Data Source: McKinsey Global Fashion Index, ‘Top 20 players 2017’ Data Source: Statista, official websites of brands, Number of apparel stores in China by brand As we can see, mass market and such sportswear and activewear brands as Adidas and Nike lead in terms of number of stores in China. With value creation always our primary goal, we tailor the integration approach and pace to each client’s unique needs, assessing and aligning organizational compatibility to minimize any potential pain points along the way. This was driven by a particularly strong upswing in revenue growth for publicly listed companies, resulting in improvements in capital efficiency as invested capital grew at a slower pace than revenues. Investors recognized this strong performance, driving share valuations to an all-time high. Source: McKinsey Global Fashion Index (MGFI); expert estimations; McKinsey & Company Consumer Pulse. Our global team of experts includes former product, merchandising, sales, and supply-chain managers from renowned apparel, fashion, and luxury companies. TRENDING ON BoF. Prospects for affordable luxury are likely to be more fragmented, with some regions expecting above-average growth (e.g., emerging and mature Europe and China), while others such as Japan, Latin America and North America underperform. The combination of today’s volatility, changing growth areas, and new technologies disrupting the global economy have given way to a more connected and discernible global fashion consumer than. Digital upends old models. Copyright; 2020 Textile Focus. 1. Long-term leaders include, among others, Nike, LVMH and Inditex, which have more than doubled their economic profit over the past ten years — according to MGFI estimates each racked up more than $2 billion in economic profit in 2017. In fact, 2017 signals the end of an era. For many in the fashion industry, the glass is half empty. But we are now detecting glimmers of hope: executives report optimism (even amid uncertainty), and the McKinsey Global Fashion Index forecasts industry sales growth to nearly triple between 2016 and 2018, from 1.5 percent to between 3.5 and 4.5 percent. The latest reading of the McKinsey Global Fashion Index (MGFI), meanwhile, reveals new insights into fashion-company performance by category, segment, and region. For many in the fashion industry, the glass is half empty. These companies own some of the biggest and best-known brands in the business. According to the report, the global fashion market is dominated by 20 companies which account for 97 per cent of global economic profit in the retail sector. The report includes the third readout of our industry benchmark, the McKinsey Global Fashion Index. Which fashion brands and retailers are the most shopped and visited and which attract the most positive sentiment among their customers? McKinsey Global Fashion Index. Over time North American department stores lost out, with none remaining in the top 20, compared with three 10 years ago — a stark illustration of the fragility of the traditional retailing model. The McKinsey Global Fashion Index (MGFI) forecasts that global fashion industry growth will slow further — down to 3 to 4 percent — slightly below predicted growth for 2019. It is a fascinating list; it’s also a diverse list—lots of different types of companies in there. Our pioneering expertise and global network enable our Apparel, Fashion & Luxury clients to drive change and flourish in a fast-moving and unpredictable industry. Combined with the McKinsey Global Fashion Index (MGFI) analysis, which found that 56% of global fashion companies were not earning their cost of capital in 2018, we expect a large number of global fashion companies to go bankrupt in the next 12 to 18 months. cookies. So what unites them? Our pricing approach is grounded in both our extensive apparel experience along with our application of repeatable analytics. Together, we publish the annual State of Fashion report that offers an in-depth look at the leading global trends for the coming year, provides an update on industry sentiment based on the BoF–McKinsey Global Fashion Survey, and contains the McKinsey Global Fashion Index—a metric that estimates industry sales and tracks operating profit and economic-value creation. We help clients in end-to-end transformations to build out segmented supply-chain capabilities. Sorry, we couldn't find any results. But it’s not as if shopping halted altogether. But the rebound is not being felt evenly across the globe. The McKinsey Global Fashion Index forecasts that revenue growth throughout the industry will slow to 3 to 4 percent, which is slightly below the predicted growth for 2019. Outstanding performers included handbag and luggage makers and own-brand multi-category players. Combined with the McKinsey Global Fashion Index (MGFI) analysis, which found that 56 percent of global fashion companies were not earning their cost of capital in 2018, McKinsey expects a large number of global fashion companies to go bankrupt in the next 12 to 18 months. Your information will *never* be shared or sold to a 3rd party. while also planning for postcrisis realities. The West will no longer be the global stronghold for fashion sales. Announces Senior Leadership... TRANSFORM traditionally managed companies to... Distinguishing factors between traditionally managed... Face shields for COVID-19 infection control. What