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Rising costs, inflation, and economic uncertainty are challenging the global retail and fashion industry, leading to shifts in consumer behavior and company strategies. While a cyclical slowdown is evident, McKinsey’s 2025 State of Fashion report highlights an increase in ethical purchasing habits, growing consumer awareness, and evolving sustainability efforts by brands.
Julie Holt, Global Business and Exhibitions Director for the International Expo Group and organizer of the Global Sourcing Expo, emphasizes these changes, noting that shifting buying patterns are visible across major markets. “While year-on-year growth continues in key regions like the US and Europe in both luxury and non-luxury categories, the slowdown from the peak in 2021 is evident. Meanwhile, China is experiencing marginal growth in the non-luxury sector but a decline in luxury sales,” she says.
Economic confidence and reduced overseas spending have impacted China’s luxury fashion sector, with Bain & Company reporting an 18-20 per cent decline in 2024. In response to these market conditions, retailers and brands must understand generational preferences to attract consumers effectively.
How different generations shop
Baby Boomers (52-plus): Affluent and financially stable, this group spends more on fashion than younger consumers. They value quality and prefer in-store shopping but are increasingly adopting digital platforms. Reports indicate that over-65s also allocate significant spending to travel, leveraging higher interest rates to boost their disposable income. Holt highlights the need for retailers to prioritize user-friendly digital experiences to engage this audience.
Generation X (45-60): Known as ‘hybrid shoppers,’ Gen X values convenience and affordability. They balance online and in-store shopping and show interest in sustainable products if pricing is reasonable. Loyalty programs and personalized shopping experiences appeal to this group.
Millennials (28-43): Highly influenced by digital content, reviews, and peer recommendations, Millennials prioritize experiences over possessions. This generation is drawn to exclusive shopping destinations and subscription-based services such as fashion rentals and streaming. Holt notes that brands targeting Millennials should focus on curating unique and immersive shopping experiences.
Generation Z (13-28): Dominated by social media influence, Gen Z shops primarily via mobile devices and values convenience services like express shipping and free returns. They are price-conscious and less brand loyal, prioritizing quality and affordability. Thrifting and sustainable fashion appeal to them, as they seek unique, long-lasting pieces while supporting environmental causes.
Industry collaboration for future growth
Holt emphasizes the importance of industry collaboration in navigating these evolving trends. “Events like the Global Sourcing Expo play a key role in connecting brands, retailers, and industry professionals. They offer a platform for sharing insights, fostering partnerships, and addressing challenges together.”
With shifting consumer demands and economic pressures, adapting to generational preferences and fostering industry cooperation will be crucial for sustained growth in the retail and fashion sectors.
Lenzing AG’s Supervisory Board will see key changes following the company’s Annual General Meeting on April 17, 2025. Current Chairman Cord Prinzhorn will step down at the end of his mandate to focus on new and existing engagements within B&C Group.
Patrick Lackenbucher, Managing Director of B&C Group, has been nominated as a new board member and is designated to serve as interim Chairman. With over 15 years of experience supporting Lenzing’s strategic and financial initiatives, Lackenbucher aims to strengthen the company’s global market leadership in sustainable cellulosic fibers.
Prinzhorn reflected on his tenure, highlighting achievements such as strategic investments in Brazil, Thailand, and China, cost reductions, and debt management. He expressed gratitude to the Supervisory Board, Managing Board, and employees for their contributions to these initiatives.
Lackenbucher emphasized the commitment of Lenzing’s core shareholders, B&C and Suzano, to enhancing the company’s competitiveness. He stressed the importance of profitability in navigating global market challenges and sustaining investments in innovation.
Lenzing CEO Rohit Aggarwal acknowledged Prinzhorn’s leadership, crediting him for revenue and cost initiatives that have bolstered financial performance. He also welcomed Lackenbucher’s extensive experience and strategic vision.
Additionally, Leonardo Grimaldi, Executive Vice President at Suzano S/A, has been nominated to join the Supervisory Board, replacing Marcelo Bacci. Grimaldi, an expert in the global pulp market, holds board positions at Portocel and Veracel Celulose S/A.
Prinzhorn will remain Chairman until the conclusion of the AGM, after which the Supervisory Board is expected to elect Lackenbucher as his successor.
Karl Mayer has successfully defended its trademarks for Prowarp, Karl Mayer Prosize, and Prodye after a legal battle in Turkey. The company, known for its high-quality textile machinery, registered these trademarks between 2012 and 2018.
