Out of the fashion leaders polled in the 2025 BoF-McKinsey State of Fashion Executive Survey, “uncertainty” was the most common sentiment.
Just 20 percent of respondents expected market conditions from 2024 to improve, while 41 percent expected conditions to remain the same and 39 percent expected them to worsen. Consumer confidence and appetite to spend was considered the greatest risk to growth in the fashion industry in 2025, followed by geopolitical instability and economic volatility.
At this time of economic uncertainty, geographic disparities and shifting customer behaviour, technology company Lectra seeks to address challenges and opportunities facing the global fashion market and value chain in its latest white paper, “Meeting the Moment”.
Lectra offers industrial intelligence solutions that facilitate digital transformations in the fashion, automotive and furniture industries — providing an interconnected approach for growth, profitability and sustainability that is leveraged by more than 21,000 suppliers and manufacturers. The company estimates around one-third of clothing worldwide is designed with Lectra software.
The paper examines how brands should re-evaluate the full value chain with a focus on the convergence of digital transformation, sustainability imperatives and evolving consumer expectations — from the creation to manufacturing and marketing of products.
Lectra’s expertise in this space, with additional insights from its chief strategy and product officer Maximilien Abadie, is combined with interviews of experts and executives from the American Apparel & Footwear Association, Boucheron and London College of Fashion.
Below, BoF shares extracts from Lectra’s report, distilling key themes alongside BoF’s own analysis.
Navigating a Fundamentally Different World
BoF: At the start of 2025, a long-feared cyclical slowdown arrived. Consumers, scarred by the recent period of high inflation, have become increasingly price sensitive. There is also the surprising rise of dupes, the acceleration of climate change and the continued reshuffling and disruption to global trade, with ongoing uncertainty around the impact of tariffs imposed by the US.
Consequently, 2025 is likely to be a time of reckoning for many brands. The upshot is that there is still opportunity for brands that move nimbly and are quick to adapt to upheavals in a chaotic marketplace. Not all brands are equally adept at making these pivots. Often, it is newer, “challenger” brands, unburdened by historic conceptions about products, stores and customers, that are coming out on top.
Lectra: Over the last few years, fashion has been reconfiguring itself internally at the same time that historic shifts are taking place all around it.
Where, in the past, brands might have needed to recalibrate their routes to market, relocate their sourcing bases, rethink the way they sell their products, re-evaluate the competitive landscape, or realign their planning to meet demand, in 2025 all of those mandatory transformations (and more) are happening at once. And being able to strategise and execute across all of those domains simultaneously is what distinguishes a brand’s ability to not just survive an unprecedented moment, but to differentiate itself through digitisation.
For example, while brand and retail organisations were beginning to settle on retail strategies that maximised the potential of different digital and physical channels in markets, […] new digital-native entrants from unexpected overseas markets stepped in and started to redefine consumer expectations for speed, price, and availability.
Regulation is not a one-way street […] — consumer markets and other stakeholders are highly likely to still hold fashion brands and their partners to high bars for ethical and environmental action.
As new, digital-native competitors [have] extended their reach further into different market segments, more fashion businesses found their models under threat. Unable to compete directly on cost or convenience, they needed to find new competitive advantages, quickly build a more comprehensive and more granular understanding of their consumers, and generally find ways to protect or recapture markets they previously thought were secure.
Consolidating Fragile Supply Chains
BoF: Supply chain disruption resurfaced this year in the State of Fashion report as one of the top five risks to growth in the fashion industry.. Indeed, trade barriers and supply disruptions have increased five-fold since 2015, with around 3,000 trade restrictions imposed in 2023 alone.
Global trade is shifting as major economies diversify and source from countries where they have more political alignment — a shift set to accelerate as costs continue to rise, trade policies evolve and sustainability targets change. As a result, fashion brands are likely to double down on diversifying their sourcing footprint in Asia and lay the foundations for nearshoring.
Supply chains need to become more agile, with companies making efforts to reduce excess inventory and minimise the risk of shortfalls. Margin pressures, as well as pressures from governments around the world to reduce emissions and fashion waste, are driving advances in inventory management. New technology will aid these efforts.
Lectra: Brands built on heritage and craft now need to ensure that the specialised knowledge and traditional skills they require are safeguarded, supported, and their expertise digitised and centralised. This is something that luxury companies in particular have made a top priority when it comes to investing in technology and transformation.
