The fashion industry, a sector that is used to living in uncertainty, is set to face a myriad of challenges and reform in coming years – specifically concerning a strained economy, geopolitics, the macroeconomic environment in all large markets as well as legislation around sustainability labor issues, as per an article published by Modaes.
The first challenge is the general slowdown of the global economy and as the fashion industry is usually the first to suffer cuts in spending, the consequences are already being noticed in the US, with listed fashion companies recording sales declines in 2Q 2023.
Geopolitical issues are also adding to industry pressures, specifically the war in Ukraine impacting the Russian market, which is one of the largest for Spanish companies. Meanwhile the upcoming 2024 US presidential election and the potential development of a trade war in China is also intensifying industry uncertainties.
Consumption trends are also falling in Spain, with the weakening of the European economy and loss of purchasing power of families due to inflation and tightening of bank financing conditions. However, despite these challenges, the Bank of Spain remains optimistic about the future of household consumption – major reasons being strengthening employment rates and indicators of inflation relaxation.
Looking ahead to fashion reform
As the industry deals with various economic challenges, they will also need to navigate new legislations centered around sustainability. A specific and important milestone for the European fashion industry is the implementation of the expanded producer responsibility (RAP) which will force brands to assume the collection, separation and management of waste by 2025.
France, Sweden and the Netherlands already have RAP protocols in force, and several large Spanish companies have already established their RAP system (SCRAP). In addition to this, European fashion brands will also be required to implement ecodesign and green declarations for products and will be prohibited from using “greenwashing” practices that falsely market and label products as sustainable.
Meanwhile, in Spain, labor issues have become the focus of the first state agreement on textile trade negotiated by Arte (the Spanish Textile Retail Association). The agreement will apply to sector chains, including textiles and footwear, clothing and household products.