Global apparel and footwear continues to face an environment shaped by ongoing geopolitical tensions, economic instability, climate change, and rapid technological disruption. As the market becomes increasingly volatile, success hinges on agility and industry players are evolving their strategies to remain relevant.
Fashion is caught in the storm of Trump’s tariffs, trade wars and climate change
The fashion industry is experiencing subdued growth. Geopolitical tensions, climate change and uncertainty around tariffs cloud the global economic outlook, leading to increased consumer discernment and normalised budgeting under persistent cost-of-living pressures. Global apparel and footwear is therefore set to grow at a modest 0.7% CAGR over 2024-2029, with North America, Western Europe and China seeing slow growth.
In this volatile context, a growing number of brands seek to expand in emerging markets such as Brazil, Mexico, Indonesia, India and the Middle East. For example, H&M is opening stores in Southeast Brazil while Primark has announced entry into Kuwait and Dubai.
M&As become highly influential as businesses seek growth and scale
Overall, the industry remains highly fragmented and while M&A activity has slowed down compared to the boom seen since 2021, it remains very influential. High-profile transactions have been completed in 2025, including Prada's acquisition of Versace, 3G Capital's purchase of Skechers, and Gildan Activewear’s acquisition of Hanesbrands.
Distressed brands become targets in a volatile, high-interest-rate market, while on the other hand, market players seek to consolidate their supply chains, increase or diversify their market reach and improve their tech capabilities. As market conditions are likely to remain volatile for the next year at least, more M&A activities can be expected. Larger fashion groups are set to invest in vertical consolidation, while also pursuing diversification and risk mitigation. Moreover, private equity participation is increasing, both in M&As and backed IPOs, as diversification strategies typically perform best in times of crisis.
Tapping into experience-led growth and rewriting the retail playbook
Digitalisation and social commerce have transformed the path to purchase. Social media is now an essential sales channel, with platforms like Instagram Checkout, TikTok Shop, and Instagram and Facebook Marketplace integrating AI-powered tools to enhance personalisation and incentivise online shopping.
Physical stores, however, remain crucial for providing sensory and social experiences that cannot be replicated online. Retailers are investing in immersive, branded environments to build trust, engage consumers, and offer in-person services. This is even more important, since consumers are prioritising experiences over products, with value increasingly defined by wellness, personalisation, and high-touch services rather than price alone.
42% of global consumers mention “see or try before buying” as a top reason for visiting a physical store when buying apparel and footwear
Source: Euromonitor Voice of the Consumer: Lifestyles Survey, fielded January to February 2025 (n=38,560)
Hence, fashion and luxury brands are further integrating their offering into consumers’ lifestyles, opening cafés, wellness spaces and pop-up events to foster deeper connections and loyalty. Examples include Zara’s new Travel Mode app feature for travel shopping, Hoka’s community-focused running clubs in London, and Louis Vuitton’s ship-shaped flagship store in Shanghai.
Adapting to intergenerational shifts to unlock growth
As consumers become more discerning in their spending, players not only need to expand to emerging economies, but also need to find new growth pockets in their more mature markets.
As four generations of consumers (five with those born since early 2025) now overlap and co-exist, fashion players are dealing with a highly diverse demographic portfolio and need to understand intergenerational shifts and cater to the preferences of the various cohorts.
Conclusion
The global fashion industry stands at a crossroads of disruption and opportunity. As growth shifts towards emerging economies, companies need to expand in new markets but also find new pockets of growth in more mature economies by remaining close to consumers of all ages, redefining value through experiences and services, and staying ahead of technological change.
To know more about apparel and footwear business strategies, read our briefings, Competitor Strategies in Apparel and Footwear and Market Volatility: Risks and Opportunities Ahead.
