence remains fragile, the ‘affordable luxury’ segment is outperforming the wider high street. Jigsaw’s growth was particularly pronounced in technical categories, with leather apparel seeing a six-fold increase in full-price sales. Tikki Godley, Managing Director, notes, the company’s focus has returned to ‘thoughtful design and quality craftsmanship,’ moving away from deep discounting. To support this volume, the brand has returned to a refurbished, sustainable head office at Kew Studios, equipped with solar infrastructure to mitigate the rising energy costs currently impacting UK retailers.
Strategic store portfolio and digital integration
Unlike competitors currently retrenching, Jigsaw is leveraging its 14 per cent reduction in business costs to invest in experience-led bricks-and-mortar sites. The brand’s in-store sales rose by 14 per cent in the latest quarter, while concession performance increased by 46 per cent, signaling strong demand for physical brand touchpoints. By integrating advanced data platforms and a new ‘instant refund’ partnership with Reveni, Jigsaw is bridging the gap between its 34 per cent online growth and its physical estate. This omnichannel maturity is expected to drive a sustainable upward trajectory as the brand eyes further expansion through 2026.
Founded in 1970, Jigsaw is a premium British fashion retailer specializing in high-quality womenswear and accessories. Following a 2025 turnaround led by Godley and David Ross, Investor, the brand is expanding its UK store estate and third-party concessions. It currently targets double-digit profit growth through a disciplined full-price retail model and sustainable operational practices.
The Vietnamese textile and apparel (T&A) sector is entering a crucial transformation phase in 2026, aiming for a record US$50 billion in export revenue. This ambitious target follows a robust 2025 performance where exports reached approximately US$46 billion, cementing Vietnam's status as the world’s third-largest garment exporter. However, the industry is no longer relying on the traditional low-cost, mass-volume model. Instead, manufacturers are moving toward a ‘high-intellectual-content’ segment, characterized by smaller, technically demanding orders and end-to-end manufacturing solutions like FOB (Free on Board) and ODM (Original Design Manufacturing).
Capitalizing on regional integration and tariff advantages
A significant driver of this growth is the ‘China Plus One’ strategy, as global brands further diversify their supply bases. Vietnam’s competitive edge is sharpened by its network of 16+ free trade agreements, including the CPTPP and EVFTA. In early 2026, foreign direct investment (FDI) in manufacturing continues to surge, with January disbursements hitting a five-year high of $1.68 billion. This capital is increasingly flowing into upstream sectors - spinning, weaving, and dyeing - to reduce reliance on imported raw materials and ensure compliance with strict ‘rules of origin’ required for zero-duty access to US and EU markets.
Direct access to a restructured supply chain
Reflecting these structural changes, the Global Sourcing Fair Vietnam 2026, scheduled for April 22–24 at the SECC in Ho Chi Minh City, has expanded to host over 500 verified manufacturers. Unlike previous years focused purely on assembly, the 2026 edition highlights the "ASEAN Pavilion" and a new focus on sustainable packaging, reflecting the industry's shift toward vertical integration. The Biggest pressure in 2026 is no longer immediate tariff shocks, but the necessity for suppliers to absorb cost increases through technical efficiency, noted Hoang Manh Cam, Executive, Vinatex. Major buyers like Adidas, Walmart, and Target are reportedly utilizing 1-on-1 business matching to secure long-term partnerships with factories that offer advanced automation and ESG-compliant production lines.
Global Sources is a leading multi-channel B2B media company that facilitates global trade through trade shows, digital platforms, and magazines. It serves over 10 million registered buyers and users, focusing on verified suppliers across Asia. The company’s 2026 strategy emphasizes ‘Smart Sourcing,’ integrating online-to-offline (O2O) solutions to connect international retailers with specialized manufacturers in high-growth markets like Vietnam and India.
Danish fashion conglomerate Bestseller is executing a major strategic entry into Argentina, committing US$30 million to establish a robust footprint in a market currently undergoing a radical economic transformation. Known for global staples like Jack & Jones and Only, the multi-brand retailer plans to inaugurate 30 physical stores across the country. This move coincides with the Milei administration’s aggressive deregulation of the textile and apparel sectors, which has seen import restrictions slashed and a subsequent 86 per cent rise in foreign garment arrivals over the past year.
