In 2023, luxury will remain an exception to the prevailing pessimism

While the global fashion industry is expecting a significant slowdown in growth in 2023, luxury is expected to remain resilient, helped by a particularly strong market in the Middle East and the US.

The BoF-McKensey survey "The state of Fashion 2023" on the fashion industry in 2023 confirms this: 84% of fashion executives said they expect market conditions to decrease or remain the same in 2023 (-4% to +1% of sales in Europe and +1% to +6% in the US). This is due to inflation, rising central bank interest rates and the war in Ukraine. But their effects will not be measured with the same intensity in different regions of the world and in different sectors. And once again, the luxury segment is expected to show resilience in the coming months. Luxury fashion sales are expected to grow by an average of 5% to 10% in 2023, according to McKinsey Fashion's growth forecast. The increase is expected to be 3% to 8% in Europe, 5% to 10% in the US and 9% to 14% in China.

Overall, across all fashion segments, to protect margins, nearly three-quarters of executives said they plan to increase product prices. Of the respondents, 10% plan to increase prices by more than 10%. Other measures with a greater impact on suppliers will also be taken by 60% of them: that of optimising or renegotiating supply agreements.

As for the regions that will represent the strongest growth potential, the Middle East comes out on top with 88% of fashion executives believing that this market will represent the strongest growth, followed by North America with 78% of opinions.

Luxury will continue to appeal to consumers around the world in 2023, provided the right strategies are implemented. It is interesting to note that sustainability is the topic that executives see as having the greatest potential. The contradiction remains: how to combine sales growth and sustainability....The model has yet to be invented.