Looking ahead to the new year, fashion executives have little certainty about how uncertain the next 12 months are likely to be.
The industry was already struggling with a combination of volatile economic and geopolitical challenges, but the re-election of America’s Donald Trump earlier this month has added a new dimension of unpredictability to the outlook.
The president-elect has made sweeping commitments to reform America’s trade relations, free businesses from regulatory red tape, lower taxes and curb illegal immigration. Investors, analysts and business leaders have used his statements and cabinet appointments in recent weeks to gauge how political rhetoric translates into policy and how Trump’s return to power will shape markets.
This week, the fashion world got a few hints about three key questions
Tariff targets
Throughout his campaign, Trump threatened to impose aggressive tariffs on all foreign goods entering the United States, but on Monday he provided more details on imports from America’s biggest trading partners: Canada, Mexico and China.
In social media posts, the president-elect said he would impose a 25 percent tariff on imports from Canada and Mexico and threatened an additional 10 percent tariff on goods from China (much lower than the 60 percent tariff on Chinese-made goods he had previously imposed). threatened).
Many fashion companies have been thinking about their sourcing strategies for months in preparation for such moves. Yet China is still America’s largest clothing supplier. Meanwhile, Mexico, a much smaller manufacturing center, remains among the top five suppliers to the United States. Fashion brands would likely pass on the cost of the new tariffs to American consumers, but that could weigh on consumer spending. U.S. brands may also face retaliatory tariffs that make it difficult to access key foreign markets: the two largest export destinations for American clothing and textiles are Mexico and Canada.
Shares of Canadian fashion companies Canada Goose and Lululemon fell briefly on Monday.
“We do not comment on speculation,” Canada Goose said in a statement. “What we’re focused on right now, on one of our busiest shopping weekends, is growing our business, delighting our customers and delivering a product that’s second to none.”
Analysts have read Trump’s statement in two ways. Some have taken the increasing precision of the tariff plans at face value, expecting swift and early action once the president-elect takes office. Others have pointed to past patterns where explosive social media blasts have served more as a negotiating tactic than anything else.
DEI Reversal
This week, Walmart became the latest and largest US retailer to scale back its diversity, equity and inclusion programs.
The company is making major changes, including ending preferential treatment for suppliers based on race or gender and removing certain transgender products from its online marketplace. It will not renew a five-year commitment to fund the Center for Racial Equity, a nonprofit it founded in 2020 to address systemic racism. and it is withdrawing from the Human Rights Campaign Corporate Equality Index, a benchmark for measuring LGBTQ workplace policies.
“We’ve been on a journey and we know we’re not perfect, but every decision comes from a place of wanting to foster a sense of togetherness,” Walmart said in a media release. “We are ready to change alongside our partners and customers representing all of America.”
Many brands began to quietly withdraw or de-prioritize DEI efforts as attention to Black Lives Matter faded in 2021. The trend has been fueled by the Supreme Court’s decision to end affirmative action at universities in 2023, raising concerns that DEI programs could turn companies into lawsuits. Walmart’s move comes as Trump’s re-election has emboldened conservative supporters in their campaign against so-called “resurgent capitalism.”
“This Walmart is preparing for a Trump presidency and a Justice Department,” Amber Madison, founder of DEI’s Peoplism consultancy, told The New York Times this week. “If Walmart’s assessment of the Trump administration is that it protects his friends and goes after his enemies, this Walmart is proving to be a friend.”
On the other hand, Trump’s rhetoric on immigration, women’s and LGBTQ rights could spark the emergence of DEI-related flashpoints over the next four years, some experts say. If a moment as inflammatory as the so-called “Muslim ban” Trump introduced weeks after taking office in 2016 were to happen again, many brands could find themselves unprepared and with little evidence of efforts to support the diverse demographics that make up their consumer base.
Consumer confidence
One of the many unknowns is how consumers will react to Trump’s re-election, which is expected to cut taxes and put more money in shoppers’ pockets.
What better way to test this than on America’s biggest shopping holiday: Black Friday.
Retailers began advertising steep discounts well before the big sales day in an attempt to attract cautious and increasingly frugal consumers. It seems to work. According to Adobe Analytics, online shoppers have spent $100 billion online this month and $6 billion on Thanksgiving alone, up nearly 10 percent from a year earlier.
