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Fashion industry’s profits hemmed in by the COVID-19 pandemic

The fashion industry’s economic profit rose year-on-year by 4 percent in 2019. Our calculations suggest that it will fall by 93 percent this year, according to our latest State of Fashion report, written in partnership with the Business of Fashion.

Global fashion industry profit rises from 2016 to 2019, then drops 93% in 2020.

The global fashion industry's profit is expected to fall by 93 percent in 2020.

Total economic profit, index (100 = 2016)

After a three-year rise, economic profit is predicted to drop in 2020. Based on a 2016 index of 100, profit values are:

  • 100 in 2016
  • 135 in 2017, a 35% rise from 2016
  • 163 in 2018, a 21% rise from 2017
  • 169 in 2019, a 4% rise from 2018
  • 11 in 2020, a 93% drop from 2019

Notes:

Source: McKinsey Global Fashion Index

McKinsey & Company

To read the report, see “The State of Fashion 2021: In search of promise in perilous times,” December 1, 2020.