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McKinsey Global Fashion Index In this edition of the McKinsey Global Fashion Index, we deepen our exploration of economic profit — a measure of value creation that looks at a company’s profit less its cost of capital, thus taking into account how much each company invested to generate its performance. These are the facilities that do the cutting, sewing and finishing of garments in the final stages of production. However, value and discount retailers are also predicted to see continued growth. The interconnectedness of the industry is Our survey of 290 global fashion executives and interviews with thought leaders and pioneers have helped us identify ten key themes that will set the agenda in the year ahead. The West will no longer be the global stronghold for fashion sales. We use a multiphased approach—from diagnosis to implementation—to help clients make their sourcing decisions, increase end-to-end productivity of value chains, build strategic supplier partnerships, and integrate sustainability into their practices. On the other hand, there are several levers players are using to improve profitability, including efficiency drives, use of analytics to relieve markdown pressure and automation enabling faster speed to market. We advise across all functions along the value chain—consumer insights, value proposition, company strategy, product creation, supply chain, channels, and stores. distress. Economic profit, which factors in both explicit and implicit costs, was up by 4 percent. “Combined with the McKinsey Global Fashion Index (MGFI) analysis, which found that 56 percent of global fashion companies were not earning their cost of capital in 2018, we expect a large number of global fashion companies to go bankrupt in the next 12 to 18 months,” McKinsey warned. The good news for the industry is that 2017 was a record-breaking year for overall value creation among listed fashion companies, with aggregate economic profit reaching its highest levels for 10 years, after a steady decline between 2012 and 2016. our use of cookies, and Postmerger, we help clients identify and tap into the right synergies, build capabilities, shape new corporate cultures, and streamline integrations. For many in the fashion industry, the glass is half empty. Combined with the McKinsey Global Fashion Index (MGFI) analysis, which found that 56 percent of global fashion companies were not earning their cost of capital in 2018, we expect a large number of global fashion companies to go bankrupt in the next 12 to 18 months. Of … The report includes the third readout of our industry benchmark, the McKinsey Global Fashion Index. McKinsey Global Fashion Index (MGFI) forecasts growth of 3.5 to 4.5 percent for 2019, slightly below 2018 growth, predicted at 4 to 5 percent. Premium/bridge and mid-market players are most likely to struggle, in the face of strong competition from value/ discount players and increasing market saturation. In 2019, the predicted overall fashion industry’s growth was between 3.5% and 4.5%, according to the McKinsey Global Fashion Index. Notably, online players have yet to break into the elite group, with only two players in the top 20 percent and none in the absolute top 20. Copyright; 2020 Textile Focus. This is a global phenomenon that can be observed across industry sectors (beyond fashion), regions and cities, as outlined in McKinsey Global Institute’s recent “Superstars” study. Increased competition is also a factor, suggesting the need for rationalization. Our pricing approach is grounded in both our extensive apparel experience along with our application of repeatable analytics. The top 20 percent of companies attracted 128 percent of economic profit in 2017, compared with 144 percent in 2016. The latest reading of the McKinsey Global Fashion Index (MGFI), meanwhile, reveals new insights into fashion-company performance by category, segment, and region. But the rebound is not being felt evenly across the globe. ever before. This includes omnichannel readiness, inventory visibility, redesigning of the physical flow of goods from suppliers to consumers, demand forecasting, and order management. That’s why transparency is essential. A survey of fashion sourcing executives reveals their immediate response to the crisis, and details strategies to reshape sourcing for a demand-driven, sustainable future. The combination of today’s volatility, changing growth areas, and new technologies disrupting the global economy have given way to a more connected and discernible global fashion consumer than. The mood among respondents to our executive survey is sober across geographies and price points, and the pockets of optimism seen last year in … Prefacing the tough year ahead, the report notes that according to McKinsey Global Fashion Index analysis, the fashion industry is expected to … A darkening mood. During this time, their EBITA margins have been eroded by rising selling, general & administrative expenses (SG&A). Prospects for affordable luxury are likely to be more fragmented, with some regions expecting above-average growth (e.g., emerging and mature Europe and China), while others such as Japan, Latin America and North America underperform. The global fashion market is dominated by 20 companies, according to new research from management consultancy firm McKinsey & Company. For many in the fashion industry, the glass is half empty. Consumers, stuck at home worrying about their The McKinsey Global Fashion Index (MGFI) forecasts that global fashion industry growth will slow further — down to 3 to 4 percent — slightly below predicted growth for 2019. Use minimal essential Factors to consider for Retail considering the... Pakistan’s cotton export fall during last three... Vietnam