Bof & Mckinsey – The State of Fashion, 2024

The fashion industry has shown resilience in recent years, experiencing high levels of economic profit in 2022. However, by 2023, the industry faced persistent and deepening challenges, with slow growth in Europe and the US, and deceleration in China. Even the luxury sector began to struggle with slowing sales and uneven performance. Looking ahead to 2024, fashion leaders anticipate further difficulties and are uncertain about the prospects for the year. Consumer confidence is expected to remain fragile in key markets such as the US, Europe, and China. The industry is predicted to achieve retail sales growth of 2 to 4 percent in 2024. In addition to economic challenges, the fashion industry is facing pressure to address the climate crisis. After extreme weather events in 2023, leading companies are likely to prioritize building resilience to climate impacts in 2024. Inaction could endanger the lives and livelihoods of fashion workers and jeopardize $65 billion of apparel exports by 2030. To prepare for the future, fashion companies should focus on growing sales through new pricing and promotion strategies, rather than volume increases. The industry expects to see a decrease in cost pressures, with fewer executives expecting significant increases in expenses. Supply chains may experience volatility and challenges due to fluctuations in demand, leading to underutilization of factories, layoffs, and delayed infrastructure investments. Transparent supply chains could help fashion brands navigate these challenges.