The National Retail Federation predicts that holiday spending will reach a record high of nearly $990 billion this year, growing as much as 3.5 percent over 2023. US consumer confidence reached its highest level in more than a year this month.
Still, shoppers remain highly price-sensitive — a key factor in this year’s U.S. election — and looking for bargains. Anecdotally, some companies and consumers are increasing their spending now in anticipation of trade war-related price increases in the coming year.
NEWS IN BRIEF
FASHION, BUSINESS AND ECONOMY
LVMH’s Bernard Arnault says in the spy trial that he did not know about the surveillance. One of France’s former intelligence chiefs is accused of breaking data protection laws while helping the world’s biggest luxury group fight counterfeiting and monitor left-wing activists.
Abercrombie & Fitch sales fall short of Wall Street expectations. The retailer reported record revenue of $1.2 billion, but saw its shares fall after growth fell short of investor expectations despite its full-year outlook for growth and strong same-store sales.
Urban Outfitters defies retail woes as Anthropologie gains. The results suggest the company is doing better than other clothing retailers competing to attract more and more budget-conscious consumers to their stores.
Nordstrom Raises Annual Outlook, Overriding Retail Weakness. The Seattle-based department store chain predicts that annual sales, including credit card revenue, will remain up 1 percent from last year.
Macy’s was delayed after an employee discovered millions in shipping charges. One employee “intentionally” made false accounting entries to hide about $132 million to $154 million in shipping costs between the fourth quarter of 2021 and the third quarter of 2024, Macy’s said.
Dior’s Maria Grazia Chiuri presents a cruise in Rome. The longtime creative director, who has made destination shows that utilize local culture a key element of his method, will hold his next cruise in his hometown on May 27.
Represent sells a minority stake to the private equity firm True. The investment follows strong sales growth for the British menswear brand, which opened its first flagship stores in Los Angeles and Manchester this year and expects to reach £100 million ($127 million) in annual sales by the end of 2024.
Lanvin presents Peter Copping’s debut collection at Paris Menswear Week. After a break of almost two years, the Parisian fashion house will return to Paris Fashion Week during menswear week in January 2025.
Pepkor, Africa’s largest clothing retailer, plans to increase its growth. The company’s share price rose to a three-year high when it announced a dividend that exceeded expectations and outlined plans for up to 300 new stores.
BEAUTY BUSINESS
P&G is doubling down on China’s TikTok to reverse declining sales. As it revamps its marketing, influencer partnerships and product lineup, the Ohio-based conglomerate has invested heavily in Chinese shopping app Douyin.
L’Oréal launches a $475 hair dryer. The device uses infrared technology and was created in collaboration with the Chinese technology company Zuvi.
Nykaa buys the Indian beauty brand Earth Rhythm. An Indian beauty juggernaut has acquired a local skin care, cosmetics and personal care brand two years after its minority investment.
PEOPLE
Michael Kors named a new CEO in Capri’s leadership change. Cedric Willmote, who had been CEO of Michael Kors since January 2023, is stepping down and will be replaced by John Idol, CEO and Chairman of Capri Holdings.
Rissa Mananquil Trillo was appointed editor-in-chief Charm Philippine Islands. The beauty industry veteran will lead the magazine’s Philippine edition, which will launch in March under a licensing deal between Condé Nast and Mega Global Licensing Inc.
Hodinkee named a new editor-in-chief. The watch site tapped editor James Stacey to lead the next phase of editorial production following its acquisition by Watches of Switzerland in October.
Eliane Heilbronn, the matriarch behind the Chanel empire, dies at the age of 99. The fashion house confirmed Heilbronn’s death in a statement on Monday, adding that his funeral will be held privately.
MEDIA AND TECHNOLOGY
Australia bans access to social media by under 16s. The country’s Senate has passed a controversial bill that bans children under 16 from accessing social media apps and fines up to $32 million to companies that don’t prevent children from accessing their platforms.
Online marketing costs jump in the bidding war with Temu and Shein. In the U.S., for example, Temu has bid on keywords such as “Walmart Black Friday Deals,” “Kohls Black Friday” and “Bed Bath Beyond,” according to Google search ad data collected for Reuters by online marketing platform Semrush.
TikTok blocks teen beauty filters due to mental health issues. The platform imposes new restrictions on beauty filters for users under the age of 18, restricting changes such as lip plumping or skin smoothing amid growing concerns about their impact on teen self-esteem and anxiety.
Compiled by Darcey Sergison.
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