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Jan 2017
Fashion is one of the last decade’s rare economic success stories. Over the period, the industry grew 5.5 per cent annually, to now be worth an estimated $2.4 trillion.… Yet, 2016 was one of the industry’s toughest years.

Terrorist attacks in France, the Brexit vote in the UK and the volatility of the Chinese stock market have created shocks to the global economy. At the same time, consumers have become more demanding, more discerning and less predictable in their purchasing behaviour.…

Yet, this sluggish overall growth masks some big winners: affordable luxury, value, and athletic wear.

With respect to sales growth, the affordable luxury and value sectors outperformed all other segments by one to oneand-a-half percentage points. This is consistent with their compound annual growth rate over the last three years, which has been 9 per cent for affordable luxury and 6 per cent for value, the highest of any segment since 2013.

Affordable luxury players benefited from consumers trading down from luxury, particularly among Chinese consumers. However, their profit margins are expected to decline, especially after 2016, because of a pricing arbitrage disadvantage across geographies and fluctuating foreign exchange rates.

The value segment continued to grow in 2016, particularly as a consequence of large global players expanding geographically. With its clearly defined value proposition, the value segment has been taking share from discount this year.Read more at: |
judy smith
Written by
judy smith
     ---, Bluekill and Elizabeth Squires
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