Fashion
46% expect conditions to worsen in 2026: The State of Fashion 2026
Whereas in the past, fashion leaders facing the volatility of global affairs were uncertain about what lay ahead, now they seem to have accepted that constant change is simply the new normal.
‘Challenging’ has overtaken ‘uncertainty’ as the word executives polled in ‘The State of Fashion 2026’ report used most frequently to describe the industry in 2026, with tariffs cited as the topmost hurdle.
Forty-six per cent say they expect conditions to worsen next year, while 36 per cent view North America as unpromising or very unpromising.
A quarter believes industry conditions will improve in 2026.
Many leaders are feeling pessimistic and are not expecting an easy road ahead, with 46 per cent saying they expect conditions to worsen next year, compared with 39 per cent in last year’s survey.
By geography, 36 per cent view North America as unpromising or very unpromising, double last year’s share, according to the The State of Fashion 2026 report. The first such report was published in 2016.
But not everyone is so downbeat. Among those polled, a quarter believes industry conditions will improve, up from a fifth in 2025, suggesting some players see pockets of opportunity.
Sentiment towards China is finally picking up, even as conditions remain difficult: 28 per cent view the market there as unpromising in 2026, down from 41 per cent heading into 2025.
The fashion industry’s main agenda next year will be adapting to this new environment where trade, consumer behaviour and technology remain in rapid flux. Agile brands that can adapt quickly are likely to emerge as the winners, the report noted.
With turbulent conditions, including volatile input costs, supply chain disruptions and slow growth, straining fashion’s economic model, artificial intelligence (AI) is shifting from a competitive edge to a business necessity.
Companies are reshaping workforces accordingly, with some existing jobs becoming more AI-centric, enabling roles to shift towards higher-value creative and analytical tasks.
To harness this technological change, companies must redesign their processes and compete for AI talent—looking beyond the fashion ecosystem to find it—while protecting the essential creativity that makes fashion tick.
Business leaders must shift their focus from small pilots and experiments that can only deliver incremental change towards a more fundamental reassessment of how their organisations work. And while still nascent, agentic AI is reshaping how people work and collaborate, so fashion companies will need to figure out how they can harness this emerging technology too.
AI is also transforming how people shop. Customers are turning to large language models to search for products, compare offerings and receive tailored recommendations.
Some are already using AI as style and wardrobe consultants, seeking advice on what to buy and where to buy it, making fashion brands’ presence in AI chatbot responses the new search engine optimisation.
These dynamics will only grow more pronounced as agentic commerce accelerates in the second half of the decade, says the report.
Fostering customer loyalty is emerging as an important frontline in the battle for customers, with more than half of executives citing retention strategies as a key theme shaping the industry in 2026.
To retain—and attract—customers, brands will need to give them what they want, and increasingly that means offering value. While luxury players raised prices without corresponding improvements in product quality or creativity, design-led brands in the mid-market elevated their products and store experiences.
Now, the mid-market is the fastest-growing segment, replacing luxury as fashion’s main value creator. Meanwhile, smart eyewear that blends fashion and technology has become the fastest-growing accessory category, with further product launches expected in 2026.
High prices remain a significant hurdle for aspirational customers, and anyway, more and more would-be luxury shoppers are focusing on their personal wellness: body, mind and health—a trend the survey first called out in 2017. Next year will inevitably be yet another year of dislocation for fashion companies. In a flat market, only those companies that capture the hearts and minds of customers will manage to grow and gain market share, they report adds.
Fibre2Fashion News Desk (DS)
Ind-Ra expects sector revenues to grow around 9 per cent year on year (YoY) in FY26 and 10.5 per cent YoY in FY27 following uneven and subdued growth through FY24 and early FY25; the growth in FY25 was 8 per cent YoY.
Ind-Ra expects India’s apparel retail sector revenues to grow around 9 per cent YoY in FY26 and 10.5 per cent YoY in FY27 following uneven and subdued growth through FY24 and early FY25.
