But the rebound is not being felt evenly across the globe. 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 report will include rigorous analysis based on extensive qualitative and quantitative data, interviews with top industry executives and the McKinsey Global Fashion Index, a database of more than 500 companies that tracks industry sales as well as operating and economic profit. ever before. 91 McKinsey Global Fashion Index The squeezed premium/bridge and mid-market players drove nearly 80 percent of the absolute decline in industry economic profit between 2010 and 2016. Flip the odds. Source: McKinsey Global Fashion Index (MGFI); expert estimations; McKinsey & Company Consumer Pulse. 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. Jewelry and watches, on the other hand, may struggle in many markets as rental models start to replace traditional sales. Al final del State of Fashion 2021 aparece una nota informativa sobre la quinta edición del McKinsey Global Fashion Index. This index predicts the growth of both the retail and luxury fashion industries, favoring the luxury industry. Our flagship business publication has been defining and informing the senior-management agenda since 1964. The latest reading of the McKinsey Global Fashion Index (MGFI), meanwhile, reveals new insights into fashion-company performance by category, segment, and region. TRENDING ON BoF. During this time, their EBITA margins have been eroded by rising selling, general & administrative expenses (SG&A). The West will no longer be the global stronghold for fashion sales. Indeed, according to McKinsey Global Fashion Index analysis, fashion companies will post approximately a 90 percent decline in economic profit in 2020, after a 4 percent rise in 2019. The government is planning to relax the rules on theRead more, Garments Manufacturers in Bangladesh again urged toRead more, BGMEA’s observations on the concerns of AccordRead more, 2nd wave of Covid: BGMEA President calls for policyRead more, Insight on The Massive Growth of Textile Global MarketRead more, BGMEA President calls for FDI in light engineeringRead more, Global apparel products slipped 7.92% in 2015, Korea – Next relocation ideal for Bangladesh. 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. 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. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. That’s why transparency is essential. our use of cookies, and How did Anta and HLA do it? In its ‘Global Fashion Index,’ McKinsey ranked the top fashion companies across the world by economic profit during the first nine months of 2018. The West will no longer be the global stronghold for fashion sales. Twelve of the top 20 have been a member of the group for the last decade. 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. 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. Sorry, we couldn't find any results. A recent report by the McKinsey Global Fashion Index forecasts growth of only 3.5 to 4.5 percent for 2019, slightly below 2018 figures. In fact, 2017 signals the end of an era. 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. Sunny intervals but storms ahead . Similar to last year, we expect sportswear to continue its recent winning performance, boosted by strong demand from younger cohorts. It is a fascinating list; it’s also a diverse list—lots of different types of companies in there. But the rebound is not being felt evenly across the globe. Economic profit, which factors in both explicit and implicit costs, was up by 4 percent. Given the ongoing uncertainty, our predictions for industry performance next year are focused on two scenarios. The McKinsey Global Fashion Index forecasts overall fashion industry growth of 3.5 to 4.5% in 2019. Through digitizing processes and consumer-data analysis, we apply insights to merchandising and right-sizing of assortments to ensure consumer centricity is top of mind. Economic profit, which factors in both explicit and implicit costs, was up by 4 percent. 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. 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. 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. 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. Which fashion brands and retailers are the most shopped and visited and which attract the most positive sentiment among their customers? Our clients range from medium-size companies to industry leaders—spanning across producers and brands, vertical fashion retailers, apparel multibrand retailers, department stores, and luxury-goods companies. “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. Please click "Accept" to help us improve its usefulness with additional cookies. while also planning for postcrisis realities. We use cookies essential for this site to function well. To everyone in the … Our global team of experts includes former product, merchandising, sales, and supply-chain managers from renowned apparel, fashion, and luxury companies. As the pace of industry change accelerates, having innovative and sustainable business models is increasingly important. Outstanding performers included handbag and luggage makers and own-brand multi-category players. Today, the Global Fashion Agenda (GFA), an industry-leading non-profit advocating for public-private cooperation on sustainability in fashion, released a … McKinsey Global Fashion Index. McKinsey: Participants in this virtual roundtable have asked us a lot about discounting. 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. 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. This database of more than 500 companies allows us to analyze and compare the performance of individual companies with their peers, by category, … Announces Senior Leadership... TRANSFORM traditionally managed companies to... Distinguishing factors between traditionally managed... Face shields for COVID-19 infection control. Well-known European luxury companies tended to be over represented in the top 20, with North American companies coming in a close second. The interconnectedness of the industry is We help clients in end-to-end transformations to build out segmented supply-chain capabilities. Some 67 percent of respondents in the BoF-McKinsey State of Fashion survey are concerned that margins will decline. 