Retail Matters Podcast: The State of Fashion 2026: When the Rules Change

Fashion leaders heading into 2026 face a dramatically reshaped landscape defined by new US tariffs, shifting consumer spending toward value and wellbeing, and rapid advances in AI.

These pressures are part of broader systemic changes that The Business of Fashion and McKinsey have tracked for a decade, ranging from geopolitical shocks to supply chain disruptions and sustainability challenges. Executives now view constant change as the industry’s new normal, with “challenging” overtaking “uncertainty” as the dominant sentiment.

Nearly half expect conditions to worsen in 2026, especially in North America, though a growing minority see opportunities ahead, particularly as confidence in China begins to rebound. Overall, the industry’s central task will be adapting quickly to ongoing volatility across trade, consumer behavior and technology—agility will define the winners.