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Spain’s apparel market is entering a high-growth phase, with valuations projected to reach $28 billion by 2034, expanding at a steady CAGR of 3.52 per cent. According to latest industry data for 2026, a significant rise in disposable income - expected to trend around €245 billion in total consumer spending by 2027 - is fueling a transition from high-volume ‘fast fashion’ toward high-value, circular garment models.
Circular economics and the sustainability mandate
While fast fashion still commands over 90 per cent of Spain’s clothing budget, the ‘Tex-Eco’ era is forcing a structural recalibration. Market research indicates, sustainability concerns now influence 22 per cent of Spanish shoppers, up from 18 per cent in recent years. This shift is institutionalized by the upcoming EU Digital Product Passport (DPP) requirements, compelling retailers to provide full traceability by 2027. Leading Spanish conglomerates are already responding; for instance, Inditex has committed to utilizing 100 per cent ‘preferred’ (recycled or organic) textile fibers by 2030, aiming to mitigate the impact of the 621,000 tons of garments it currently produces annually.
Tourism and E-commerce convergence
Retail infrastructure is being boosted by a booming tourism sector, which contributes 11.7 per cent to Spain’s GDP. High-street hubs in Madrid and Barcelona are seeing a resurgence in ‘prestige demand,’ with luxury goods alone estimated at $7.4 billion in 2026. Simultaneously, e-commerce penetration has hit 63 per cent, with digital platforms like Zara Pre-Owned scaling second-hand services to capture the growing resale market. Analysts suggest that brands integrating AI-native ‘agentic commerce’ could see average order values rise by 26 per cent as they cater to a more ethically conscious, digitally savvy demographic.
Spain’s fashion ecosystem
The Spanish apparel industry is a global leader in retail innovation, home to the world's largest fashion groups. Key markets include Western Europe and Latin America, with current growth plans focused on textile-to-textile recycling and e-commerce scaling. Spain remains the fourth-largest European apparel market, targeting significant decarbonization by 2040.
Paris-based luxury titan Kering plans to protect its declining profit margins by shutting down approximately 200 retail locations globally by 2026-end. This structural realignment follows a challenging FY25, where the group reported a 13 per cent decline in total revenues to €14.7 billion. The move highlights a decisive shift from aggressive physical expansion to a leaner, higher-margin operational model as ‘quiet luxury’ trends and cautious consumer spending dampen demand for heritage labels.
Regional rationalization and the Gucci reset
The closure strategy disproportionately impacts Gucci, Kering’s flagship brand, which experienced a 22 per cent revenue nosedive in 2025. Following a net reduction of 75 stores last year, the group is scheduled to terminate 100 more leases in 2026, with 40 per cent of these cuts concentrated in the Asia-Pacific region. Luca Solca, Senior Analyst noted during a February 19, 2026, earnings call, these results ‘mark the bottom’ of the downturn. By streamlining its network, Kering successfully reduced inventory by 8 per cent in 2025, a critical step to preserve brand exclusivity and prevent the dilutive effects of excessive markdowns.
Strategic liquidity and category diversification
To navigate what McKinsey & Company describes as a ‘year of dislocation’ for fashion, Kering is reallocating capital toward more resilient categories. In a significant move, the group finalized the $4.7 billion sale of its beauty division to L'Oréal, which grants a 50-year exclusive licensing agreement expected to activate in the first half of 2026. This liquidity injection will support a major push into high-end jewelry - a category that has withstood the slump better than leather goods. Through acquisitions like Raselli Farco, Kering aims to leverage its new ‘execution-first’ roadmap to return to profitable growth by FY27.
Kering is a global luxury powerhouse managing iconic Houses including Gucci, Saint Laurent, and Balenciaga. Specializing in leather goods, apparel, and jewelry, the Paris-based group is currently executing a creative turnaround to reverse a 54 per cent three-year stock erosion. Under Luca de Meo, CEO, it targets margin recovery through leaner operations.
The Ministry of Textiles has officially set the operationalization of the Union Budget 2026 into motion, convening the inaugural National Industry Consultation at Vanijya Bhawan on February 19.
The session focused on the immediate rollout of two flagship programs: the Textile Expansion and Employment (TEEM) Scheme and the Tex-Eco Initiative. With a projected market value of $350 billion by 2030, the government is emphasizing a structural shift toward high-value manufacturing and sustainable practices to secure a $100 billion export target.
