McKinsey State of Fashion 2021 Survey; McKinsey analysis. 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. Companies have also been looking inward, implementing changes to the core operations that are reshaping the entire fashion system, from shortening the length of the fashion cycle to integrating sustainable innovation into the core product-design and manufacturing processes. The outlook for the global fashion industry in 2023 is uncertain and tenuous. Zara's Center - 2022 Annual Report. ADVB Strategic Minds srl - All rights reserved. On the bright side, their Join Life initiative is committed to using the best procedures and more environmentally friendly raw materials to produce their clothing. The company could be described as hopefully transitioning, yet with major shortcomings in their planning a transition to sustainability, measuring it and tracking of progress. According to McKinseys 2019 Apparel Chief Purchasing Officer Survey, while the absolute number of sustainable fashion products remains low, there has been a fivefold increase over the past two years. Sustainability, which breaks into our respondents list of the most important challenges for the first time, is evolving from a tick-box exercise into a transformational feature. Copyright 2023 MarketWatch, Inc. All rights reserved. Asia in particular is emerging as a fertile ground for small and midsize enterprises that leverage e-commerce to reach out from the factory floor. Its a sentiment shared by industry executives: 40 percent expect conditions for the industry to improve in the year ahead. We see brands rethinking store formats and leveraging data and analytics to predict footfall, manage assortments, and built personalized offerings. The clothing retailer has more nearly 3,000 stores, including its kids and home stores. The company also posted a net income growth of 41% to 1.8bn in H1 2022. Download The State of Fashion 2019, the full report on which this article is based (PDF3 MB). Economic profit grew for the second year running in 2018, following consecutive annual declines from 2012 to 2016 (Exhibit 2).15To view exhibit, refer to The State of Fashion 2020. The company reported net profit of 760 million euros ($812 million) for the quarter to end April, in line with analysts' expectations. And digital innovation will go behind the scenes: digitization will be the key to supply-chain efficiency, lowering procurement costs, and the enhancement of sourcing opportunities. On the other, global economic growth is slowing and competition is more intense than ever. KEY FINDINGS. We expect a similar trajectory in the United States, with sales down 7 to 12 percent next year compared with 2019, and only a modest recovery before the first quarter of 2023. There are currently no items in this Watchlist. Indeed, recent data show that we have vaulted five years forward in consumer and business adoption of digital in a matter of months. All this comes against a backdrop of the fashion industry having turned a corner in 2018, with increased growth justifying the optimism expressed in last years global fashion survey. This unforeseeable humanitarian and financial crisis has rendered previously planned strategies for 2020 redundant, leaving fashion businesses exposed or rudderless as their leaders confront a disorienting future and vulnerable workers face hardship and destitution. As sustainability becomes a more urgent concern, brands need to ramp up their efforts to reflect customer values in their assortments, supply chains, and ways of working. Despite a dip in margins, discount and luxury outperformed the wider market in 2020, while the midmarket continued to be squeezed. Spain is the biggest market with 547 stores (including Zara Kids and Zara Home), followed by China (229 stores), France (145), Russia (144) and Italy (134). Log in to see them here or sign up to get started. zara annual report 2022 pdf aim assist 8 ball pool all version remington r5 rgp handguard alexandria ocasio cortez interesting facts zara annual report 2022 pdf blackstone london office monk and the employee of the month cast average energy consumption of commercial buildings frases de novios enamorados geoffrey dean goodish We predict that 2019 will be a year shaped by consumer shifts linked to technology, social causes, and trust issues, alongside the potential disruption from geopolitical and macroeconomic events. They can lean into the following ten emerging consumer trends: Bereft by global risks and uncertainties, leaders in the fashion industry will need to pay careful attention to macroeconomic and political issues in the regions where they produce and sell their products in the year ahead. Zara has filed a copyright infringement lawsuit against Thilik and its owner Queenie Williams, seeking injun Evrnu and Zara Capsule Collection is made with recycled waste material, NuCycl Lyocell. McKinsey analysis of fashion forecasts projects relatively slow sales growth of between 2 and +3 percent, weighed down by a contraction in the European market (expected to shrink between 1 and 4 percent) (exhibit). To thrive in this environment, companies must think strategically, sharpen their decision making, and keep their fingers on the pulse of customer demand. This is consistent with their compound annual growth rate (CAGR) over the past three years, which has been 9 percent for affordable luxury and 6 percent for value, the highest of any segment since 2013. Mainstream customers are moving into a decisive phase of digital adoption, and online sales of apparel and footwear are projected to grow rapidly. Supply chains remain disrupted from the COVID-19 pandemic, elevating the need to invest in faster and geographically closer manufacturing systems. Intraday