Global fashion sales are set to surpass 2019 levels by 3 per cent to 8 per cent in 2022, according to McKinsey and fashion media company The Business of Fashion.
The industry’s recovery is set to be strongest across China and the US, with Europe lagging behind, according to the report, which interviewed top industry executives and surveyed more than 220 international fashion executives and experts.
Supply chain pressures will be the main challenge for the industry, posing a risk to the pace of the recovery, with 49 per cent of fashion executives citing supply chain disruptions as the leading factor that could impact their businesses in 2022, the report found.
We are emerging from the worst crisis the industry has ever seen
Achim Berg,
senior partner and global leader of apparel, fashion and luxury, McKinsey
The global personal luxury goods market could shrug off the hit from the coronavirus crisis as early as this year as Chinese and US shoppers help sales recover to pre-pandemic levels, Bain & Company said in May. The market could generate €280 billion ($324.46bn) to €295bn in sales this year.
“We are emerging from the worst crisis the industry has ever seen. Value destroyers [those that delivered negative economic profit] hit new depths of losses – the share of value destroyers is estimated to be [a] record high 69 per cent of listed companies in 2020,” Achim Berg, senior partner and global leader of apparel, fashion and luxury at McKinsey, said.
“Industry profits continued to concentrate within a few players. That’s why when looking ahead with the prospect of normalisation, it is even more important that players in the industry pursue five key topics in 2022: growth and innovation, margin control, flexibility and resilience, sustainability strategy and digital frontiers.”
The industry's profitability contracted in 2020 for the first time in at least a decade, leading to all-time high levels of consolidation last year and in 2021, according to the McKinsey Global Fashion Index.
However, the index showed the fashion industry’s recovery looks set to be V-shaped, as performance in the first half of 2021 points to a possible return to profitability by 2022, according to the report.
A combination of material shortages, transportation bottlenecks and rising shipping costs will further inflate input costs, consequently forcing businesses to increase prices for consumers, the report said.
“Businesses must deal with major issues within the supply chain where rising costs and logistical bottlenecks will mean pressures are passed onto the consumer in the form of price hikes and delays,” Imran Amed, founder and chief executive of The Business of Fashion, said.
“Businesses must look at their supply chain models and focus on making these as flexible and resilient as possible to navigate the year ahead.”
About 67 per cent of businesses expect to increase retail prices next year, with an average uplift of 3 per cent, while 15 per cent of executives even expect to increase prices by 10 per cent or more, the research found. Also, 87 per cent of fashion executives expect supply chain disruptions to negatively impact margins next year.
Sustainability also ranks high on the global fashion industry’s agenda, with 60 per cent of businesses ramping up investment in closed-loop recycling solutions to reduce environmental impact, according to the McKinsey report.
At present, less than 10 per cent of the global textile market is composed of recycled materials, according to the non-profit organisation Textile Exchange.
It will require industry-wide investment to scale closed-loop recycling technologies and processes that could enable businesses to reduce their impact on the environment, the report suggested.
Meanwhile, fashion brands looking to engage with high-value young consumers must explore the potential of non-fungible tokens (NFTs), gaming and virtual fashion as new routes to commerce, the McKinsey research suggested.
About 32 per cent of executives surveyed identified digital as the biggest opportunity for growth, while 37 per cent cited social commerce as one of the top three themes that will impact their business in 2022, the research found.
International tourism will not fully recover until at least 2023, the report said. To compensate for the loss of international shoppers, luxury brands should engage further with domestic consumers to capture a bigger share of the domestic market, McKinsey suggested.
Also, businesses face more threats of cyber attacks and risks of improper data handling than ever before. Fashion players must, therefore, urgently invest to make digital security a strategic imperative, the report said.
About 53 per cent of fashion executives said it is likely or very likely their company will experience a significant cyber attack in 2022, according to McKinsey.
