WWD’s latest webinar with industry experts from Kearney focused on the results of a recent executive sentiment survey that was conducted over the summer. The results showed concern surrounding economic recession and the impact of inflation as fashion retailers and brands navigate a landscape fraught with changing consumer behaviors.
The webinar, titled “Inside the Minds of Today’s Fashion Industry Leaders,” featured Brian Ehrig, partner and global head of Fashion and Luxury at Kearney; Vincent Barbat, partner and Europe head of Fashion and Luxury, and Nora Kleinewillinghoefer, partner and Americas head of Fashion and Luxury at Kearney. This reporter moderated the session.
“Inflation or economic recession is by far the top concern,” Ehrig said of the survey results. “Everything else falls far below that in terms of priorities.”
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Ehrig said a third of executives surveyed found inflation or economic recession extremely concerning or very concerning, adding, “and everything else falls pretty far below that. And that really tracks all the way around the world and every geography is in the same situation.”
The amplified focus on macroeconomic influences underscores a broader tension in an industry deeply connected to consumer confidence and discretionary spending. However, the data portrayed a significant geographic variance in these concerns, with differing impacts on European and American markets.
“From a European standpoint, there are two to three big markets that make the luxury markets a success over the last few years,” Barbat said. “China is definitely one very important market as well as the U.S. quite frankly. In the last few months we have witnessed a slowdown of both the U.S. and Chinese market, which has not recovered since the pandemic. I think even though all of these concerns are extremely important, the most critical one would certainly be the evolution of the economy in China. For some of the big brands that have global reach, it could represent 40 to 50 percent of the business. So, you can imagine that if China is going down, it has a significant impact on the economics.”
Kleinewillinghoefer noted that aside from inflation, top concerns were “somewhere between 30 and 45 percent in terms of extremely concerning or very concerning, which I think highlights something that we’re hearing in the market a lot — that there’s just such a breadth of concerns that executives are facing right now and that it’s actually very hard to focus on one issue independently,” she said. “It really is a matter of focusing on all the different strategies on all the different areas. And executives for the most part in the latter part of the year as well as in the former half of the year, have been having to divert their attention to a number of different important issues.”