Scaling manufacturing and modernization
The TEEM Scheme serves as the cornerstone of the government’s 2026 strategy, designed to modernize the fragmented weaving, processing, and garmenting segments. By offering capital support and technology upgrades, the mission aims to mobilize fresh investments into traditional clusters. Rohit Kansal, Additional Secretary (Textiles), highlighted, the budget’s integrated framework is intentionally ‘textile-centric,’ focusing on labor-intensive segments to generate large-scale employment for women and rural youth. Current estimates suggest these measures could bridge the productivity gap with regional competitors like Vietnam and Bangladesh.
Sustainability as a competitive moat
Under the Tex-Eco Initiative, the ministry is institutionalizing circularity and resource efficiency as core requirements for global trade. The program encourages green manufacturing and provides a roadmap for ESG compliance, which is increasingly becoming a non-tariff barrier in European markets. To support this transition, the budget extended the export obligation period for garment and leather exporters from six months to one year, providing critical working capital flexibility.
The Ministry of Textiles oversees India's entire textile value chain, from natural fibers to premium apparel. It prioritizes the PM MITRA Mega Textile Parks and technical textiles to boost global competitiveness. Growth plans target a 15-20 per cent acceleration over five years, supported by an FY27 allocation of Rs 5,279 crore.
The 9th edition of Istanbul Fashion Connection (IFCO), which concluded on February 7, 2026, has firmly established Turkey as the primary ‘nearshoring’ alternative for European and Middle Eastern retailers. Hosting 450 exhibitors and nearly 30,000 professional visitors from 134 countries, the event highlighted a critical industry transition: the move toward proximity-based, high-velocity sourcing. As global trade faces renewed tariff uncertainties and logistical disruptions, Turkey is leveraging its position as the EU’s third-largest apparel supplier. Mustafa Paşahan, Vice Chairman, İHKİB, notes, the industry is entering a ‘new upward momentum,’ with a focus on high-value, design-driven production to counter rising operational costs.
Digital transformation and circularity mandates
A significant development at this year’s fair was the integration of ‘Agentic Commerce’ and Digital Product Passport (DPP) readiness. With the EU’s 2027 traceability mandates approaching, Turkish manufacturers showcased advanced digital infrastructures, including AI-generated modeling and RFID-integrated inventory systems. Data indicates, 49 per cent of European consumers now prioritize verifiable product origins, providing a competitive edge to Turkish firms that adopt transparent supply chains. The fair also debuted the ‘E2B Area,’ specifically designed to bridge the gap between traditional manufacturing and the $110 billion regional digital economy, emphasizing Turkey's dual role as both a production powerhouse and a technology-forward retail partner.
Targeted expansion in high-growth corridors
Beyond its traditional European stronghold, the Turkish apparel sector is aggressively targeting the US market, aiming to increase annual exports from $1.2 billion to $1.5 billion by 2027. This strategy capitalizes on the shifting global trade landscape, where retailers are seeking to diversify away from traditional Asian hubs. The ‘The Core Istanbul’ segment featured 22 avant-garde designers, demonstrating that the region is evolving from a mass-production center into a creative authority. While job losses and inflationary pressures remain significant hurdles, the sector’s 2026 export target of $282 billion reflects a robust recovery plan built on sustainability, speed-to-market, and high-margin specialized segments like eveningwear and technical textiles.
IFCO is Europe’s largest apparel trade fair, organized by the Istanbul Apparel Exporters' Association (İHKİB). It serves global markets across womenswear, menswear, and denim. With 2026 export targets set at $282 billion, IFCO is the central platform for Turkey’s strategic expansion into US and European luxury and sustainable retail segments.
The Apparel Export Promotion Council (AEPC) has officially endorsed the Government of India’s newly operationalized ‘Export Promotion Mission,’ a comprehensive framework designed to insulate the $179 billion textile and apparel sector from global volatility. Launched on February 20, 2026, the mission introduces a ‘360-degree support’ system, targeting critical bottlenecks in raw material procurement and logistics. This initiative arrives at a decisive moment as the industry navigates the aftermath of 2025's global trade shifts and seeks to capitalize on the termination of the 25 per cent additional U.S. tariff on Indian imports. By providing an interest subvention of up to 5 per cent for MSME exporters, the mission aims to lower borrowing costs and stabilize liquidity for small-scale suppliers currently competing in an ultra-competitive global landscape.