However, competitors Proteknik Tekstil San. ve Dıs Tic. A S and Prosmh Makina Pazarlama Sanayi ve Ticaret Anonim Sirketi attempted to exploit these names, leading to a court case.
Despite sending a cease-and-desist letter, infringement continued until a Turkish regional court ruled in Karl Mayer’s favor on 12 December 2024. The ruling prohibits the unauthorized use of these trademarks for manufacturing, sales, packaging, and online activities.
“We invested heavily and pursued this case for nearly seven years to protect our technology, customers, and reputation,” said Martin Fuhr, Head of Product Portfolio Management, Warp Preparation.
Karl Mayer continues to innovate, reinforcing its leadership in warp preparation technology. Recent advancements in Prosize include the Cascade system, which reduces steam consumption by 7 per cent, and the Smart Size Box, enhancing predictive maintenance while lowering size add-on by 10 per cent.
The Prowarp system integrates cloud-based Proactive Warping for superior warp quality, while Prodye’s specialized vat technology achieves deeper indigo shades with reduced chemical usage.
By safeguarding its intellectual property and driving innovation, KARL MAYER strengthens its market position and commitment to advancing textile technology.
At an event organized by BGMEA’s election-centric alliance, Forum in Dhaka, Bangladesh garment makers urged for a separate ministry for the garment and textile sector. Industry leaders at the event emphasised on the need for long-term policies to tackle the multifaceted challenges currently being faced by the sector both locally and globally.
Highlighting the urgency of establishing clear directives to ensure the sustainability of the garment industry, industry representatives warned, any failure to implement such measures could jeopardise the sector’s survival.
Emphasizing on the importance of policy support for a sustained period, Mahmud Hasan Khan Babu, Panel Leader, Forum, said, ongoing domestic and foreign conspiracies against the sector such as the recurrent labor unrest need to be investigated. The government needs to help alleviate the harassment faced by entrepreneurs from customs inspections, he adds.
Voicing concerns over the government’s lack of understanding of the business dynamics, Anisur Rahman Sinha, Former President, BGMEA, asserted, it is the association’s responsibility to engage with the Government to address these issues. The lack of attention to international trade challenges is leading to a growing frustration among business owners, he noted.
Anwar-ul Alam Chowdhury, Former President, BGMEA emphasised on the need for skilled leadership to navigate crisis situations in the industry. Urging for a comprehensive policy framework, Rubana Huq, Former President, highlighted the need for owners to enhance their bargaining power with foreign buyers to secure fair prices.
The event concluded with Rashid Ahmed Hosaini, Secretary General, Forum, emphasizing on the need for immediate action to support the industry. The health of the garment sector is closely linked to Bangladesh’s economic sustainability, he said.
The Consumer Price Index (CPI), a critical barometer of economic health, reflects the average change in prices paid by urban consumers for a basket of consumer goods and services. While food and energy prices often dominate headlines, the subtle fluctuations within the apparel sector also weave a significant thread into the overall inflationary tapestry. Understanding the interplay between apparel prices and the CPI requires a nuanced analysis of the factors driving these costs and their subsequent impact on the index.
Reasons for apparel price fluctuations
There are several reasons for the dynamic nature of apparel prices, influencing their direct impact on the CPI.
Raw material costs: Cotton, wool, and synthetic fibers are subject to global supply and demand dynamics. Weather patterns, agricultural yields, and geopolitical events can drastically affect these prices. Rising oil prices, also directly impact the cost of synthetic fibers, which are petroleum-based.
Manufacturing and labor costs: Labor costs in manufacturing hubs, particularly in developing countries, play a significant role. Minimum wage changes, labor shortages, and evolving worker rights movements can impact production expenses. Increased automation and technological advancements can potentially offset labor costs, but these investments also carry their own financial implications.
Transportation and logistics: Global supply chains are intricate and vulnerable to disruptions. Shipping costs, fuel prices, and port congestion directly affect the final price of apparel. The rise of e-commerce has also increased the demand for faster and more efficient delivery, adding to logistical expenses.
Currency exchange rates: Apparel is often manufactured in countries with different currencies. Fluctuations in exchange rates can significantly impact import costs, leading to price adjustments for consumers.