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
UAE currency: the story behind the money in your pockets
THE SPECS
Engine: 4.4-litre V8
Transmission: Automatic
Power: 530bhp
Torque: 750Nm
Price: Dh535,000
On sale: Now
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
PLAY-OFF%20DRAW
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UFC%20FIGHT%20NIGHT%3A%20SAUDI%20ARABIA%20RESULTS
%3Cp%3E%0D%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EMain%20card%3Cbr%3EMiddleweight%3A%3C%2Fstrong%3E%0D%3Cbr%3ERobert%20Whittaker%20defeated%20Ikram%20Aliskerov%20via%20knockout%20(Round%201)%0D%3Cbr%3E%3Cstrong%3EHeavyweight%3A%3C%2Fstrong%3E%0D%3Cbr%3EAlexander%20Volkov%20def%20Sergei%20Pavlovich%20via%20unanimous%20decision%0D%3Cbr%3E%3Cstrong%3EMiddleweight%3A%3C%2Fstrong%3E%0D%3Cbr%3EKelvin%20Gastelum%20def%20Daniel%20Rodriguez%20via%20unanimous%20decision%0D%3Cbr%3E%3Cstrong%3EMiddleweight%3A%3C%2Fstrong%3E%0D%3Cbr%3EShara%20Magomedov%20def%20Antonio%20Trocoli%20via%20knockout%20(Round%203)%0D%3Cbr%3E%3Cstrong%3ELight%20heavyweight%3A%3C%2Fstrong%3E%0D%3Cbr%3EVolkan%20Oezdemir%20def%20Johnny%20Walker%20via%20knockout%20(Round%201)%0D%3Cbr%3E%3Cstrong%3EPreliminary%20Card%0D%3Cbr%3ELightweight%3A%3C%2Fstrong%3E%0D%3Cbr%3ENasrat%20Haqparast%20def%20Jared%20Gordon%20via%20split%20decision%0D%3Cbr%3E%3Cstrong%3EFeatherweight%3A%3C%2Fstrong%3E%0D%3Cbr%3EFelipe%20Lima%20def%20Muhammad%20Naimov%20via%20submission%20(Round%203)%0D%3Cbr%3E%3Cstrong%3EWelterweight%3A%3C%2Fstrong%3E%0D%3Cbr%3ERinat%20Fakhretdinov%20defeats%20Nicolas%20Dalby%20via%20split%20decision%0D%3Cbr%3E%3Cstrong%3EBantamweight%3A%3C%2Fstrong%3E%0D%3Cbr%3EMuin%20Gafurov%20def%20Kang%20Kyung-ho%20via%20unanimous%20decision%0D%3Cbr%3E%3Cstrong%3ELight%20heavyweight%3A%3C%2Fstrong%3E%0D%3Cbr%3EMagomed%20Gadzhiyasulov%20def%20Brendson%20Ribeiro%20via%20majority%20decision%0D%3Cbr%3E%3Cstrong%3EBantamweight%3A%3C%2Fstrong%3E%0D%3Cbr%3EChang%20Ho%20Lee%20def%20Xiao%20Long%20via%20split%20decision%3C%2Fp%3E%0A
End of free parking
- paid-for parking will be rolled across Abu Dhabi island on August 18
- drivers will have three working weeks leeway before fines are issued
- areas that are currently free to park - around Sheikh Zayed Bridge, Maqta Bridge, Mussaffah Bridge and the Corniche - will now require a ticket
- villa residents will need a permit to park outside their home. One vehicle is Dh800 and a second is Dh1,200.
- The penalty for failing to pay for a ticket after 10 minutes will be Dh200
- Parking on a patch of sand will incur a fine of Dh300
Killing of Qassem Suleimani
MATCH INFO
Inter Milan 1 (Martinez 18' pen)
Juventus 2 (Dybala 4', Higuain 80')
Tips for job-seekers
- Do not submit your application through the Easy Apply button on LinkedIn. Employers receive between 600 and 800 replies for each job advert on the platform. If you are the right fit for a job, connect to a relevant person in the company on LinkedIn and send them a direct message.
- Make sure you are an exact fit for the job advertised. If you are an HR manager with five years’ experience in retail and the job requires a similar candidate with five years’ experience in consumer, you should apply. But if you have no experience in HR, do not apply for the job.
David Mackenzie, founder of recruitment agency Mackenzie Jones Middle East
The Facility’s Versatility
Between the start of the 2020 IPL on September 20, and the end of the Pakistan Super League this coming Thursday, the Zayed Cricket Stadium has had an unprecedented amount of traffic.
Never before has a ground in this country – or perhaps anywhere in the world – had such a volume of major-match cricket.
And yet scoring has remained high, and Abu Dhabi has seen some classic encounters in every format of the game.
October 18, IPL, Kolkata Knight Riders tied with Sunrisers Hyderabad
The two playoff-chasing sides put on 163 apiece, before Kolkata went on to win the Super Over
January 8, ODI, UAE beat Ireland by six wickets
A century by CP Rizwan underpinned one of UAE’s greatest ever wins, as they chased 270 to win with an over to spare
February 6, T10, Northern Warriors beat Delhi Bulls by eight wickets
The final of the T10 was chiefly memorable for a ferocious over of fast bowling from Fidel Edwards to Nicholas Pooran
March 14, Test, Afghanistan beat Zimbabwe by six wickets
Eleven wickets for Rashid Khan, 1,305 runs scored in five days, and a last session finish
June 17, PSL, Islamabad United beat Peshawar Zalmi by 15 runs
Usman Khawaja scored a hundred as Islamabad posted the highest score ever by a Pakistan team in T20 cricket
Essentials
The flights
Etihad (etihad.ae) and flydubai (flydubai.com) fly direct to Baku three times a week from Dh1,250 return, including taxes.
The stay
A seven-night “Fundamental Detox” programme at the Chenot Palace (chenotpalace.com/en) costs from €3,000 (Dh13,197) per person, including taxes, accommodation, 3 medical consultations, 2 nutritional consultations, a detox diet, a body composition analysis, a bio-energetic check-up, four Chenot bio-energetic treatments, six Chenot energetic massages, six hydro-aromatherapy treatments, six phyto-mud treatments, six hydro-jet treatments and access to the gym, indoor pool, sauna and steam room. Additional tests and treatments cost extra.
Calls
Directed by: Fede Alvarez
Starring: Pedro Pascal, Karen Gillian, Aaron Taylor-Johnson
4/5
The candidates
Dr Ayham Ammora, scientist and business executive
Ali Azeem, business leader
Tony Booth, professor of education
Lord Browne, former BP chief executive
Dr Mohamed El-Erian, economist
Professor Wyn Evans, astrophysicist
Dr Mark Mann, scientist
Gina MIller, anti-Brexit campaigner
Lord Smith, former Cabinet minister
Sandi Toksvig, broadcaster
UAE currency: the story behind the money in your pockets
