Q2 2025 apparel industry review: technology investments and strategic recalibration amid tariffs
The second quarter of 2025 saw the global fashion industry contending with the direct fallout from sweeping US trade tariffs, a development that dominated strategic planning and financial performance. Following the initial shock of President Trump's "Liberation Day" tariff announcements in April, the sector entered a period of intense recalibration, marked by a stark polarisation between struggling mid-market players and consolidating giants, all while navigating a cautious consumer landscape.
Amid rising inflation and economic uncertainty, consumer behaviour became increasingly value-driven. While the luxury sector experienced a notable slowdown, with giants like LVMH and Kering reporting revenue declines due to softer demand in key markets, more accessible brands such as Inditex and Uniqlo parent Fast Retailing posted record, albeit moderating, annual growth. This price sensitivity contributed to a challenging environment for mid-market retailers, leading to a string of high-profile insolvencies.
The turbulent climate also catalysed significant M&A activity as stronger players moved to consolidate their market positions. The quarter was highlighted by Prada Group’s 1.25 billion euro acquisition of Versace and Mytheresa’s completed takeover of Yoox Net-a-Porter, creating a new digital luxury powerhouse. Brand management firm Authentic Brands Group also continued its expansion, acquiring the Dockers brand from Levi Strauss & Co.
Despite the headwinds, strategic investment in technology and sustainability remained a priority. Companies channelled capital into AI-powered solutions for supply chain management, design, and retail media networks. Simultaneously, partnerships aimed at scaling circularity, such as Mango’s collaboration with Circulose, underscored the industry’s long-term commitment to a more sustainable future. As the sector moves into the second half of the year, agility, a clear value proposition, and strategic investment in digital infrastructure appear to be the key determinants of resilience in an unpredictable market.
The chapters per subject in Q2 2025:
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