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. Consumers, stuck at home worrying about their The global fashion market is dominated by 20 companies, according to new research from management consultancy firm McKinsey & Company. As in previous years, we expect the best-performing segments in 2019 to be luxury, fuelled by fast-growing Asia Pacific economies and the continuing boom in global travel, and value, fuelled by strong propositions globally. Fashion is one of the past decade’s rare economic success stories. Louis Vuitton’s CEO on Navigating the Pandemic and the Future of Luxury 2. These are the facilities that do the cutting, sewing and finishing of garments in the final stages of production. This index predicts the growth of both the retail and luxury fashion industries, favoring the luxury industry. This helps streamline processes and clarify roles and responsibilities within an organization. We advise across all functions along the value chain—consumer insights, value proposition, company strategy, product creation, supply chain, channels, and stores. Since 2017, we have partnered with the media company. worldwide, with the McKinsey Global Fashion Index further projecting growth in global fashion industry sales by 4.5% in 2018. In 2019, the predicted overall fashion industry’s growth was between 3.5% and 4.5%, according to the McKinsey Global Fashion Index. The most resilient winners included luxury, sportswear and fast fashion players, reinforcing the point that brand investment and operational efficiency are key drivers of sustainable business models. distress. McKinsey Global Fashion Index. The mood among respondents to our executive survey is sober across geographies and price points, and the pockets of optimism seen last year in … 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. So, what’s fuelling the fast fashion boom? The ones who will succeed will have to come to terms with the fact that in the new paradigm that is taking shape around them, some of the old rules simply don’t work. Which fashion brands and retailers are the most shopped and visited and which attract the most positive sentiment among their customers? These “super winners” now account for 97 percent of economic profit, compared with 70 percent in 2010: this suggests they are increasingly dominating the global value pool. Over the last 5 years, we have brought our expertise and industry insights to more than 1000 apparel, fashion, and luxury projects. But it’s not as if shopping halted altogether. Postmerger, we help clients identify and tap into the right synergies, build capabilities, shape new corporate cultures, and streamline integrations. So what unites them? reveals their immediate response to the crisis and details strategies to reshape sourcing for a demand-driven, sustainable future. Notably, the top 20 group of companies has remained stable over time. Companies big and small, successful and struggling, streamlined operations in order to account for the sudden dip in sales. 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. Most transformations fail. We help accelerate end-to-end product creation and increase in-season response by redesigning the product-creation calendars. Please click "Accept" to help us improve its usefulness with additional cookies. 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. Just as China … Created in partnership with McKinsey & Company, the report anticipates that, due to the pandemic, companies will post a 90 percent drop in profit by the end of 2020 (in 2019, profits rose four percent). But the rebound is not being felt evenly across the globe. Share Comment. The latter emanate mainly from the evolving macroeconomic environment and the potential for disruption from shifting trading relationships (see trend articles on. Home » Fashion Industry » Global Fashion Index. We predict industry growth of 3.5 to 4.5 percent in 2019, slightly below our 4 to 5 percent estimate for 2018, when the industry was bouncing back from a relatively weak period. 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. COVID-19 has sent shockwaves through the fashion industry’s global sourcing and production operations. Their average top-line growth is four times higher than that of other fashion players, but this tends to translate only into valuation multiples (twice as high as average) while profitability still lags behind. We see Latin America (in particular Brazil), Middle East and Africa and Russia experiencing more economic and political challenges that are likely to dampen their consumer spending. store operations, they will be ill prepared for the post-COVID-19 future. 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. Four years in, this is growing to become an unrivalled resource. Copyright; 2020 Textile Focus. 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. 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. 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. COVID-19 has sent shockwaves through the fashion industry’s global sourcing and production operations. The latest reading of the McKinsey Global Fashion Index (MGFI), meanwhile, reveals new insights into fashion-company performance by category, segment, and region. hereLearn more about cookies, Opens in new The West will no longer be the global stronghold for fashion sales. 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. 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. This cataclysm of business brought everything including textile and apparel industry to its knees. Mature Europe and North America will also see slightly slower growth. People create and sustain change. 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. Looking ahead to 2019, we see many opportunities for the fashion industry — but also many risks. A darkening mood. Fashion players are under pressure to be digital-first and fully leverage new technologies, One example of how we do this is our proprietary solution. Companies able to differentiate on price point/efficiency or brand have performed best. These companies own some of the biggest and best-known brands in the business. 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. Our pricing approach is grounded in both our extensive apparel experience along with our application of repeatable analytics. It is useful to view the industry’s potential future through four separate lenses, each of which offer a perspective on the most important drivers of growth and key topics covered in this report. Fashion is one of the past decade’s rare economic success stories. 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. Learn about A darkening mood. The interconnectedness of the industry is making it harder for businesses to plan ahead. 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. We cocreate digital strategies with clients through workshops—tapping into our proprietary solutions and tools—that help to identify where the value is, design pilots, and build a digital road map for implementation. Transparency does not equal sustainability. 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