"Changing behaviour among environmentally conscious and socially aware consumers will put more competitive pressure on global fashion brands to adapt to sustainability measures. Longer term, environmental and social factors will put the apparel industry's profitability at risk," said Guillaume Leglise, assistant vice president – Analyst, at Moody's Investors Service, on the company's website.

Small brands already suffering from the pandemic will struggle to adapt, while large international brands and luxury companies such as H&M, Nike, Adidas and Ralph Lauren will fare better. Fast fashion and discount brands are the most at risk of competitive pressure as sustainability becomes more important to consumers, the Moody's report said.

Regulatory challenges related to data protection are also increasing for apparel companies. Brands using online and data analytics are vulnerable to data protection risks, cyberattacks and non-compliance fines, all of which can tarnish their reputations, the report added.

Fibre2Fashion News Desk (RKS)