The State of Fashion 2026

Fashion leaders have moved past uncertainty, but challenges including economic volatility, evolving consumer priorities, and rapid technological disruption demand more agility and stronger capabilities to succeed in the year ahead.

the-state-of-fashion-2026_feb.pdf

Download PDF • 12.59MB

As fashion executives look to 2026, they are contending with a fundamentally new reality. US tariffs have redrawn trade maps and forced brands and their suppliers to rapidly adjust. Consumers continue to rethink their spending, seeking value and devoting more of their budgets to achieve other goals, including their own well-being and longevity. The swift onset of AI, meanwhile, means fashion businesses find themselves in a rapidly changing technological landscape.

While the ongoing disruptions may feel daunting, they are in fact part of a wider set of longer-term systemic shifts. The Business of Fashion and McKinsey have been tracking global economic dislocations, shifting consumer preferences, and changes to the fashion system in The State of Fashion reports for ten years now. The publication of our first report in 2016 coincided with the Brexit vote in the United Kingdom and the first election of Donald Trump as president of the United States. Since then, we have examined the impact of a once-in-a-generation pandemic, global supply chain upheaval, and the industry’s track record on sustainability, among many other macro themes.

Whereas in previous years fashion leaders, facing the volatility of global affairs, weren’t certain about what lay ahead, now they seem to have accepted that constant change is simply the new normal. “Challenging” has overtaken “uncertainty” as the word executives polled in the annual Business of Fashion–McKinsey State of Fashion Executive Survey used most frequently to describe the industry in 2026, with tariffs cited as the number-one hurdle.

Perhaps unsurprisingly, then, many leaders are feeling pessimistic. This year, 46 percent said they expect conditions to worsen in 2026, compared with 39 percent in last year’s survey. By geography, 36 percent viewed North America as unpromising or very unpromising, double last year’s share.

But not everyone is so downbeat. Among those polled, 25 percent believe industry conditions will improve, up from 20 percent in 2025, suggesting some players see pockets of opportunity. Sentiment toward China is finally picking up, even as conditions remain difficult: 28 percent viewed the market there as unpromising in 2026, down from 41 percent heading into 2025.

The industry’s main agenda in 2026 will be adapting to a new environment where trade, consumer behavior, and technology remain in rapid flux. Agile brands that can adapt quickly are likely to emerge as the winners.