Consumer demand and fashion trends: Seasonal demand, fashion trends, and consumer preferences play a crucial role. High demand for specific items or brands can lead to price increases, while oversupply can result in discounts. Fast Fashion creates a very rapid cycle of production and consumption, which can lead to rapid price changes, and increased waste.
Tariffs and trade policies: Import tariffs and trade agreements directly impact the cost of imported apparel. Changes in these policies can lead to significant price fluctuations.
Impact on the CPI
Apparel constitutes a portion of the CPI's market basket. While its weight may be smaller than that of food or housing, its fluctuations still contribute to the overall inflation rate.
Direct contribution: When apparel prices rise, they directly contribute to an increase in the CPI. Conversely, price decreases can help dampen inflationary pressures.
Indirect effects: Apparel price changes can also reflect broader economic trends. For example, rising raw material costs might indicate inflationary pressures across other sectors. Supply chain disruptions affecting apparel could signal similar issues in other industries.
Consumer sentiment: Changes in apparel prices can influence consumer sentiment and spending habits. If consumers perceive rising prices across the board, they may reduce overall discretionary spending, impacting economic growth.
Table: US CPI changes
|
Month & Year |
All Items CPI (seasonally adjusted % change from previous month) |
Apparel CPI (seasonally adjusted % change from previous month) |
|
Jul. 2024 |
0.1 |
-0.3 |
|
Aug. 2024 |
0.2 |
0.1 |
|
Sep. 2024 |
0.2 |
1 |
|
Oct. 2024 |
0.2 |
-0.9 |
|
Nov. 2024 |
0.3 |
0.1 |
|
Dec. 2024 |
0.4 |
0.1 |
|
Jan. 2025 |
0.5 |
-1.4 |
Source: U.S. Bureau of Labor Statistics (BLS)
The table shows that the apparel index does not always move in lockstep with the overall CPI. There are months where the apparel index increases while the overall CPI shows smaller increases, or vice versa. For example, in September 2024 there was a 1.0 per cent increase in the apparel CPI, while the overall CPI increased by 0.2 per cent. Also in January of 2025, while the overall CPI increased by 0.5 per cent, the apparel CPI decreased by 1.4 per cent. This volatility in apparel prices reflects the factors such as seasonal sales, changing fashion trends, and fluctuations in raw material and transportation costs. The data reinforces the point that while apparel is a component of the CPI, it also has its own unique drivers.
Are apparel prices generally in line with other products?
The relationship between apparel prices and those of other products is complex and varies. Apparel prices are often more volatile than those of essential goods like food and energy. Fashion trends and seasonal demands create fluctuations that are less pronounced in other sectors. However, apparel prices are also subject to the same macroeconomic forces that affect other products. Rising energy costs for instance, impact transportation and manufacturing expenses across various industries. The globalized nature of apparel production means that its prices are particularly sensitive to international trade and economic conditions, perhaps more so than some locally produced goods. The rise of e-commerce and fast fashion has had a much larger impact on apparel pricing than many other sectors.
The global luxury industry, synonymous with exclusivity and opulence, is changing as is revealed in Bain & Company's 23rd Annual Luxury Report. It highlights a nuanced landscape marked by shifting consumer behavior, regional disparities, and evolving market dynamics.
What is driving change?
Macroeconomic uncertainty: Global economic instability, due to geopolitical tensions and fluctuating markets, has affected consumer confidence. This uncertainty has led to more cautious spending, particularly on high-end discretionary items.
Pricing strategies: In recent years, luxury brands have implemented substantial price increases. While intended to increase brand prestige and offset rising operational costs, these hikes have, in some cases, alienated consumers, especially younger demographics who question the value proposition.
Evolving consumer values: There's a shift towards experiential luxury over material possessions. Consumers are increasingly prioritizing unique experiences such as travel and fine dining, reflecting a broader change in what is deemed valuable.
Current scenario of state of luxury
In 2024, the global luxury market saw a slight drop, with overall spending estimated at €1.48 trillion, which was 1 to 3 per cent decrease compared to 2023. This decline is viewed as a normalization following after robust growth in 2022 and 2023, with performance still exceeding pre-pandemic levels.
The personal luxury goods segment which includes fashion, accessories, and beauty products, saw its first drop in 15 years (excluding the COVID-19 period), declining by 2 per cent to €363 billion. This was due to lower consumer spending amid economic uncertainties and resistance to continued price increases.
