The fashion market, excluding the luxury sector, will struggle to deliver significant growth in 2023. Europe, on the other hand, is under high pressure from currency rates and a growing energy crisis, which are likely to result in modest sales growth for the luxury sector (projected to grow between 3 and 8 percent). Based on McKinsey’s analysis of fashion forecasts, the luxury sector is expected to grow between 5 and 10 percent in 2023, driven by strong momentum in China (projected to grow between 9 and 14 percent) and in the United States (projected to grow between 5 and 10 percent). Looking forward, we anticipate that the luxury sector will outperform the rest of the industry, as wealthy shoppers continue to travel and spend, and thus remain more insulated from the effects of hyperinflation. This article is a collaborative effort by Imran Amed, representing views from the Business of Fashion, and Sarah André, Anita Balchandani, Achim Berg, and Felix Rölkens, representing views from McKinsey’s Retail Practice.
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