by As the dust from Black Friday settles and shoppers grab Cyber Monday bargains, fashion players will dig into their latest sales reports for clues about where consumer spending is headed. In the coming months. But given the unpredictability and fragility in which the industry operates, many will refrain from drawing definitive conclusions.
It is unclear whether the first figures for holiday shopping along with the release this week of consumer confidence indicators on both sides of the Atlantic will restore the cautious optimism that many felt at the start of the year. At the time, the fashion industry was getting back on its feet after nearly two years of pandemic disruption. The state of fashion 2022 from Business of Fashion and McKinsey & Company, found that some brands were already outperforming their pre-Covid performance, benefiting from a surge in pent-up consumer demand that was expected to continue. But the war in Ukraine, the cost of living crisis and lingering supply chain headaches have all contributed to eroding optimism in 2022.
Next year will likely be a continuation of what the fashion industry faced in the second half of 2022. “Difficult” and “unpredictable” were the most frequently used words by executives interviewed for our latest The fashion state report, which will be unveiled at BoF VOICES this week, when they were asked to describe the conditions under which their businesses will operate over the coming year.
Knowing now how fragile recoveries can be, any glimmer of hope may be fleeting, given the range of challenges economies continue to face. “Winter this year has only just begun, and a few warm weeks in November do not automatically make for a warm season,” Carsten Brzski, chief economist at ING Germany, warned last Thursday in the monthly climate survey. sentiment of executives in retail and other sectors. , the Ifo business climate index, posted a strong month-on-month rebound in November. “Today’s Ifo index gives hope for some stabilization, nothing more, nothing less.”
On Tuesday we will have a few more indicators that will make the picture clearer. More broadly, including those of the European Commission. Last week, however, the Commission played down its preliminary early estimates that suggested a month-on-month recovery in consumer sentiment across the EU, noting that confidence levels are still “well below its average at long term”. In the United States, where consumer confidence fell in October after two consecutive months of gains, November figures released this week could indicate whether the Federal Reserve will begin to ease interest rate hikes aimed at controlling inflation. .
For months, rising prices have cast a shadow over the fashion industry, severely affecting consumer behavior, especially among low-income shoppers when it comes to spending on discretionary items, such as clothing. and shoes. “The rising cost of living has long been one of the most feared phenomena in Western countries, and now that this fear has been realized, the inflation index has attracted a lot of attention,” wrote Alberto Prati, professor of economics at the London School of Economics, in a recent blog. “In 2022, Europe, the UK and other regions that have not seen major inflationary periods for four decades, saw record highs of inflation.” And let’s face it, he added, “inflation makes people miserable.”
This is a point that does not escape fashion executives. Inflation is a top concern for executives surveyed over the coming year, according to the seventh annual The state of fashion. The report, which will be launched this week on the second day of BoF VOICES 2022, BoF’s annual gathering for leading industry thinkers, cites unabated high inflation among multiple factors contributing to the expected industry slowdown in 2023. As in previous editions, The state of fashion 2023 highlights how the industry can – and in some cases already does – respond and adapt to turbulent conditions, while identifying where brands can seize opportunities.
You can learn more about The state of fashion 2023 at BoF VOICES 2022. Over five two-hour sessions over a three-day event starting this Tuesday, we unite global fashion industry players with thought leaders and inspirational people shaping the world whole, including Demna.
Register now to join us for the entirety of BoF VOICES or the sessions of your choice, for free.
BoF VOICES 2022 is made possible in part thanks to our partners McKinsey & Company, Shopify, Flannels, Brandlive, Lenzing, ShopRunner, Instantaneous, Canada Goose, Unseen Collection, Soho Houseand Getty Images.
What else to watch this week
Monday
Cyber Monday
Japanese unemployment, retail sales
Tuesday
The Conference Board’s monthly survey of US consumer confidence
Monthly business and consumer sentiment in the EU
Broadway premiere of “The Collaboration”, a play about the artistic relationship between Andy Warhol and Jean-Michel Basquiat in 1984, following its world premiere in London in February
BoF VOICES 2022: CNN Clarissa district talks about the Ukrainian war
Wednesday
Victoria’s Secret, PVH Third Quarter Results
Annual consumption inflation in the euro area
Publication of the second part of the European Commission’s circular economy package, whose proposals include a new law requiring companies to substantiate their green claims
India Quarterly GDP (Q2)
BoF VOICES 2022: Fear of God jerry lorenzo talks about building a broadcast line strategy
Thursday
Ulta Beauty Earnings
Farfetch Investor Day
The launch of Art Basel Miami, which runs until December 3; Pantone unveils its color of the year at the event
BoF VOICES 2022: winner of the Nobel Peace Prize Malala Yousafzai talk about activism
Friday
US unemployment figures for November
BoF VOICES 2022 is made possible in part thanks to our partners McKinsey & Company, Shopify, Flannels, Brandlive, Lenzing, ShopRunner, Instantaneous, Canada Goose, Unseen Collection, Soho Houseand Getty Images.
The week ahead wants to hear from you! Send advice, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.