Regional insights
Asia-Pacific: Japan emerged as a bright spot, leading global luxury sales growth due to favorable currency exchange rates and a rise in tourist spending during the first half of 2024. Conversely, mainland China faced a sharp slowdown, with a significant 18-20 per cent year-on-year decline in luxury spending. This is linked to low consumer confidence and increased overseas shopping as international travel resumed. In fact, the Chinese luxury market's downturn highlights the impact of economic uncertainty and consumer pushback against frequent price increases. Brands are now focusing on footprint consolidation and performance improvement rather than expansion.
Europe and Americas: These regions maintained stability, with Europe benefiting from tourist inflows and the Americas showing improvement as 2024 progressed.
Looking ahead, the personal luxury goods market is forecasted to grow moderately in 2025, with projections ranging between 0 and 4 per cent. This outlook assumes sustained growth in Western countries and the Middle East, a gradual recovery in China gaining momentum in the latter half of the year, and normalization in Japan.
Long-term projections are more optimistic, with expectations of 4 to 6 per cent annual growth leading up to 2030, potentially reaching a market value between €460 billion and €500 billion. This growth is expected to be driven by emerging markets and a growing middle class, introducing over 300 million new consumers to the luxury sector in the next five years.
Shifts in consumer behavior
A notable trend is a decline in luxury consumer base, which has shrunk by approximately 50 million individuals over the past two years. This reduction is particularly evident among GenZ consumers, whose advocacy for luxury brands has reduced. Factors contributing to this shift include economic uncertainty, price sensitivity, and a growing emphasis on sustainability and ethical consumption.
Despite the overall reduction, affluent consumers continue to make up a significant portion of luxury spending. However, there's a growing sentiment among these top-tier customers that their luxury shopping experiences have become less exceptional, prompting brands to reassess and enhance their value propositions.
Claudia D'Arpizio, a partner at Bain & Company and lead author of the report, emphasizes the critical juncture at which the luxury market stands: "Luxury spending has shown remarkable stability this year, despite macroeconomic uncertainty, largely driven by consumers' appetite for luxury experiences." She further notes the imperative for brands to "readjust their value propositions" in response to the evolving consumer landscape.
Thus as the luxury industry transforms it is being influenced by economic factors, shifting consumer preferences, and regional variances. Brands that adapt to these changes by embracing digital innovation, prioritizing sustainability, and enhancing customer experiences are poised to thrive in this evolving landscape. As the market recalibrates, a renewed focus on authenticity, value, and consumer engagement will be paramount in securing future growth.
Forever New, part of Apparel Group, has unveiled its much-anticipated Ramadan collection in Qatar and Kuwait, blending elegance with modest sophistication.
Designed for the Holy Month’s gatherings and celebrations, the collection features chic, flowy silhouettes with intricate embellishments.
Key pieces include the Ebony Embroidered Midi Dress, Kelly Pleated Cape Maxi, and Romie Embellished Pleated Maxi ideal for evening occasions.
The Aisha Embroidered Jacquard Kaftan, Parker Embroidered Palazzo Pant, and Parker Placement Print Top offer versatile styles for both day and night.
Crafted with luxurious fabrics and refined embroidery, the collection captures the spirit of Ramadan while maintaining a contemporary edge.
Whether for an Iftar or Suhoor, Forever New’s latest designs promise sophistication with a modern touch.
Explore the full collection at Forever New stores in Qatar and Kuwait to find the perfect outfit for the festive season.
Forever New, part of Apparel Group, has unveiled its much-anticipated Ramadan collection in Qatar and Kuwait, blending elegance with modest sophistication.
Designed for the Holy Month’s gatherings and celebrations, the collection features chic, flowy silhouettes with intricate embellishments.
Key pieces include the Ebony Embroidered Midi Dress, Kelly Pleated Cape Maxi, and Romie Embellished Pleated Maxi ideal for evening occasions.
The Aisha Embroidered Jacquard Kaftan, Parker Embroidered Palazzo Pant, and Parker Placement Print Top offer versatile styles for both day and night.
Crafted with luxurious fabrics and refined embroidery, the collection captures the spirit of Ramadan while maintaining a contemporary edge.
Whether for an Iftar or Suhoor, Forever New’s latest designs promise sophistication with a modern touch.
Explore the full collection at Forever New stores in Qatar and Kuwait to find the perfect outfit for the festive season.