Navigating high-inflation dynamics and pricing disparity
The decision to invest in Argentina comes at a critical juncture where domestic clothing prices remain nearly 40 per cent higher than regional averages in Chile or Brazil. By leveraging its vast global supply chain, Bestseller aims to bridge this pricing gap, providing consumers with high-fashion alternatives at a time when local footwear and apparel consumption has seen sharp declines due to inflationary pressure. Industry analysts suggest, Bestseller’s entry will intensify competition with established players like Zara, which historically priced Moroccan-made goods 70 per cent higher in Argentina than in Brazil due to previous tax structures.
Capitalizing on regional economic stabilization
Bestseller’s US$30 million injection is part of a broader ‘cautious optimism’ sweeping through the Southern Cone. With Argentina's GDP projected to grow by 4 per cent in 2026, the retailer is positioning its brick-and-mortar stores to capture a rebound in consumer confidence. While e-commerce has soared, Bestseller’s focus on 30 physical locations indicates a commitment to ‘experiential retail,’ a trend forecasted to dominate the global fashion retailing market, which is expected to reach $106.69 billion by the end of 2026.
Founded in Denmark in 1975, Bestseller is a family-owned global fashion leader providing clothing and accessories for women, men, and children. Operating over 20 brands in 70 markets, the company is focused on scaling its Latin American presence to offset plateauing demand in European hubs. Financially, the group maintains a strong liquidity position, allowing it to navigate Argentina's currency volatility while targeting a dominant share of the high-growth ‘man-made cellulosic’ and synthetic apparel segments.
British contemporary label Hobbs London is leveraging a rise in domestic and international demand to fundamentally restructure its retail estate. Following a fiscal year where pre-tax profits for parent group TFG London more than doubled to £6.2 million, the brand is moving away from high-street saturation in favor of high-traffic, premium ‘transport hubs’ and multi-brand flagships. This strategy was exemplified by the recent opening of its 12,000-sq-ft multi-brand flagship at Liverpool ONE, now the group’s largest showcase space globally.
Capitalizing on royal influence and technical tailoring
Famously championed by the Princess of Wales, the label continues to see a sustained ‘Kate Effect,’ which experts estimate contributed to a 15 per cent uptick in ‘occasion-wear’ inquiries throughout early 2026. Data indicates, while broader UK retail footfall has fluctuated, Hobbs has maintained a conversion rate 8 per cent higher than the industry average by focusing on technical tailoring and heritage craftsmanship. The brand’s ‘Tilda’ wool coat and ‘Sinead’ jacket remain top-performing SKUs, driving a property strategy that prioritizes high-visibility locations like Canary Wharf, Manchester’s Trafford Centre, and London Bridge Station.
Strategic diversification and international market penetration
To mitigate the impact of rising domestic operational costs, Hobbs is aggressively diversifying its geographic footprint. The 2026 expansion roadmap includes new standalone stores in Hong Kong, Hamburg, and Westchester, New York, bringing its total global touchpoints to approximately 80. By integrating an ‘Inside Story’ homewares department into its larger formats and utilizing a luxury styling suite for event shoppers, the brand is successfully transitioning from a garment retailer to a holistic lifestyle destination. This maturity in the "masstige" segment positions Hobbs as a key defensive asset for TFG London as it navigates a volatile global apparel market.
Established in 1981, Hobbs London is a premium womenswear brand specializing in feminine tailoring and occasion-wear. Operating under TFG London, it targets affluent, modern professionals across the UK, US, and Europe. The company is currently executing a ‘right-sizing’ strategy, replacing smaller boutique sites with high-volume flagship and travel-retail locations to maximize operational efficiency.