Premium, branded and ethnic players are expected to see steadier, high single-digit growth trends.
Ind-Ra feels value retailers will outperform other segments within apparel, with robust revenue growth.
Ind-Ra feels value retailers will outperform other segments within apparel, with robust revenue growth through healthy same store sales growth and rapid store additions, albeit at a lower profitability.
Healthy growth in operating profit coupled with strong inventory turns is expected to result in value retailers demonstrating stronger-than-industry return indicators and credit metrics.
Premium, branded and ethnic players are expected to see steadier, high single-digit growth trends as consumer confidence rebuilds with a better spread out wedding calendar than in FY26 and early signs of normalisation seen in the first nine months of FY26.
Listed apparel retail players from Ind-Ra’s sample set reported revenue growth of around 10 per cent YoY in these nine months as the government’s consumption push through lower taxation and mild inflation resulted in higher disposable income and improved affordability.
The operating profit margins also improved to 15.6 per cent in the nine months compared to 15.2 per cent in FY25 due to various cost optimisation measures adopted by companies.
Organised retailers are pivoting from aggressive expansion to productivity-led growth. After elevated store additions in FY24-FY25, Indian apparel retailers are moderating store roll-outs, sharpening site selection, right-sizing formats and targeting faster ramp-ups of recent openings, with omni-channel execution and scalable franchise models enhancing reach and capital efficiency, Ins-Ra said in a press note.
It expects store additions to ease to nearly 7 per cent YoY in FY26 and 6 per cent YoY in FY27, even as retail area continues to rise by 9 per cent YoY in FY26 and by 9.5 per cent YoY in FY27, reflecting larger average store sizes and assortments designed to lift footfalls, average transaction values and sales per square foot.
Value and luxury segments are set to lead sector performance. Value formats benefit from GST rationalisation at lower price points, improved affordability, and rising private-label penetration, while luxury gains from a widening affluent base and deeper global-brand access.
Fast fashion continues to capture Gen-Z-led, content-driven demand. Casual and athleisure remain ahead of ethnic-casual and formal wear, in line with comfort- and lifestyle-led dressing trends.
Ind-Ra expects profitability to improve gradually as cost optimisation, better sourcing/mix, disciplined advertising and marketing promotions, and operating leverage offset residual pressures from expansion and fixed costs.
The working capital cycle for value retailers is likely to improve YoY in FY27, due to higher inventory turns and improved store level operating metrics.
Overall, as the consumption upturn broadens and retailers prioritise productivity over pace, Ind-Ra expects a stable, sustainable improvement in revenues and operating metrics for organised apparel retailers over FY26–FY27.
The luxury segment is also expected to benefit from an increase in target customer segment through widening affluent base and deeper global-brand access.
Mid-premium and several incumbent retailers witnessed slower growth in FY25, due to entry price mix-shifts and loss of market share to value retailers. This, coupled with investments in store format revamps, has stressed their margin profiles. Profitability pressures and a dip in inventory turns have slightly weakened credit metrics for segment players.
Fibre2Fashion News Desk (DS)
He was addressing the Canada-India Forum in Mumbai. He is on a four-day visit to India.
“This is an enormous opportunity for both our countries.. but it is one that is about to move to the next level. We should aim much higher, and we are aiming much higher, and to be more strategic in our partnership. And that’s why, immediately after my election last year, our government set out to renew our relationship with India,” he was cited as saying by Indian media outlets.
PM Mark Carney during the Canada-India Forum in Mumbai said Canada is negotiating a comprehensive economic partnership agreement with India to double bilateral trade to $50 billion by 2030.
It is expected to be signed by 2026 end.
Canada could also be India’s strategic partner in critical minerals and metals for the latter’s manufacturing, clean tech and nuclear industries, he noted.
