Fashion retail is at a tipping point: thriving depends on reinvention, not scale

A sector under pressure: key figures

The apparel industry faces structural and macroeconomic shocks:

• Since 2019, entry-level fashion stores have decreased by 26% in France.
• Retail layoffs in the U.S. surged +274% in early 2025.
• Insolvencies are rising: 1,422 procedures in France in 2024.

Margins are squeezed by soaring costs: textile raw materials have risen by 70% in five years, energy prices have peaked at €1,130/MWh. Meanwhile, consumer spending remains 7% below 2019 levels.

New models reshaping the industry

Legacy models based on seasonal collections and physical networks are losing ground. Emerging paradigms include:

• DNVBs (Digital Native Vertical Brands): Fully integrated, digital-first brands achieve high gross margins and strong customer retention by controlling the entire value chain.
• DTC (Direct-to-Consumer) pre-orders: Brands reduce returns and optimize production costs by selling directly to consumers and producing items only after demand is confirmed.
• Circular fashion: Offering resale, repair, and donation services allows companies to extend the lifecycle of products and align with sustainability objectives.
• Drop model: Scarcity-driven, limited releases create urgency and a sense of exclusivity among consumers.
• Community-driven co-creation: Engaging customers in product design or decision-making helps minimize waste while increasing loyalty and engagement.

Brick-and-mortar: from weakness to advantage

Physical retail networks have underutilised assets that can become powerful drivers of competitiveness when strategically activated:

• Transform stores into omnichannel hubs for click & collect, returns, and personalised services.
• Activate customer data for hyper-personalised experiences, from VIP drops to predictive clienteling.
• Embed sustainability and community engagement to rebuild desirability and comply with upcoming anti–fast fashion regulations.

Scale no longer guarantees success. Reinvention, anchored in agility, data, and purpose, is an imperative for retail leaders.

How Eight Advisory can support you

Explore our full point of view on apparel retail reinvention and discover how we support the sector.