Nearly three quarters of fashion executives expect to hike prices next year as tariffs and rising costs weigh on the industry, according to a report by McKinsey & Co.

That’s a big jump from a year earlier when only about half of executives said they expected to raise prices, McKinsey’s data shows. The price increases will seek to offset higher tariffs and costs, according to McKinsey. 

McKinsey also projects that industry growth will remain muted for the year as “heightened macroeconomic volatility is expected to continue to weigh on sentiment and drive value-conscious consumer behaviour.” 

Consumers have pulled back in recent months and prioritised essential purchases as rising costs across the economy erode discretionary spending. A number of fashion and apparel brands have said they’ll raise prices in recent earnings reports. 

In September, American Eagle Outfitters Inc. chief financial officer Mike Mathias said that raising pries is “one tool in the kit” that will be used to compensate for higher expenses. The retailer will also look to optimise where it’s producing its products as well as negotiate with suppliers and seek lower freight costs. 

Earlier this month, Ralph Lauren Corp. chief financial officer Justin Picicci told investors that the company is making “modest adjustments” to prices for the brand’s fall and spring 2026 line-ups in response to higher tariffs. 

McKinsey projects a modest improvement next year for luxury goods following a “difficult” 2025. “High prices remain a significant hurdle for aspirational customers,” according to McKinsey, which noted that many would-be luxury shoppers are focusing on personal wellness and health instead.