;
Home / Knowledge / News / Fashion / Fashion sector growth to slow down by 4.5% in 2019: Report

Fashion sector growth to slow down by 4.5% in 2019: Report

30
Nov '18
Source: McKinsey Global Fashion Index, based on data from Corporate Performance Analysis by McKinsey
Source: McKinsey Global Fashion Index, based on data from Corporate Performance Analysis by McKinsey
The growth of the fashion industry is expected to slow down to 3.5 to 4.5 per cent in 2019, slightly below 2018 figures, according to a recent report. It further adds that Greater China will for the first time in centuries overtake the US as the world’s largest fashion market, while external shocks to the system continue to lurk around the corner.

The State of Fashion 2019, a new report co-published by The Business of Fashion (BoF) and McKinsey & Company, says that 2019 will be a year of awakening for the fashion industry, one that will go down in history.

The majority of executives across different segments and geographies remain pessimistic, citing ‘dealing with volatility, uncertainty and shifts in the global economy’ as their primary concerns for the year ahead. Risks of trade disruptions and slowing economic growth, even in key growth markets in Asia, could undermine global market growth prospects, as could uncertainty over other major events, such as the Brexit or the possible onset of a global economic slowdown.

“Optimism can be found in pockets, notably in North America and in the luxury segment, aided by their strong performance in 2018,” says Imran Amed, founder and editor-in-chief of BoF. “But they cannot rest on their laurels as the market continues to be characterised by radical shifts in the global economy, consumer behaviour and the fashion system itself.”

“Looking at segments, only value and luxury will perform very well in 2019 growing by 5.0 to 6.0 and 4.5 to 5.5 per cent. Value will be primarily driven by competitors having very strong propositions that edge out the mid-market players. Luxury, on the other hand, will be fuelled by fast-growing Asia-Pacific economies and the continuing boom in global travel,” says Achim Berg, senior partner and expert on the fashion and luxury industry at McKinsey.

The report recognises the rise of ‘super winners’, the top 20 publicly listed companies that are increasingly dominating the industry in terms of value creation. This group includes brands such as Nike, LVMH and Inditex, and it now accounts for around $25 billion of economic profit, which is 97 per cent of total industry value created, compared to 70 per cent in 2010. Over time, North American department stores have lost traction amongst this cohort, with none remaining in the top 20, compared to three 10 years ago. The report notes that online retailers have yet to break into this elite group with none represented in the top 20 at all.

Fashion companies have to wake up not only to the tougher economic environment, but also to changing consumer trends and shifts in the fashion system. Created by a team of experts, a survey of almost 300 fashion executives and extensive interviews, The State of Fashion 2019 identifies 10 trends that will have a major impact on the fashion industry in the coming year, namely, ‘Caution ahead’, ‘Indian ascent’, ‘Trade 2.0’, ‘End of ownership’, ‘Being woken up’, ‘Now or never’, ‘Radical transparency’, ‘Self-disruption’, ‘Digital land-grab’ and ‘On-demand’.

The State of Fashion 2019 marks the third year of an ongoing partnership between The Business of Fashion and McKinsey & Company. The research conducted by a team of global experts, establishes a common understanding of the forces at work in fashion; sets out how well the industry is performing; and identifies the top priorities, both business and creative, for 2019. (KD)

Fibre2Fashion News Desk – India


Must ReadView All

NCTO endorses USMCA; to lobby Congress to adopt agreement

Textiles | On 13th Dec 2018

NCTO endorses USMCA; to lobby Congress to adopt agreement

The National Council of Textile Organisations (NCTO) board of...

12 Asian garment firms to operate in Haiti by mid-2019

Apparel/Garments | On 13th Dec 2018

12 Asian garment firms to operate in Haiti by mid-2019

At least a dozen Asian garment manufacturing companies will start...

Pakistan evolving export-oriented policies: top official

Textiles | On 13th Dec 2018

Pakistan evolving export-oriented policies: top official

Pakistan is evolving export-oriented policies and is committed to...

Interviews View All

Yash Agarwal, Hitansh Online

Yash Agarwal
Hitansh Online

Every market region has its own culture and trends

Cyril Pereira, Reed Exhibitions India, organiser of Asian Machine Tool Exhibition 2016

Cyril Pereira
Reed Exhibitions India, organiser of Asian Machine Tool Exhibition 2016

'Major problem in the textile machinery manufacturing industry is the lack ...

Amardeep Singh, Orient Craft

Amardeep Singh
Orient Craft

'In export markets, the trend in terms of embroidery, is towards matte...

Sandip Bhojani, Manthan Patel,

Sandip Bhojani, Manthan Patel

Krypthm Tradelink LLP is a Surat-based manufacturer of westernwear....

Sham Shah,

Sham Shah

Shamal and Shamal Pvt Ltd is into manufacturing and sales of textile...

Riddhi Jain,

Riddhi Jain

Conceived in Europe and curated in New Delhi, NeceSera is a...

Matthew Kolmes, Supreme Corporation

Matthew Kolmes
Supreme Corporation

Supreme Corporation manufactures innovative specialty yarns and safety...

Ayyappa Nagubandi, Broadcast Wearables Pvt Ltd

Ayyappa Nagubandi
Broadcast Wearables Pvt Ltd

Hyderabad-based Broadcast Wearables has come up with the country's first...

Iago Castro Asensio, RCfil Distribuciones S.L.

Iago Castro Asensio
RCfil Distribuciones S.L.

Iago Castro Asensio, International Business Manager of RCfil...

Prathyusha Garimella, Prathyusha Garimella

Prathyusha Garimella
Prathyusha Garimella

Hyderabad-based designer <b>Prathyusha Garimella</b> is known for blending ...

Jay Ramrakhiani, Occasions Elegance Wear

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Varsha Wadhwa, VW

Varsha Wadhwa
VW

Coming from a family that ran a business of jute and linen mills since...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


December 2018

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search