Fashion in 2025: prices, markets and new creatives among the challenges for the industry

The end of January, for many entrepreneurs, will mark a watershed: from the orders for clothing, footwear and leather goods for autumn winter 2025/26 and those for textiles and leather goods for spring 2026, which are concentrated precisely between January and February, it will become clear whether the recovery of the sector can really be at the end of 2025. Or whether we are facing a structural crisis and will have to wait longer.

The challenges for the new year are many. Apart from the geopolitical issues that have affected consumption - and burdened transport costs in the first place, and then production costs - there are two unknowns at the market level: theChina, which has never recovered its pre-Covid levels and where consumers have changed pace and, most likely, tastes, but still remain the largest consumer pool for luxury; the United States, which after a lukewarm year in terms of spending but not in terms of economic indicators, in January is preparing for the new Trump era that could lead to a rise in luxury prices, given the possibility of duties being applied to imported products.

The USA and China, together with Europe, which held its own in the post-Covid period thanks mainly to non-European tourists shopping on the move, are two key markets for Italian fashion. 2025 will also be the year to develop new markets, certainly smaller, but with high potential such as the Middle East (Emirates and Saudi Arabia) and India.

More transversal is the question of prices: if luxury has lost 50 million consumers, it is also due to the upward price shift (despite the fact that the cost of some raw materials has since fallen), which has left a gap in supply in the most affordable price bracket. Those who have instead focused on low prices - see platforms such as Shein, the Singapore-based ultra fast fashion giant - have gained market share especially in the USA and Europe, when even traditional fast fashion producers such as H&M have had a below-estimated year (this does not apply to Inditex, Zara's group, which closed the first nine months of 2024 with a turnover of EUR 27.4 billion, +7.1% on 2023, and gross profit of EUR 16.3 billion, +7.2%).

Returning to luxury, cutting off aspirational consumers has cost brands dearly. A McKinsey study released in April 2024 estimates that aspirational luxury consumers buy 18% of the value of the fashion market and 50% of the luxury market. Recapturing an audience of consumers who over the past four years have felt cut off from luxury for the benefit of the few at the top of the pyramid will perhaps be the biggest challenge for the maisons, who are studying how to do this.

Developing the off-price channel - with 'basic' collections produced ad hoc for outlet shops is one way, seeing the success that this sales channel is having - is therefore one of the formulas that companies are developing. Lowering prices, on the other hand, might not be an option: Andrea Guerra, CEO of Prada Group, admitted at the Altagamma Observatory that in recent years the mistake has been made of raising prices "just because it was easy", but he also said that "the mistake, however, will not be solved by lowering prices or bringing cheaper products to the market, but by offering quality creations, telling a story and certain values and being credible".

Creativity and credibility are two pivots of brand identity, especially in the luxury sector. In recent months, fashion houses, whether struggling or not, have made important managerial decisions (because they are managers) by changing creative directors.

The very latest pre-Christmas waltz saw enfant prodige Mathieu Blazy, who has been able to grow Bottega Veneta and manage it at a complex time for the group he is part of, move to Chanel, with Louise Trotter, former creative director of Carven, taking her place at Bottega Veneta. The announcement was the latest in a long line of changes to the creative leadership of the maisons during 2024.

In April Alessandro Michele took over the creative direction of Valentino (the fashion house had been left, after 25 years in the company, by Pierpaolo Piccioli: still without a "destination"; at the end of May Veronica Leoni was appointed creative director of Calvin Klein Collection, which will return with her to the New York fashion show in February; in September Sarah Burton became the new creative director of Givenchy (Lvmh); on 11 December came John Galliano's farewell to the creative direction of Maison Margiela (Otb Group) that he had taken on ten years ago.

Many other changes, it is rumoured, will take place in 2025: Donatella Versace's contract is due to expire in spring and, following the failed merger between Capri Holding and Tapestry Group, the American group that owns Medusa may attempt a relaunch with another creative director before a possible sale.

Numerous changes at the top took place - logically - also in other positions of the fashion houses. Among those most intriguing to insiders is the appointment of Stefano Cantino as ceo of Gucci, replacing Jean-François Palus who had taken the reins of the brand in 2023 after Marco Bizzarri's departure. Cantino arrived at Gucci in 2024, in May, as deputy ceo, and from 1 January 2025 he will take over the role that was Palus' and will report to Francesca Bellettini, Kering deputy ceo and head of brand development for the group.

Cantino has a long career in luxury behind him: he had spent the last five years at Louis Vuitton, where he had joined as senior vice-president communication & events (in 2023 the appointment of Pharrell Williams as men's creative director and the grandiose fashion show on the Pont Neuf), but before that he had spent twenty years at Prada, always in charge of marketing and communication (most recently, he was communication and marketing director).

The last chapter of this focus on the year that is now opening goes to sustainability, a topic on which companies have wanted to, but above all had to, focus also as a result of the regulations that have been passed by the European Union during 2024:

- the Ecodesign regulation, which among other things imposes the digital product passport from 2027;the "corporate" sustainability directives: the Csrd already requires larger companies to have a sustainability report;

- the Csddd that will impose, always starting with the largest companies, but cascading over the entire supply chain, the control precisely of the production chain (to avoid episodes like those that happened in Armani Operations, Dior and Alviero Martini);

- the Deforestation Regulation, which though postponed by one year, will oblige leather companies to certify their entire supply chain;

- the Product Safety Regulation, in force since 13 December, which requires manufacturers to indicate on textile and footwear products information on the fibres of which the product is composed.

Last but not least (but not least), the topic of textile waste: the EU will approve the revision of the Waste Framework Directive introducing the EPR also for this sector (in Italy it has already been introduced, but only on paper).

The question is whether companies will be able to keep up - especially in terms of investment - with this significant transformation, whether this will once again be reflected in prices and how the consumer will react, and whether the competitiveness of obligation-bound companies will be preserved in comparison to non-EU producers. With the Union focusing, in this legislative period, precisely on industrial competitiveness in the transition, the game is wide open.