Capitalizing on the "Mother of All Deals"
With the landmark India-European Union Free Trade Agreement (FTA) operationalized in early 2026 and the India-UK FTA nearing implementation, Indian manufacturers are poised to gain zero-duty access to the world’s most lucrative apparel markets. Currently, Indian textile exporters face a 10–12 per cent duty in the EU, placing them at a disadvantage compared to duty-free competitors like Bangladesh. The Export Promotion Mission provides the ‘just-in-time’fiscal support required for rapid technological upgradation and compliance with the EU's 2027 Digital Product Passport (DPP) mandates. Dr A Sakthivel, Chairman, AEPC, notes, these trade deals, combined with the mission’s branding and marketing incentives, offer a unique window for India to scale its manufacturing and reclaim its historical status as a premier global sourcing hub.
Modernization and the 2030 vision
The mission aligns with the broader ‘Textile Expansion and Employment (TEEM) Scheme,’ focusing on the modernization of weaving and garmenting clusters. As the global apparel market is projected to grow at a CAGR of 3.3 per cent through 2034, India is targeting a disproportionate share of this growth by transitioning toward high-value, sustainable segments. The government’s ‘Tex-Eco Initiative’is further integrating circularity into production, helping Indian brands meet the rising demand for ESG-compliant apparel in Western markets. While challenges such as rising domestic costs and supply chain bottlenecks remain, the integrated approach of the 2026 mission provides a robust roadmap for achieving the industry’s ambitious $100 billion export target by 2030.
The Apparel Export Promotion Council (AEPC) is the official body representing Indian apparel exporters globally. It facilitates trade through market intelligence, international fairs, and policy advocacy. Focused on Ready-Made Garments (RMG), AEPC is currently steering India’s $37 billion export sector toward a 10 per cent annual growth target to reach a $100 billion valuation by 2030.
The Italian textile machinery sector is grappling with a significant cooling of demand, as fourth-quarter 2025 data reveals a 36 per cent plunge in order intake compared to the previous year. This downturn reflects a broader stagnation in global capital expenditure, with domestic demand particularly hard-hit, contracting by 50 per cent. Though slightly more resilient, foreign orders also retreated by 34 per cent during the October-to-December window. The orders index has consequently recalibrated to 31.5 points against a 2021 baseline of 100. Despite this 25 per cent Q-o-Q slide, the industry maintains a production backlog capable of sustaining operations for approximately 2.9 months, providing a slim buffer as manufacturers enter a volatile 2026.
India emerges as a critical growth counterweight
While consolidated annual figures show a 22 per cent decline in total order intake for 2025, a geographical shift in trade patterns is offering a strategic lifeline to Italian exporters. India has surged to become the primary destination for Italian textile technology, recording a remarkable 46.7 per cent growth in exports during the first ten months of 2025. This pivot to high-potential markets is viewed as essential for offsetting the double-digit retreats seen in traditional hubs. Marco Salvadè, President, ACIMIT, suggests, the high valuation of Italian precision engineering in South Asia remains a fundamental pillar for the sector’s eventual recovery, even as domestic investment remains paralyzed by high interest rates and cautious industrial policy.
Spinning sector leads gradual stabilization hopes
Beneath the aggregate decline, a divergence in sectoral performance is beginning to emerge, with spinning machinery exhibiting signs of renewed dynamism. While the overall forecast for the first quarter of 2026 remains guarded, an increasing number of manufacturers are signaling expectations of stability or incremental improvement. The industry’s recovery roadmap is increasingly tied to high-margin innovation and quality rather than volume, as firms seek to capture the next cycle of global textile modernization. Whether this optimism can translate into a reversal of the 2025 trend - where domestic orders declined by 28 per cent - depends largely on the speed of credit easing and the continued expansion of the Indian apparel manufacturing base.
ACIMIT (Association of Italian Textile Machinery Manufacturers) represents an industrial sector comprising approximately 300 companies. Primarily focused on high-tech exports, the Italian machinery industry is a global leader in spinning, weaving, and finishing technologies. With 2025 characterized by a 22 per cent order intake decline, the association is now prioritizing expansion in strategic Asian markets like India to drive its 2026 financial recovery.