ACIMIT, the Association of Italian Textile Machinery Manufacturers, has launched The Heritage, a virtual exhibition retracing over a century of Italian textile machinery history. Developed in collaboration with the Italian Trade Agency and supported by Italy’s Ministry of Foreign Affairs and International Cooperation, the website extends the successful exhibition showcased at ITMA 2023 Milan.
The Heritage offers an immersive digital experience, presenting a rich gallery of images contributed by numerous textile machinery companies. It highlights key moments, innovations, and industry leaders who have shaped Italian manufacturing. The website is structured into sections, including Machineries, Entrepreneurs, Factories, World, Companies, Exhibition, and ACIMIT. Visitors can explore historical machinery models, vintage factory images, and scenes from major trade fairs.
ACIMIT President Marco Salvade emphasized the project’s significance, stating, “The Heritage gives voice to the history, values, and technological evolution of Italian textile machinery. It is an evocative journey showcasing how the industry has evolved while maintaining its leadership through innovation and expertise.”
Far from being a static archive, The Heritage is designed as a dynamic platform that will continue growing. Companies are encouraged to contribute new images, ensuring the story of Italy’s textile machinery industry remains alive and evolving.
With nearly 300 companies in the sector, Italy remains a global leader in textile machinery, drawing strength from its legacy while advancing toward the future.
The reverberations of Trump administrations latest tariffs have extended far beyond American borders, casting a long shadow over the Indian textile and apparel industry, a vital cog in the nation’s economic machinery. As a key exporter to the US market, India's textile sector is now passing through a complex maze of trade barriers, grappling with the potential consequences of these new measures.
The evolving tariff landscape
The US administration's decision to implement higher tariffs is rooted in a desire to rectify perceived imbalances in global trade and safeguard domestic industries. This strategy hinges on the concept of reciprocal tariffs, where duties are mirrored to match those imposed by other nations on the US. This approach directly challenges countries like India, where existing tariff structures have long been a source of contention. While the tariff measures span various sectors, textiles and apparel stand out due to the substantial trade volume between India and the US.
A multifaceted challenge for Indian textiles
The ramifications of these tariffs for the Indian textile and apparel industry are far-reaching and multifaceted. The most immediate impact is the cost escalation for Indian exporters. Higher tariffs translate to increased prices for US importers, potentially dampening demand for Indian goods. This, in turn, erodes the competitiveness of Indian textiles and apparel in the US market, as they become less attractive compared to products from countries with more favorable tariff arrangements.
The intricate web of supply chains is also disrupted, forcing Indian manufacturers to explore alternative markets or restructure their operations. Small and medium enterprises (SMEs), which constitute a significant segment of the Indian textile industry, are particularly vulnerable, lacking the resources to absorb increased costs or navigate the intricacies of new trade regulations. While the situation presents hardship, a potential for trade diversion exists. If other large exporters to the US are also heavily taxed then some of the market share may shift to India. However, this is dependent on many fluctuating economic factors. Furthermore, analysis by India Ratings and Research (Ind-Ra) underscores the potential for a significant negative impact on India's GDP growth, highlighting the broader economic implications.
Industry and government initiatives
In response to the US tariffs, the Indian textile and apparel industry, in conjunction with the Indian government, is implementing a range of strategic measures. A key focus is on diplomatic engagement, with the Indian government actively negotiating with the US to mitigate the impact of the tariffs and seeking mutually agreeable solutions to trade concerns. Recognizing the need to diversify markets, Indian exporters are exploring opportunities in Europe, Asia, and other regions to reduce their dependence on the US market. Simultaneously, the industry is also focusing on increasing its competitiveness by improving product quality, efficiency, and sustainability. The government is also providing crucial support through export promotion schemes and infrastructure development initiatives. Industry leaders are advocating for ‘zero-for-zero’ tariffs, a proposal that would eliminate tariffs on apparel exports for both countries.
Adapting to a shifting trade landscape
The long-term repercussions of the US tariffs on the Indian textile and apparel industry remain uncertain. The industry must prepare for a dynamic and evolving trade landscape. The outcome of ongoing trade negotiations between India and the US will be a pivotal factor. The ability of Indian exporters to successfully diversify their markets and enhance their competitiveness will also be critical. The global economic environment will play a significant role in shaping the industry's future. The Indian textile and apparel industry, by adopting a proactive and adaptive approach, can navigate these challenges and secure its position in the global marketplace. The industry must continue to innovate, improve efficiency, and seek new opportunities to ensure its long-term sustainability and growth.
