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THE FASHION MARKET: THE DOWNFALL OF THE GIANTS? A COMPARATIVE ANALYSIS BETWEEN 2022 AND 2024

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A dynamic sector

The fashion sector is, by definition, characterized by the greatest dynamism and has been changing for years, constantly oscillating between exponential growth and more cautious downsizing. Its particular “elastic” trend emerged from the latest report by Mediobanca Research Area, published on February 1, 2024, where the institute provided a detailed analysis of current trends and future forecasts, highlighting how, after a record-breaking 2022 and a moderately growing 2023, 2024 appears to be a year of slowdown and consolidation.

2022: The year of records

In 2022, the 80 largest fashion multinational companies recorded extraordinary results, with a total turnover of €566 billion, marking an overall increase of 11.7% compared to 2021 and 21.6% compared to pre-pandemic levels. This significant increase compared to previous years highlighted how the sector managed to quickly recover from the numerous challenges related to the pandemic. It is noteworthy that these results – as indicated by the report – are largely attributable to European companies, with Italy seeing 12 of its main players among the protagonists.

It is also true that the turnover leadership went to France (43% of the total European turnover), followed by Germany (11%), Spain and the United Kingdom (both 10%), with Italy accounting for only 7% of the total European turnover.

Revenue leadership went to sector giants such as LVMH, Nike, and Inditex, confirming how large multinationals – compared to small brands – stand out for strength, resilience, and adaptability to market changes.

Consider that LVMH alone totaled €79.2 billion in revenue, followed by Nike (€48.0 billion), Inditex, which controls Zara among others (€32.6 billion), EssilorLuxottica (€24.5 billion), Adidas (€22.5 billion), Kering (€20.4 billion, including €10.5 billion from Gucci, €3.3 billion from Yves Saint Laurent, €1.7 billion from Bottega Veneta), H&M (€20.1 billion), the Swiss group Richemont (€20.0 billion), the Japanese Fast Retailing which controls Uniqlo (€16.4 billion), and Chanel (€16.1 billion).

Prada was the top-ranked Italian company at 33rd place with €4.2 billion in revenue, followed by Oniverse (44th position), Moncler (50th), and Giorgio Armani (54th).

2023: A more subdued growth except for luxury brands

In 2023, the world’s leading fashion players recorded an 8% increase in turnover in the first nine months, with a 7% growth over the previous year, thus at a slower pace compared to 2022.

Geographically, the Asian fashion market showed the highest growth (+9%), followed closely by Europe (+8%) and North America, declining after being the brightest area in 2022.

It is interesting to note that the groups holding so-called “luxury brands” recorded a revenue increase of +9%, practically driving the entire sector.

The growth of “Made in Italy” fashion (still +6% compared to 2022) was mainly driven by exports and foreign sales, with the Asian market being more dynamic and Europe benefiting from tourists.

2024: The year of consolidation

After past glories, 2024 sees a significant slowdown in growth, with forecasts until January indicating a round figure of 4%.

This growth, although more modest compared to previous years, can be explained by several strategic factors:

a) Firstly, the increase in price lists – already implemented during 2023 – is positively contributing to revenues. This price adjustment is a response to inflationary pressures and rising raw material costs, as well as a strategy to maintain stable profit margins.

b) Secondly, the acceleration of tourist flows continues to play a crucial role. With the improvement in the pandemic situation and the resumption of international tourism, a significant increase in demand for luxury goods by tourists is expected, especially in European and Asian markets.

c) Finally, the strengthening of the supply chain and the consolidation of the industry’s value chain by fashion multinationals. Investments in advanced technologies and sustainable practices remain priorities, with particular attention to reducing environmental impact and operational efficiency. These investments are not only improving the resilience of the supply chain but are also meeting the growing demand from consumers for sustainable and high-quality products.

A look at the near future: sustainability and product ethics

In summary, although 2024 marks a slowdown in growth, the fashion sector remains strong, ready to face new challenges and seize new opportunities, confirming that fashion giants are far from falling but rather in a phase of transformation and consolidation.

According to estimates from the Bain & Company Luxury Study, the personal luxury goods industry could reach a volume of €360-380 billion by 2025, marking sustained annual growth of 6-8%.

It is also true that this growth will be accompanied by an increasing focus on product sustainability and ethics, topics that have become particularly important among Gen Y and Gen Z.

This “green” trend has been well understood by major brands such as Stella McCartney (which since 2023 claims to produce “ecologically” over 80% of its garments), Gucci (actively involved since February 2023 in launching the first circular luxury hub in Italy, aiming to maximize the use of recycled materials, durability, repairability, and recyclability of end-of-life products), Burberry, Prada (both awarded in 2023 with the Corporate Standard Ethics Rating (SER) “EE” certifying their commitment to green initiatives) and, among them all, Brunello Cucinelli (always committed to balancing artisanal product quality, sustainability, and ethical production processes).

The green wave will therefore be a ubiquitous theme in the business strategies of fashion “giants,” perhaps becoming more aware of their real social impact in the shadow of an economic and environmental crisis that has imposed further and more rapid evolution on the market.

In short, the giants have fallen and risen in these three years.

If not with new awareness, at least with excellent intentions for the years to come.

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