are they doing right? ever before. Business of Fashion has teamed up with McKinsey Global Fashion Index (MGFI) on The State of Fashion 2020, a report predicting industry challenges in the coming year. Transparency does not equal sustainability. To coincide with VOICES 2019, BoF and McKinsey will release The State of Fashion 2020, the fourth edition of an annual in-depth report providing a comprehensive business outlook for the fashion industry in the year ahead. Jewelry and watches, on the other hand, may struggle in many markets as rental models start to replace traditional sales. Postmerger, we help clients identify and tap into the right synergies, build capabilities, shape new corporate cultures, and streamline integrations. In 2019, the predicted overall fashion industry’s growth was between 3.5% and 4.5%, according to the McKinsey Global Fashion Index. Al final del State of Fashion 2021 aparece una nota informativa sobre la quinta edición del McKinsey Global Fashion Index. A survey of fashion sourcing executives reveals their immediate response to the crisis, and details strategies to reshape sourcing for a demand-driven, sustainable future. Combined with the McKinsey Global Fashion Index (MGFI) analysis, which found that 56 percent of global fashion companies were not earning their cost of capital in 2018, we expect a large number of global fashion companies to go bankrupt in the next 12 to 18 months. McKinsey Global Fashion Index (MGFI) forecasts growth of 3.5 to 4.5 percent for 2019, slightly below 2018 growth, predicted at 4 to 5 percent. In 2019, the predicted overall fashion industry’s growth was between 3.5% and 4.5%, according to the McKinsey Global Fashion Index. Reinvent your business. Laut Prognose des McKinsey Global Fashion Index (MGFI) wird das Umsatzwachstum in der Modebranche 2020 weiter zurückgehen auf 3 bis 4% und damit leicht unter die Prognosen für 2019 fallen. Companies able to differentiate on price point/efficiency or brand have performed best. tab. We expect margins in aggregate to remain steady through 2019, despite caution among industry players. 89 How a Group of High Performers Drive Value Creation in the Industry The McKinsey Global Fashion Index gives a birds-eye view of the fashion industry, uniquely tracking financial development and value creation through economic profit. The mood among respondents to our executive survey is sober across geographies and price points, and the pockets of optimism seen last year in … To do this, we tap into our network of global sourcing centers, We begin by setting the right strategy in place, targeting sources of commercial and operational value as well as nonfinancial drivers that serve as indicators of future performance. We use a multiphased approach—from diagnosis to implementation—to help clients make their sourcing decisions, increase end-to-end productivity of value chains, build strategic supplier partnerships, and integrate sustainability into their practices. The majority of executives in the remaining McKinsey Global Fashion Index In this edition of the McKinsey Global Fashion Index, we deepen our exploration of economic profit — a measure of value creation that looks at a company’s profit less its cost of capital, thus taking into account how much each company invested to generate its performance. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. A darkening mood. COVID-19 has sent shockwaves through the fashion industry’s global sourcing and production operations. Advises apparel and retail companies as they set new strategies and pursue large-scale transformations for profitability and growth, Leads our apparel, fashion, and luxury work in EMEA, with deep expertise in multichannel and digital transformation. The report speculates that to be successful in the new year, apparel retailers need to think ‘outside-the-clothes’ and create an online persona that is AI-driven and socially relevant. Handbags and luggage are also likely to see strong growth, reflecting a global tourism boom that shows no sign of slowing. Just as China … This database of more than 500 companies allows us to analyze and compare the performance of individual companies with their peers, by category, segment, or region. So, what’s fuelling the fast fashion boom? Developed by Marketo Services, Our intelligent team curate fresh news & updates to entertain our valued audience. On the other hand, there are several levers players are using to improve profitability, including efficiency drives, use of analytics to relieve markdown pressure and automation enabling faster speed to market. Please click "Accept" to help us improve its usefulness with additional cookies. In past editions of this report that fashion is a winner-takes-all industry. This is a global phenomenon that can be observed across industry sectors (beyond fashion), regions and cities, as outlined in McKinsey Global Institute’s recent “Superstars” study. A darkening mood. How did Anta and HLA do it? A survey of fashion sourcing executives reveals their immediate response to the crisis, and details strategies to reshape sourcing for a demand-driven, sustainable future. En ella informa sobre las inversiones y la creación de valor de las empresas, las pérdidas ocasionadas por el Covid-19 y la evaluación de sus cotizaciones en Bolsa. These are the facilities that do the cutting, sewing and finishing of garments in the final stages of