The Apparel Export Promotion Council (AEPC) has officially endorsed the Government of India’s newly operationalized ‘Export Promotion Mission,’ a comprehensive framework designed to insulate the $179 billion textile and apparel sector from global volatility. Launched on February 20, 2026, the mission introduces a ‘360-degree support’ system, targeting critical bottlenecks in raw material procurement and logistics. This initiative arrives at a decisive moment as the industry navigates the aftermath of 2025's global trade shifts and seeks to capitalize on the termination of the 25 per cent additional U.S. tariff on Indian imports. By providing an interest subvention of up to 5 per cent for MSME exporters, the mission aims to lower borrowing costs and stabilize liquidity for small-scale suppliers currently competing in an ultra-competitive global landscape.
Capitalizing on the "Mother of All Deals"
With the landmark India-European Union Free Trade Agreement (FTA) operationalized in early 2026 and the India-UK FTA nearing implementation, Indian manufacturers are poised to gain zero-duty access to the world’s most lucrative apparel markets. Currently, Indian textile exporters face a 10–12 per cent duty in the EU, placing them at a disadvantage compared to duty-free competitors like Bangladesh. The Export Promotion Mission provides the ‘just-in-time’fiscal support required for rapid technological upgradation and compliance with the EU's 2027 Digital Product Passport (DPP) mandates. Dr A Sakthivel, Chairman, AEPC, notes, these trade deals, combined with the mission’s branding and marketing incentives, offer a unique window for India to scale its manufacturing and reclaim its historical status as a premier global sourcing hub.
Modernization and the 2030 vision
The mission aligns with the broader ‘Textile Expansion and Employment (TEEM) Scheme,’ focusing on the modernization of weaving and garmenting clusters. As the global apparel market is projected to grow at a CAGR of 3.3 per cent through 2034, India is targeting a disproportionate share of this growth by transitioning toward high-value, sustainable segments. The government’s ‘Tex-Eco Initiative’is further integrating circularity into production, helping Indian brands meet the rising demand for ESG-compliant apparel in Western markets. While challenges such as rising domestic costs and supply chain bottlenecks remain, the integrated approach of the 2026 mission provides a robust roadmap for achieving the industry’s ambitious $100 billion export target by 2030.
The Apparel Export Promotion Council (AEPC) is the official body representing Indian apparel exporters globally. It facilitates trade through market intelligence, international fairs, and policy advocacy. Focused on Ready-Made Garments (RMG), AEPC is currently steering India’s $37 billion export sector toward a 10 per cent annual growth target to reach a $100 billion valuation by 2030.
Marking a decisive return to its Californian heritage, Guess Jeans inaugurated its two-story ‘Homecoming’ flagship store in West Hollywood on January 31, 2026. Strategically located at the intersection of Melrose and San Vicente, the 3,000-sq-ft space serves as a cultural anchor for the brand’s global retail expansion. As the US denim market prepares to grow toward a projected $35.87 billion by 2033, Guess is leveraging this ‘lifestyle hub’ concept to differentiate itself in an ultra-competitive retail landscape. The store’s architectural narrative, featuring a sculptural façade made from recycled marble dust, signals a move toward high-concept, tactile environments that digital commerce cannot replicate.
Technological integration and customization
The flagship introduces the ‘Guess Airwash’ laboratory, a permanent installation utilizing Jeanologia’s Nanolaser and Ozone technology. This system allows for real-time garment customization while reducing water consumption by up to 80 per cent compared to traditional stonewashing. This space is about creating a platform for the next generation of ideas and craftsmanship, notes Nicolai Marciano, Chief New Business Development Officer. By bringing advanced industrial finishing directly to the sales floor, the brand addresses the rising consumer demand for personalized, eco-conscious apparel. This focus on ‘intentional shopping’ is critical as the brand navigates a broader fiscal landscape where licensing and wholesale remain robust despite softer direct-to-consumer traffic in traditional malls.
Navigating the FY2026 fiscal horizon
This opening follows successful launches in Tokyo, Amsterdam, and Berlin, forming a decentralized network of flagships designed to capture younger demographics through ‘hype-culture’ collaborations. While Guess, Inc. reported a moderated operating margin of 3.7 per cent in its recent quarterly results, the company is targeting revenue growth between 5.5 per cent and 7.4 per cent for FY26. The integration of high-margin private labels and the acquisition of rag & bone are central to this strategy. By prioritizing store productivity and immersive storytelling over sheer volume, Guess Jeans aims to reclaim its authority in the global $130 billion denim sector.
Guess Jeans is a contemporary denim label under Guess Inc., led by Nicolai Marciano. Focused on Gen Z and premium casual segments, the brand utilizes sustainable "Airwash" technology. With a global presence in over 100 countries, it plans to scale its flagship "Homecoming" concept to major fashion capitals through 2027.