wants India to move forward in textile. COVID-19 has sent shockwaves through the fashion industry’s global sourcing and production operations. This was driven by a particularly strong upswing in revenue growth for publicly listed companies, resulting in improvements in capital efficiency as invested capital grew at a slower pace than revenues. Drawing on data including executive surveys, the report casts a bleak outlook for next year, forecasting a 3 to 4 percent decrease in global, fashion industry growth. Home » Fashion Industry » Global Fashion Index. Through digitizing processes and consumer-data analysis, we apply insights to merchandising and right-sizing of assortments to ensure consumer centricity is top of mind. Over that period, the industry has grown at 5.5 percent annually, according to the McKinsey Global Fashion Index, to now be worth an estimated $2.4 trillion. However, after a period of accelerating out performance, leaders in 2017 gave up some of their advantage. We see Latin America (in particular Brazil), Middle East and Africa and Russia experiencing more economic and political challenges that are likely to dampen their consumer spending. Two of three new entrants to an exclusive club of 20 high performing fashion companies are Chinese, according to the 2020 edition of The State of Fashion report released today by BoF and McKinsey. Press enter to select and open the results on a new page. Well-known European luxury companies tended to be over represented in the top 20, with North American companies coming in a close second. The interconnectedness of the industry is making it harder for businesses to plan ahead. Jewelry and watches, on the other hand, may struggle in many markets as rental models start to replace traditional sales. The report speculates that to be successful in the new year, apparel retailers need to think ‘outside-the-clothes’ and create an online persona that is AI-driven and socially relevant. Our global team of experts includes former product, merchandising, sales, and supply-chain managers from renowned apparel, fashion, and luxury companies. But the rebound is not being felt evenly across the globe. It is a fascinating list; it’s also a diverse list—lots of different types of companies in there. Given the ongoing uncertainty, our predictions for industry performance next year are focused on two scenarios. The report includes the third readout of our industry benchmark, the McKinsey Global Fashion Index. Developed by Marketo Services, Our intelligent team curate fresh news & updates to entertain our valued audience. Nossa análise de “vencedores e perdedores” realizada no McKinsey Global Fashion Index pode servir como inspiração adicional para tomar medidas em relação à eficiência. These are the facilities that do the cutting, sewing and finishing of garments in the final stages of production. But the rebound is not being felt evenly across the globe. Our pioneering expertise and global network enable our Apparel, Fashion & Luxury clients to drive change and flourish in a fast-moving and unpredictable industry. Never miss an opportunity again. En ella informa sobre las inversiones y la creación de valor de las empresas, las pérdidas ocasionadas por el Covid-19 y la evaluación de sus cotizaciones en Bolsa. Laut Prognose des McKinsey Global Fashion Index (MGFI) wird das Umsatzwachstum in der Modebranche 2020 weiter zurückgehen auf 3 bis 4% und damit leicht unter die Prognosen für 2019 fallen. Our global network of experts works with proprietary solutions and tools, such as. We have done some analyses based on the MGFI (McKinsey Global Fashion Index) that show there will be around EUR 35 billion to 45 billion in overstock from the spring/summer 2020 season. Our partnerships with leading IT companies help to optimize and accelerate clients’ processes from planning through distribution to better manage costs and inventory along the way. The latest reading of the McKinsey Global Fashion Index (MGFI), meanwhile, reveals new insights into fashion-company performance by category, segment, and region. According to the report, the global fashion market is dominated by 20 companies which account for 97 per cent of global economic profit in the retail sector. Their average top-line growth is four times higher than that of other fashion players, but this tends to translate only into valuation multiples (twice as high as average) while profitability still lags behind. That’s why transparency is essential. The lenses are industry and regional performance, market segment performance, product category performance and overall operating profit performance. Further, rising transparency may increase the pressure on prices, and there is limited room for further cost cutting following recent initiatives. McKinsey Global Fashion Index. these would be challenging times. Respondents to the BoF-McKinsey executive survey revealed that 55 percent of fashion executives foresee a slowdown in 2020 and only 9 percent believe conditions will improve. A darkening mood. We assess international growth potential through initial market screening, creation and selection of a value proposition, development of a detailed market-entry plan, and design of the regional country organization. A darkening mood. Indeed, according to McKinsey Global Fashion Index analysis, fashion companies will post approximately a 90 percent decline in economic profit in 2020, after a 4 percent rise in 2019. The most resilient winners included luxury, sportswear and fast fashion players, reinforcing the point that brand investment and operational efficiency are key drivers of sustainable business models. Die Sorgen steigen angesichts der allgemeinen … Transparency does not equal sustainability. 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