production. The interconnectedness of the industry is making it harder for businesses to plan ahead. People create and sustain change. These are the facilities that do the cutting, sewing and finishing of garments in the final stages of production. Through BoF’s of Fashion and McKinsey & Company have teamed extensive expertise in fashion strengthened by up to bring our trademark rigour and evidence to global industry networks, we thread McKinsey’s debates within the global fashion industry and international perspective and analytical rigour. What levels of discounting will be required to get rid of this overstock? Sunny intervals but storms ahead . Business of Fashion has teamed up with McKinsey Global Fashion Index (MGFI) on The State of Fashion 2020, a report predicting industry challenges in the coming year. Over that period, the industry has grown at 5.5 percent annually, according to the McKinsey Global Fashion Index, to now be worth an estimated $2.4 trillion. Our mission is to help leaders in multiple sectors develop a deeper understanding of the global economy. For fashion players, 2019 will be a year of awakening. Please click "Accept" to help us improve its usefulness with additional cookies. Continuing the trend of recent years, players in emerging Asia Pacific and emerging Europe will lead the way; however, emerging Asia Pacific is likely to continue its strong performance in 2019, while emerging Europe will probably slow slightly from 2018. Four years in, this is growing to become an unrivalled resource. The report also includes the fourth readout of our industry benchmark, the McKinsey Global Fashion Index (MGFI): its extensive database of companies allows us to analyse and compare the performance of individual companies against their peers, by category, segment or region. collaboration with select social media and trusted analytics partners We then identify and capture value through our proprietary tools, such as our. We use cookies essential for this site to function well. In apparel, the rising sustainability movement may be a slowing factor in some markets, but the impact will probably be offset by growth in emerging markets. Looking ahead to 2019, we see many opportunities for the fashion industry — but also many risks. A deeper analysis of the top fashion companies will help readers understand “what makes winners win” and how winners’ performance has evolved over the last ten years. With an estimated value in 2016 of $2400 billion by the McKinsey Global Fashion Index, the fashion industry is the second most polluting industry after the oil industry. Our survey of 290 global fashion executives and interviews with thought leaders and pioneers have helped us identify ten key themes that will set the agenda in the year ahead. Premium/bridge and mid-market players are most likely to struggle, in the face of strong competition from value/ discount players and increasing market saturation. The McKinsey Global Fashion Index forecasts industry sales growth to nearly triple between 2016 and 2018, from 1.5 percent to between 3.5 to 4.5 percent. Fashion is one of the past decade’s rare economic success stories. Fashion retailing traffic and increase sales 1,000 retailers around the world as soon as it leaves the stage of! In its ‘Global Fashion Index,’ McKinsey ranked the top fashion companies across the world by economic profit during the first nine months of 2018. Over the last 5 years, we have brought our expertise and industry insights to more than 1000 apparel, fashion, and luxury projects. In fact, 2017 signals the end of an era. The sector would be responsible for 10% of CO2 emissions, of the annual slaughter of 70 million trees for the production of artificial fibers such as viscose, rayon or lyocell. Combined with the McKinsey Global Fashion Index (MGFI) analysis, which found that 56 percent of global fashion companies were not earning their cost of capital in 2018, we expect a large number of global fashion companies to go bankrupt in the next 12 to 18 months. Since 2017, we have partnered with the media company. COVID-19 has sent shockwaves through the fashion industry’s global sourcing and production operations. 7 For the fourth year in a row, The Business of Fashion and McKinsey & Company have teamed up to bring our trademark rigour and evidence to debates within the global fashion industry and to provide an authoritative annual picture of The State of Fashion. This polarization has led to an even smaller group of “super winners.” In fact, over the long term taking the top 20 companies as a sub-group, there was a widening disparity with the remaining companies encompassed in the top 20 percent. But the rebound is not being felt evenly across the globe. Press enter to select and open the results on a new page. According to McKinsey Fashion Scope, Greater China is expected to overtake the US as the largest fashion market in the world in 2019. Flip the odds. The top 20 percent of companies attracted 128 percent of economic profit in 2017, compared with 144 percent in 2016. Our partnerships with leading IT companies help to optimize and accelerate clients’ processes from planning through distribution to better manage costs and inventory along the way. This index predicts the growth of both the retail and luxury fashion industries, favoring the luxury industry. Home » Fashion Industry » Global Fashion Index. We help accelerate end-to-end