Announced on February 19, 2026, the strategic alliance between Alphabet Inc’s Google and Southeast Asian tech giant Sea Ltd marks a definitive transition from conversational AI to ‘Agentic Commerce.’
Under this new MoU, the companies are co-developing an AI-powered agentic shopping prototype for Shopee. Unlike traditional recommendation engines, these autonomous agents are engineered to execute multi-step workflows - including product research, price comparison, and transaction finalization - across integrated platforms. This move aligns with industry data from the e-Conomy SEA 2025 report, which indicates, 60 per cent of early agentic AI adopters in the region are realizing over threefold returns on investment.
Enhancing high-velocity digital ecosystems
Beyond retail, the partnership leverages Google Cloud’s advanced infrastructure to overhaul Garena’s gaming pipeline and Monee’s financial services. Garena intends to deploy these AI solutions to accelerate game development cycles and automate live operations, a critical necessity in a market where 90 per cent of consumers now utilize AI-driven interactions.
Concurrently, Monee will integrate Google’s ‘Agent Payments Protocol’ (AP2) to facilitate secure, agent-led financial transactions. This partnership will drive innovation at scale, making high-level technology accessible to the digitally underserved, states Forrest Li, Chairman and CEO, Sea, highlighting the initiative's focus on inclusive economic growth.
Navigating competitive and regulatory frontiers
This collaboration emerges as a direct response to intensifying regional competition, notably from Alibaba’s Lazada, which recently debuted its ‘Qwen 3.5’ model tailored for the agentic era.
While the opportunity is vast - with Southeast Asia’s data center capacity projected to grow by 180 per cent to support these workloads - significant hurdles remain. Fragmented regional regulations and diverse data localization laws present operational challenges for cross-border agentic functions. However, by embedding AI into core business processes rather than treating it as a peripheral tool, the Google-Sea partnership aims to set a new benchmark for the $110 billion regional digital economy.
Sea Ltd is a leading global consumer internet company headquartered in Singapore, operating three core businesses: Shopee (e-commerce), Garena (digital entertainment), and Monee (financial services). Dominating Southeast Asia with a 52 per cent e-commerce market share, Sea is currently scaling AI-driven infrastructure to sustain its robust growth and 2026 financial outlook.
As evidenced by the focus on ‘Agentic Commerce’ at the upcoming 60th anniversary of EuroShop 2026 on February 22 at Messe Düsseldorf, the global fashion and apparel sector is moving beyond experimental technology toward scalable, high-impact solutions.
This year’s event will feature approximately 1,900 exhibitors from 60 countries. At the event, AI assistants will transition from simple chatbots to autonomous agents capable of managing inventory and executing personalized transactions. Data from Adobe Analytics underscores the commercial urgency of this shift, revealing, visitors engaging with generative AI tools spend 32 per cent more time on-site and generate a 26 per cent higher average order value.
Circularity and digital accountability
The apparel industry is also utilizing EuroShop to prepare for the 2027 EU Digital Product Passport (DPP) mandate. Retailers such as Douglas and OTTO are showcasing digital infrastructure designed to provide end-to-end product traceability. This transparency is no longer a regulatory burden but a retail advantage; real-time, RFID-driven inventory visibility has become the baseline for operational efficiency. According to recent forecasts, the German retail sector expects a 2 per cent revenue increase in 2026, and firms investing in automated, ‘always-on’ inventory systems are projected to outperform competitors by significantly reducing out-of-stock incidents and streamlining the stockroom-to-floor journey.
Immersive store experiences
Despite the digital growth, the physical store is being redefined as an ‘experience hub.’ The ‘Shopfitting & Store Design’ dimension remains the largest segment of the show, with 450 exhibitors emphasizing modular, sustainable materials. The store must now deliver what an algorithm cannot: sensory immersion, notes a lead strategist at ITAB Group. From AI-powered image production at OTTO to biometrically enabled ‘pay-with-a-smile’ systems, the retail landscape in 2026 is characterized by a seamless blend of high-tech efficiency and high-touch brand storytelling.
EuroShop is the world’s premier retail trade fair, held triennially in Germany. It serves the global retail, shopfitting, and technology sectors, focusing on eight dimensions from lighting to food service. With 2026 revenue in German retail projected to grow 2 per cent (0.5% inflation-adjusted), EuroShop remains the critical launchpad for international expansion and digital transformation strategies.