As the visit’s focus is on core areas where both sides can work together to create more sovereignty, choice and prosperity, food and energy are the natural first choices, given Canada’s position as a food and energy superpower, Carney said.
It also extends to nuclear co-operation, from being the most reliable long-term supplier of uranium to building large-scale and small modular reactors, he said.
“We could also be India’s strategic partner in critical minerals and metals for your manufacturing, for your clean tech, and for your nuclear industries. And in the other respect, India can help us to double our grid with clean power by 2040,” he added.
India’s leadership in artificial intelligence (AI) and digital economy aligns well with Canada’s mission to develop and commercialise those technologies to deepen its defence innovation, Carney asserted.
In a separate set of agreements, Canadian Foreign Affairs Minister Anita Anand and his Indian counterpart S Jaishankar also exchanged several memoranda of understanding covering critical mineral cooperation, promotion of renewable energy use and cultural cooperation.
After India, Carney is scheduled to continue his tour with stops in Australia and Japan, according to the official itinerary released by his government.
Fibre2Fashion News Desk (DS)
This year’s gala theme, Threads of Impact, underscores the shared vision of FIT and Gap Inc. and recognizes Dickson’s legacy of brand reinvigoration, highlighting his career-long dedication to treating creativity as both a cultural force and a business imperative.
The Fashion Institute of Technology will honour Richard Dickson, president and CEO of Gap Inc., at its Annual Gala on April 14, 2026, at the Cathedral of St. John the Divine, New York City.
Celebrating his brand transformation leadership at Gap Inc. and Mattel, the event supports the FIT Foundation, which awarded over $3 million in scholarships in 2025.
“Gap Inc. is a house of iconic American brands guided by our purpose — to bridge gaps to create a better world. That includes bridging the opportunity gap. FIT embodies that same spirit, bringing education and industry together to unlock talent and expand what’s possible. We’re committed to opening doors, investing in emerging creatives, and building meaningful pathways into this industry for the next generation,” said Richard Dickson, President and CEO, Gap Inc. “I’m truly honored by this recognition and proud to champion the students and future leaders who will shape what’s next in design and fashion.”
“We are thrilled to celebrate Richard Dickson at FIT’s Annual Gala, in recognition of his remarkable achievements and leadership,” said FIT President Jason S. Schupbach. “Richard’s commitment to empowering the next generation reflects the heart of our mission—and inspires the entire FIT community. We are grateful for his generous support, as his work affirms what FIT has always shown: that when industry and education work as one, they are the catalyst for real-world change that shifts our culture.”
Dickson was appointed president and CEO of Gap Inc. in July 2023 and leads the company’s portfolio of iconic American brands, including Old Navy, Gap, Banana Republic, and Athleta. Before stepping into this role, he was the president and chief operating officer of Mattel, where he was a lead architect in a global corporate transformation that reinvigorated Mattel’s storied brands, including Barbie, Hot Wheels, and Fisher-Price, re-enforcing Mattel as a key industry leader and cultural cornerstone. He also served as executive producer of the Barbie movie. While at Mattel, Dickson was appointed to the Gap Inc. Board of Directors in November 2022.
Under his leadership, Gap Inc. is progressing into one of the most celebrated companies in fashion, where purpose and profit are aligned to matter, creating positive impacts for people and the planet. Throughout his career, Dickson has been a committed champion of this belief, earning recognition including The Elizabeth Taylor Commitment to End AIDS Award and the Chief Executives for Corporate Purpose Force for Good Award.
The FIT Annual Gala, attended by distinguished guests and alumni from the fashion and creative industries, benefits the FIT Foundation, which is dedicated to uplifting the next generation of FIT students. In addition to facilitating programs and developing new initiatives, the Foundation provided scholarships totaling more than $3 million in 2025.
Note: The headline, insights, and image of this press release may have been refined by the Fibre2Fashion staff; the rest of the content remains unchanged.
Fibre2Fashion News Desk (RM)
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