LightCastle Editorial Wing
The State of Fashion 2024 by McKinsey & Company
As we look ahead to 2024, uncertainty dominates the outlook for fashion industry leaders. Ongoing economic challenges like subdued growth, persistent inflation, and weak consumer confidence will make it difficult for businesses to find value and unlock new performance drivers.
McKinsey’s analysis of fashion projections predicts that the worldwide industry will have a 2 to 4 percent increase in revenue in 2024. However, there may be variances in growth rates at the regional and national levels. Once again, it is anticipated that the luxury sector would provide the largest portion of economic profit. The difficult economic climate will still provide challenges for businesses, nevertheless. The category is projected to see a worldwide growth rate of 3 to 5 percent, which is lower than the 5 to 7 percent growth rate expected in 2023. This decrease is attributed to consumers reducing their expenditure after a boom in spending that occurred during the epidemic. The economic projection for the US is somewhat more positive than that of Europe or China and is predicted to rise up after a rather sluggish 2023.
Beyond luxury, a 2 to 4 percent increase is anticipated in the next year, consistent with the likely result in 2023. The European market is projected to see a modest growth rate of 1 to 3 percent, which is lower than the 5 percent growth observed in the first half of 2023 and consistent with the 1 to 3 percent growth expected in the second half. Reduced family savings and plummeting consumer confidence are predicted to be the most likely reasons for the curtailed expenditure. A growth rate of 0 to 2 percent is predicted for the nonluxury sector in the United States. In addition, China is anticipated to have comparable difficulties in the face of 4 to 6 percent growth, which is a little improvement from the end of 2023 but sluggish when compared to previous periods.
These findings come from the 2024 edition of The State of Fashion report by The Business of Fashion and McKinsey. The eighth annual report discusses major fashion economy themes and potential industry responses. It reveals the key trends that may shape fashion in 2024, based on extensive research and conversations with industry leaders.
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This report was originally published by McKinsey & Company.