“Anxiety” and “worry”. With those two words we could
\nvery well define the feelings with which the fashion world, and its top
\nexecutives, face the year 2020. This situation is counterbalanced by the
\nslight air of optimism with which some sectors, especially in the United
\nStates, were entering 2019.<\/p>\n
This is at least what the latest annual report on the state of the
\nindustry, “The State of Fashion 2020”, by the consulting firm McKinsey and
\nBoF, says, based on a survey of over 290 senior fashion executives, as well
\nas opinion leaders and opinion leaders. It forecasts a 2020 dominated by
\ninstability and a slowdown that the main companies in the sector, and their
\nexecutives, are already preparing for. This situation is considered by many
\nto be premature, but according to the consultancy firm, it will lead to a
\ndrop of between 3 and 4 percent in the fashion industry’s income. These
\nfalls will be underpinned by growing macroeconomic uncertainty, trade wars,
\ndeclining sales in emerging markets in Asia and the Pacific, and the
\neconomic pessimism that is beginning to reign in Europe.<\/p>\n
In the face of such a worrying situation for the fashion industry, it
\nwill not all be bad news. Or rather, it will not be bad news for everyone.
\nSince the growth of the emerging markets in Europe, Latin America, the
\nMiddle East and Africa is expected to remain stable throughout 2020. At the
\nsame time, we will see a greater concentration of a sector in which large
\ncompanies and multinationals will be taking an increasing share of the pie.
\nBecause they will be the only ones able to satisfy the demands in
\ninnovation and sustainability that today’s consumers demand.<\/p>\n
\n“It will become increasingly difficult for medium-sized companies to
\ncompete with the all-powerful companies in the fashion industry,” says
\nAchim Berg, McKinsey’s director of fashion and luxury, and one of the
\nauthors of the report. Because “to meet challenges such as digitalization,
\nconsumer demand and sustainability, brands need to focus their priorities
\nand make the necessary capital investments to carry out their strategic
\nplans. And it will be the companies that can do so that will find some
\nlight throughout 2020.<\/p>\n
\nIt will not be an easy year,” says Imran Amed, founder and editor-in-chief
\nof The Business of Fashion and co-author of the report. He underlines the
\nfact that “the coming year will require fashion companies to make
\nsignificant changes in their value chains, as on many other fronts, while
\nlearning to reduce their risks and manage in a climate of uncertainty.<\/p>\n
\nIn view of this situation of growing concern and competition, the report
\nconsiders these 10 key points as the main challenges and issues to be
\naddressed by companies in the fashion industry throughout this 2020. That
\nis, if what they want is to survive in the face of turbulent times that
\nhave already managed to defeat more than one giant that felt invincible.<\/p>\n
\nOne of the main recommendations the report makes to companies is that by
\n2020 they should act with extreme caution. They should pay particular
\nattention to monitoring potential frictions between developed economies and
\nemerging markets. Situations that, together with the increased risk of a
\npossible recession, have already led many companies to develop resilience
\nguides and contingency plans with which to mitigate macroeconomic and
\ngeopolitical instabilities and trade tensions.<\/p>\n
\nChina will continue to offer incredible and exciting growth opportunities
\nfor the fashion industry in 2020, but the Chinese giant is proving to be
\nmuch more complex than many multinationals ventured to estimate. So it is
\nadvised that, as some companies are becoming too dependent on the Chinese
\nmarket, and others are only aspiring to enter it; companies should consider
\ndiversifying their risks by expanding into other growth areas.<\/p>\n