data delayed at least 15 minutes or per exchange requirements. But it is in the developing world, where healthcare systems are often inadequate and poverty is rife, that people will be hit the hardest. Achim Bergis a senior partner in McKinseys Frankfurt office,Leonie Brantbergis an associate partner in the London office, andSaskia Hedrichis a senior expert in the Munich office. Meanwhile, extreme weather is negatively affecting supply chains and raw materials across Asia. In all other regions and segments, executives are notably pessimistic, reflecting the potential challenges ahead (Exhibit 1).19To view exhibit, refer to The State of Fashion 2019. Europe, on the other hand, is under high pressure from currency rates and a growing energy crisis, which are likely to result in modest sales growth for the luxury sector (projected to grow between 3 and 8 percent). The U.S. has 98 stores as of January 2019. The fashion market, excluding the luxury sector, will struggle to deliver significant growth in 2023. We expect in 2022 that companies will seek fresh approaches to online creativity and commerce, with nonfungible tokens, gaming skins, and virtual fashion edging closer to the mainstream. More than ever, sustainability is dominating consumer priorities and the fashion agenda. Unlock it. Progress made toward SDG targets As reported by Inditex. Looking forward, our base case is cautiously optimistic, with the virus more effectively controlled over the coming year, thanks to a strong public-health response.2McKinsey analysis. Annual report and Key Performance Indicators of Zara. Strikingly, only 9 percent of respondents think conditions will improve next year, compared with 49 percent who said the same last year. Anita Balchandani is a partner in McKinseys London office, where Shrina Poojara is a consultant; Achim Berg is a senior partner in the Frankfurt office; Saskia Hedrich is a senior expert in the Munich office; and Felix Rlkens is an associate partner in the Berlin office. That said, the past years experience shows that consumers are resilient and that as economies recover, demand will follow suit. For the personal luxury goods industry (luxury fashion, luxury accessories, luxury watches, luxury jewelry, and high-end beauty), we estimate a global revenue contraction of 35 to 39 percent in 2020 year-on-year, but positive growth of 1 to 4 percent in 2021 (compared with the 2019 baseline figure). The average industry EBITA16To view exhibit, refer to The State of Fashion 2020. margin was 10.8 percent, a tick up on 2017 and the highest since 2014. Our first two reports, last yearand the year before, laid the foundation for rigorous in-depth research and analysis, focusing on the themes, issues, and opportunities affecting the sector and its performance. At the same time, they are demanding ever-quicker and more seamless fulfillment, from mobile shopping to drone delivery. The new building is a milestone for advanced communications, with 5G and wifi 6 coverage to achieve communications up to 10 times faster and more reliable than using LTE (Long Term Evolution). These are some of the findings from The State of Fashion 2022, written in partnership with the Business of Fashion (BoF). Reuters, the news and media division of Thomson Reuters, is the worlds largest multimedia news provider, reaching billions of people worldwide every day. Yet 2016 was one of the industrys toughest years. While the luxury and sportswear sectors have dominated the industrys list of super successes in recent years, macroeconomic context might change that in the upcoming year. Regardless of size and segment, players now need to be nimble, think digital-first, and achieve ever-faster speed to market. They should bear in mind the three trends that we believe will shape the 2017 fashion industry: the global economy, consumer behavior, and the fashion business model. Indeed, recovery is at the top of executives minds for the coming year, with 75 percent of luxury-segment executives, 61 percent of midmarket executives, and 50 percent of value executives expecting better trading conditions. The value segment continued to grow in 2016, particularly as a consequence of large global players expanding geographically. A 10/33 was given to Zara for maker wellbeing. As the world recovers from the COVID-19 pandemic, what will be the defining themes in the business of fashion? With companies in China leading the way, brands will engage even more closely with social media to offer shoppers exclusive content and personalized experiences. By Imran Amed, Anita Balchandani, Achim Berg, Saskia Hedrich, Jakob Ekelf Jensen, and Felix Rlkens. Another is that Indiais on the riseits growing middle class, powerful manufacturing sector, and increasingly savvy tech have made it an essential destination for fashion companies. The customer is at the heart of our unique business model, which Last fiscal year ended on January 31, 2023. Fashion leaders are also watching global headlines closely in the year ahead, as macroeconomic and political uncertainties continue to obstruct business operations and escalate reputational risk. With information and the ease of comparison at their fingertips, consumers are becoming less brand loyalamong millennials, two-thirds say they are willing to switch brands for a discount of 30 percent or more. Source: Kantar Media, Extraordinaries & Discontinued Operations. Positive impact is the core axis of our sustainability vision, which is underpinned by respect for human and labour rights and compliance with the most stringent environmental standards. More intense than ever excluding the luxury sector, will struggle to deliver significant growth 2023. 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