To meet these downstream shifts head-on, at speed, fashion organisations must now also evolve their supply chains to align with those regionalised and increasingly granular and discerning consumer expectations – not just improving the way they sense demand, but how they are set up, upstream, to respond to it.
Today, high-volume production and mass-manufacturing capabilities and capacity have become heavily concentrated in specific regions. This represents a risk to competing brands that are all seeking to source from a common pool of suppliers, and elevates the importance of supply chain diversification and agility.
Raising the Bar on Sustainability
BoF: This year, in an environment where growth may be constrained, the focus on sustainability has faded from executive priority with attention now on other opportunities, such as brand differentiation and offering new designs to capture market share.
Shoppers have proven less willing than hoped to pay extra for planet-friendly products, making the business case for sustainability less obvious to executives. However, the mounting cost of climate change, and government action to combat it, mean sustainability must remain at the top of the agenda.
Those who choose to approach sustainability with a long-term mindset, even while battling short-term problems, will be rewarded with more efficient business operations and a competitive advantage. Leaders who move quickly to identify the bright spots, whether they are geographic, demographic or technological, will be primed for success, but only if they’re able to evolve.
Lectra: Today, compliance with a complex tapestry of shifting regional regulations is the most visible challenge.
As an example, digital product passports (DPPs) have become a clear target for fashion companies doing business in the European Union, with the central proposal being a digital record that will need to contain accurate, accountable information about any textile and product’s provenance and impact. Brand and retail businesses have been investing towards that target for some time, in anticipation of a roll-out in early 2027.
But despite now having a measurable impact on fashion’s bottom lines and its process and technology investment strategies, sustainability regulation itself is still very much in flux – and key targets are prone to changing unpredictably.
Brands built on heritage and craft now need to ensure that the […] traditional skills they require are safeguarded […] and their expertise digitised and centralised.
In 2025 alone, the recent “EU Omnibus,” which aims to simplify sustainability and traceability reporting rules for a range of different industries, has tempered and toned down some of the expected restrictions that were set to be imposed by legislations like the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD). Similar changes to the scope and the shape of broader sustainability rules have also been proposed in the United States, with the government citing environmental disclosure “deregulation” as a lever for growth.
Regulation is not a one-way street, and in the longer term, consumer markets and other stakeholders are highly likely to still hold fashion brands and their partners to high bars for ethical and environmental action.
Focusing on Interconnectivity Versus Isolated Innovation
BoF: Inventory remains a challenge for the industry as excess stock and stocks-outs impact brands — and the fashion industry produced between an estimated 2.5 billion and 5 billion items of excess stock in 2023, worth between $70 billion and $140 billion in sales.
In 2025, margin pressures and sustainability regulation will continue to place greater emphasis on end-to-end planning excellence, with brands increasingly adopting tech tools and adjusting their operating model to support agile supply chains.
Brands should adopt digital solutions to enable efficiency and collaboration. To unlock the full value of these tools, fashion brands and manufacturers will need to embrace digital tools across their value chain, and prioritise process redesign, data quality enhancement and the integration of planning systems to provide visibility for all parties across the value chain.
Lectra: Data created during one stage of the product journey is seamlessly made available to the next step and every subsequent step. Rather than being a series of siloes and discrete solutions, the “Create”, “Manufacture”, and “Market” stages are identifiable parts of a cohesive whole that covers the entire lifecycle — with common processes, workflows, and data that flows from one domain to the next.
“With the challenges faced by fashion players today, it simply will not work for a brand to focus only on improving the way they create products without also elevating the way they manufacture those products and the way they market them,” explains Maximilien Abadie of Lectra.
“These elements all need to be approached as a whole, with a central point of business-wide collaboration that bridges and connects them all, so that the decisions being made in creation, manufacturing, and marketing support the ultimate outcomes of the company.”
This same shift also makes it possible for new solutions to exist that can transcend those different domains and provide value throughout the extended ecosystem. The TextileGenesis platform, which can provide full visibility and accountability across the extended lifecycle, as well as the essential building blocks for traceability and regulatory compliance, is an example of how interconnectivity between domains, applications, and data can fuel a fundamentally different way of working.
This is a sponsored feature paid for by Lectra as part of a BoF partnership.
