The global apparel industry has experienced a year of mixed fortunes in 2024, with various brands and markets displaying a wide range of performances. While some brands have thrived amidst economic headwinds, others have struggled to maintain their footing. Luxury brands continued to shine, fast-fashion giants face headwinds, and emerging markets offer a glimmer of hope amidst economic uncertainties.

Luxury thrives, fast-fashion falters

High-end brands like LVMH, Kering (parent company of Gucci), and Hermès have consistently posted strong growth. LVMH, for instance, saw a 15 per cent increase in revenue in the first half of 2024, with its fashion and leather goods division leading the charge. This is attributed to robust demand from affluent consumers, particularly in China and the Middle East, who remain largely unaffected by economic fluctuations.

Conversely, fast-fashion retailers such as H&M and Zara have seen their profits squeezed due to a confluence of factors. For example, H&M's profits fell 20 per cent in the second quarter of 2024, as the company struggled to pass on higher costs to consumers. Rising production costs, increased competition from online retailers, and changing consumer preferences toward sustainability have all played a role.

Athletic & athleisure brands resilient

Athletic and athleisure brands like Nike and Lululemon continue to perform well, benefitting from the ongoing trend of health and wellness. In fact, brands like Nike and Adidas have sustained their growth momentum, thanks to the continued popularity of athleisure wear and a focus on product innovation and digital engagement. Nike's digital sales grew 30 per cent in the first quarter of 2024, highlighting the importance of e-commerce in the current retail environment. Nike's success in navigating the challenging market is largely attributed to its focus on digital transformation. By investing heavily in e-commerce and direct-to-consumer sales, the company has been able to mitigate the impact of declining foot traffic in physical stores. "Nike's digital strategy has allowed us to stay connected with consumers and drive growth even in a difficult retail environment," explains John Donahoe, CEO of Nike.

Table: Key brand performance metrics (H1 2024)

Market performance, regional disparities

The performance across regions have varied, the Chinese market for example has rebounded strongly in 2024, with pent-up demand following the easing of COVID-19 restrictions. This has benefited luxury brands and those with a strong presence in the country. Despite concerns about a slowing economy, demand for high-end goods remains robust.

The US and European market on the other hand has experienced a slowdown in 2024, with consumer spending impacted by inflation and economic uncertainty. This has particularly affected fast fashion brands reliant on price-sensitive shoppers. Even now, inflation and concerns about a potential recession are weighing on consumer sentiment. At the same time, emerging markets like India and Southeast Asia continue to offer growth opportunities for apparel brands, thanks to a growing middle class and increasing disposable incomes.

In India especially, international fast-fashion brands have seen tremendous success in India, capitalizing on the country's young and fashion-conscious population. H&M, Zara, and Uniqlo have all reported double-digit growth in the Indian market. "India is one of our fastest-growing markets, and we see tremendous potential for further expansion," says an H&M spokesperson.

Table: Key market performance metrics (H1 2024)

The outlook for the remainder of 2024 remains cautiously optimistic. Luxury brands are expected to continue their strong performance, while fast-fashion retailers will likely focus on cost-cutting measures and digital transformation to navigate the challenging environment. Emerging markets like India and Southeast Asia are expected to offer significant growth opportunities, while the US and European markets are likely to witness a gradual recovery.