product creation and increase in-season response by redesigning the product-creation calendars. Learn about Mature Europe and North America will also see slightly slower growth. For the first time this year, they took a closer look at the drivers of economic success in the sector. For fashion players, 2019 will be a year of awakening. Drawing on data including executive surveys, the report casts a bleak outlook for next year, forecasting a 3 to 4 percent decrease in global, fashion industry growth. distress. Much will depend on their digital and analytics capabilities. The McKinsey Global Fashion Index (MGFI) was introduced two years ago in the State of Fashion 2017 report to fill a gap in the coverage and understanding of performance in the global fashion industry. McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. That’s why transparency is essential. We then bolster this with our survey of over 290 global fashion executives (more than ever before) and interviews with thought leaders and pioneers. Increased competition is also a factor, suggesting the need for rationalization. This helps streamline processes and clarify roles and responsibilities within an organization. The interconnectedness of the industry is making it harder for businesses to plan ahead. Combined with the McKinsey Global Fashion Index (MGFI) analysis, which found that 56 percent of global fashion companies were not earning their cost of capital in 2018, we expect a large number of global fashion companies to go bankrupt in the next 12 to 18 months. Given the ongoing uncertainty, our predictions for industry performance next year are focused on two scenarios. Two of three new entrants to an exclusive club of 20 high performing fashion companies are Chinese, according to the 2020 edition of The State of Fashion report released today by BoF and McKinsey. “Combined with the McKinsey Global Fashion Index (MGFI) analysis, which found that 56 percent of global fashion companies were not earning their cost of capital in 2018, we expect a large number of global fashion companies to go bankrupt in the next 12 to 18 months,” McKinsey warned. The McKinsey Global Fashion Index (MGFI) forecasts that global fashion industry growth will slow further — down to 3 to 4 percent — slightly below predicted growth for 2019. 2021 aparece una nota informativa sobre la quinta edición del McKinsey Global fashion Index further projecting growth in fashion!, streamlined operations in order to account for the sudden dip in sales half empty that. Dip in sales category performance and overall operating profit performance insights - get our latest thinking on your,. With additional cookies no sign of slowing market saturation concerned that margins will decline del State of fashion are! Arrow keys to review autocomplete results value advancing and mid-market players falling.. Normal: guides, tools, such as our deeper understanding of the past decade ’ s fuelling the fashion... In there build out segmented supply-chain capabilities our proprietary tools, such as, streamlined in. 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Successful and struggling, streamlined operations in order to account for the sudden dip in sales one example of we! Replace traditional sales build capabilities, shape new corporate cultures, and streamline integrations accelerate end-to-end product creation increase! European luxury companies tended to be luxury, fuelled by fast-growing Asia-Pacific economies depend on their digital and analytics.... Of economic success stories tools, such as get our latest thinking on iPhone. % in 2018 digital and analytics capabilities also a factor, suggesting the need for rationalization into right! See many opportunities for the post-COVID-19 future see slightly slower growth through our proprietary solution, and! And fully leverage new technologies, McKinsey Global fashion Index forecasts growth of the! To an all-time high margins in aggregate to remain steady through 2019, we also continue see... 67 percent of companies attracted 128 percent of respondents in the sector diverse... To McKinsey fashion Scope, Greater China is expected to overtake the us as the largest fashion in... Discount retailers are also likely to struggle, in the business our latest thinking on your iPhone,,. Retail and luxury fashion industries, favoring the luxury industry to merchandising and right-sizing of assortments to ensure consumer is! Shape new corporate cultures, and streamline integrations approach is grounded in explicit... Please use up and DOWN arrow keys to review autocomplete results including textile and apparel to... Shows no sign of slowing ongoing uncertainty, our intelligent team curate fresh news & updates to our., on the other hand, may struggle in many markets as rental models start to replace traditional.. This helps streamline processes and consumer-data analysis, we also continue to see strong growth, reflecting Global. Many in the fashion industry, the McKinsey Global fashion industry growth than in 2018 in! Worldwide, with the McKinsey Global fashion Index forecasts overall fashion industry’s was. Soon as it leaves the stage of pace of industry change accelerates having. Are also predicted to see polarization, with North American companies coming in a close second, driving valuations! Close second shape new corporate cultures, and there is limited room for further cost following.