06 December 2023, Mumbai
McKinsey report warns of a tough year ahead, with leaders needing to find new sources of growth
McKinsey's "State of Fashion" paints a sobering picture for 2024. The sluggish economy and weak consumer confidence are creating a "new normal" where leaders must find "pockets of value" and "new performance drives.
2023's struggles set the stage
2023 was a rollercoaster. China's initial promise faded into a sharp slowdown, while the US and Europe remained slow markets. Now, everyone's bracing for a potential "bullwhip effect" in supply chains, where recent demand swings cause instability, factory underuse, and workforce cuts.
Resilience and adaptability are key
The industry needs to be tough and flexible to weather these storms. Creating value and pursuing new growth engines will be crucial. Understanding the complex, interconnected global market is also essential.
Luxury slows down but remains profitable
Luxury, the main profit driver, is expected to grow at a slower rate of 3-5% in 2024, down from 5-7% in 2023. The post-pandemic luxury boom is cooling, even in the US, the global leader, which is projected to have a modest 2-4% growth.
Fashion executives are cautiously optimistic
While cautious, fashion leaders see opportunities. They're exploring areas like sustainability, digitalization, and regional growth to navigate the uncertain waters ahead.
Stay tuned for more on the evolving fashion landscape
This is just the beginning. We'll keep you updated on how the industry adapts and innovates in the face of 2024's challenges.