The US apparel sector has entered 2025 on a surprisingly high note as despite a persistent 3.1 per cent annual inflation rate and significant tariff-driven price hikes—including an 8 per cent increase in women’s apparel—shoppers are refusing to pull back. Data from the US Department of Commerce reveals, apparel sales rose nearly every month through late 2024, with Q3 results from giants like Gap Inc and Abercrombie & Fitch shattering analyst expectations.
The secret weapon for thriving brands appears to be high-impact celebrity partnerships that convert ‘digital noise; into store traffic. American Eagle Outfitters reported a record-setting Thanksgiving weekend following denim campaigns featuring Sydney Sweeney and Travis Kelce, which generated over 44 billion impressions. Meanwhile, Gap Inc saw its net sales rise 3 per cent to $3.9 billion in Q3, buoyed by its ‘Better in Denim’ campaign.
The industry faces a stark divide between ‘winners’ and ‘laggards.; While Old Navy and Alo Yoga saw double-digit growth in brand mentions, legacy players like The North Face and Vans saw declines of 20 per cent or more. Retailers are now ‘holding the line’ on prices, with fewer holiday promotions than in previous years to protect margins. As Maurizio Catellani, CEO, Competitoor noted, businesses are prioritizing financial health over volume, navigating a landscape where handbags and denim are fetching significantly higher price points than a year ago.
As one of the world's largest specialty apparel retailers, Gap Inc. is currently executing a high-stakes ‘reinvigorated playbook ‘under Richard Dickson, CEO. The company operates a diverse brand portfolio including Old Navy, Gap, Banana Republic, and Athleta, spanning casual wear to luxury-adjacent apparel.
