What the Latest Fashion Outlook Reveals
In its 2025 State of Fashion report, BoF (Business of Fashion) in partnership with McKinsey & Company outlines a challenging year ahead for the global fashion industry. Amid economic headwinds, shifting customer values, and rising geopolitical uncertainty, fashion leaders are bracing for major disruption.
Fashion’s Backdrop: Why 2025 Feels Like a Turning Point
Coming out of a period of rapid growth, fashion now faces “a long-feared cyclical slowdown,” according to BoF and McKinsey.
With consumer spending under pressure and trade dynamics shifting, brands must balance cost, creativity, and growth better than ever.
Key Themes Shaping Fashion in 2025
The report identifies 10 major trends that are likely to reshape the fashion landscape:
- Trade Reconfigured: Brands are diversifying sourcing amid political risk and supply chain disruption.
- New Asia Growth Engines: As China slows, India and Japan are emerging as faster-growing markets.
- Discovery Reinvented: AI-driven curation will transform how customers find and engage with fashion.
- Silver Spenders: Consumers over 50 often overlooked are becoming a key growth segment.
- Value Shift: Economic pressures are pushing shoppers toward resale, dupes and off-price options.
- Retail Humanisation: In-store experience and customer-associate interaction will matter more as brands try to retain shoppers.
- Marketplace Disruption: Non-luxury online marketplaces may need to redefine their role as their business models come under strain.
- Sportswear Battle Intensifies: Challenger brands are expected to grab more share, making competition fiercer.
- Inventory Excellence: Brands will lean into agile supply chains and tech tools to better manage stock and cut losses.
- Sustainability Collective: Environmental goals remain important, but brands must move beyond promises to scalable systemic action.
Insight From Fashion Executives
Many industry leaders, as cited by BoF and McKinsey, are cautious. Seventy-plus percent of executives reportedly prioritized volume growth over cost cutting signaling faith in demand bounce-backs.
At the same time, sustainability is losing its “top risk” status among executives, slipping behind trade, inventory, and consumer value concerns.
Why This Report Matters
- Strategic Realignment: Brands will need to rethink sourcing, product mix, and pricing to remain resilient.
- Consumer Behavior: As shoppers grow more value-conscious, the resale and “dupe” market could become central to brand strategies.
- Growth Opportunities: Older demographics, especially the “Silver Spenders,” may offer untapped potential.
- Tech Transformation: AI isn’t just for design it’s reshaping discovery, inventory, and even workforce roles.
What’s Next for Fashion in 2025 and Beyond
- Fashion companies will likely double down on AI adoption not just in design but across business functions.
- Brands may accelerate local sourcing or “near-shoring” to reduce risk and cost.
- Expect more resale and value-driven product lines, as brands capture consumers looking for affordability without sacrificing quality.
- Investment in inventory and supply chain technology could become a priority as fashion firms aim to avoid overstocking or stockouts.
Conclusion
The State of Fashion 2025 report by BoF and McKinsey doesn’t sugarcoat it: the fashion industry is entering a phase of reckoning. But within disruption lie opportunities. Brands that can navigate shifting trade winds, deliver value, and harness AI to connect with shoppers may not just survive they may thrive in this new era.