In a retail landscape increasingly defined by normalization, industry jargon for stagnant growth and cautious consumer spending, Ralph Lauren Corporation has staged a rare commercial breakout. The iconic American brand reported third-quarter fiscal 2026 results that exceeded expectations, posting a 10 per cent year-on-year revenue increase to $2.41 billion.
This performance not only outstripped diversified luxury conglomerates but also left many of Ralph Lauren’s direct American competitors in the dust. While LVMH reported a modest 1 per cent organic growth and Kering braced for a 5.3 per cent decline at Gucci, Ralph Lauren’s results signal that a well-executed strategy of trading volume for value can still generate meaningful commercial momentum in the luxury space.
The great luxury divergence
The latest quarter underscores a growing divergence between luxury brands that maintain brand heat through timeless aesthetics and those grappling with creative transitions. Ralph Lauren’s Asia-Pacific business, which rose 20 per cent year-on-year, exemplifies the power of cultural resonance. As Chinese consumers increasingly favor discreet wealth over ostentatious logos, the Polo brand has positioned itself as a marker of elevated taste and understated luxury.
Table: Luxury brands Q3 2026 performance
|
Brand / Group |
Q3 revenue growth (YoY) |
Adjusted operating margin |
Geographic driver |
|
Ralph Lauren |
+10% |
20.90% |
Asia (+20%) |
|
Tapestry (Coach) |
+5.0% |
18.20% |
North America (+2%) |
|
Capri Holdings |
-4.00% |
7.70% |
Europe (-3%) |
|
LVMH (Fashion/Leather) |
+1.0% |
Stable |
Japan (+12%) |
|
Burberry |
-17% (est.) |
Under Repair |
UK/Middle East |
The ‘Handbag Hedge’ and pricing power
A key factor behind Ralph Lauren’s outperformance is the expansion into high-margin leather goods. Historically recognized as an apparel-heavy label, the company has successfully positioned handbags as a gateway into the brand, appealing to aspirational consumers who might bypass European heavyweights such as Chanel or Hermès due to price sensitivity.
With price points ranging from $200 to $3,600, Ralph Lauren is capitalizing on a segment that many European competitors have left underserved. This approach allows the brand to maintain its aspirational image while capturing discretionary spending from the upper-middle-class demographic.
In parallel, Ralph Lauren’s Average Unit Retail (AUR) strategy has reinforced its value proposition. The company achieved an 18 per cent increase in AUR this quarter, demonstrating that consumers are willing to pay a premium for Polo iconography when combined with elevated craftsmanship. The brand is also successfully broadening its customer base. In Q3 alone, Ralph Lauren added 2.1 million new direct-to-consumer (DTC) customers, with a notable skew toward Gen Z and Millennial buyers in the Asia-Pacific region. This influx underscores the effectiveness of both product strategy and digital engagement initiatives.
Navigating tariff pressures and global supply chains
Despite these bullish results, the luxury sector remains vulnerable to a potential margin squeeze arising from shifting trade policies. Ralph Lauren management acknowledged that US tariffs have begun to affect cost structures. In response, the company has strategically relocated a larger portion of high-end manufacturing to Italy and Spain and leveraged its scale to renegotiate logistics contracts.
This proactive approach to supply chain management provides a clear competitive advantage over smaller players like Capri Holdings, which saw gross margins decline by higher-than-anticipated tariff costs during the same period. By contrast, Ralph Lauren has insulated its business from the worst of these pressures, maintaining both profitability and pricing power.
A global lifestyle powerhouse
Ralph Lauren today stands as a global designer of premium lifestyle products, ranging from apparel to accessories and home goods. Its market capitalization has benefited from a 42 per cent share price increase over the past 12 months, outperforming the S&P 500’s apparel index and reaffirming investor confidence.
Looking ahead, the company is projecting low-double-digit growth in 2026, supported by its ambitious ‘30 Cities’ strategy, which aims to deepen presence in key urban centers, and a continued digital acceleration that connects directly with younger consumers. In a market where peers struggle to maintain relevance, Ralph Lauren’s blend of heritage branding, pricing discipline, and geographic diversification positions it as one of the few luxury companies breaking free from the ceiling of stagnation.
