What: The fashion industry is expected to face a challenging 2025, marked by economic uncertainty, shifting consumer behaviours, and the need for brands to adapt to ongoing global changes.

Why it is important: As the industry grapples with sluggish growth, geopolitical instability, and evolving consumer priorities, brands that can pivot quickly, especially in areas like sustainability, supply chains, and customer engagement, will be better positioned to succeed.

The "State of Fashion 2025" report by Business of Fashion and McKinsey highlights the turbulent path ahead for the fashion industry. Economic uncertainty, geopolitical instability, and changing consumer preferences are expected to create significant challenges. Growth will remain sluggish, with non-luxury segments driving economic profit for the first time in years. Key trends include the rise of AI-powered product discovery, a focus on older consumers (the "Silver Generation"), and a shift towards value-driven shopping behaviours. Brands must also navigate disruptions in global trade, particularly in Asia, where markets like India and Japan are emerging as new growth engines. Sustainability remains a critical issue, though consumer reluctance to pay more for eco-friendly products complicates efforts. The report underscores the need for agile supply chains and improved inventory management to meet both regulatory demands and consumer expectations. Ultimately, brands that can innovate and differentiate themselves will be best positioned to thrive amidst these challenges.

BoF and McKinsey unveil fashion’s 2025 roadmap