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Apparel, Fashion & Luxury

Our pioneering expertise and global network enable our apparel, fashion, and luxury clients clients to drive change and flourish in a fast moving and unpredictable industry.

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 ever before. As the pace of industry change accelerates, having innovative and sustainable business models is increasingly important.

>1000

apparel, fashion, and luxury projects

in the last five years, spanning producers and brands, vertical-fashion retailers, apparel-multibrand retailers, department stores, and luxury-goods companies

>100

experts

including former product, merchandising, sales, and supply-chain industry leaders

What we do

We advise all services along the value chain: consumer insights, value proposition, strategy, product creation, supply chain, channels, and stores.

Digital strategy

We cocreate digital strategies with our clients to identify value down to e-commerce subchannels; achieve growth through personalization; set up omnichannel experience and direct-to-consumer acceleration programs; manage data and advanced-analytics transformations; and lead projects into successful execution with pilots and digital roadmaps for implementation. Our workshops tap into proprietary solutions and tools to pressure test outcomes through interactive formats like wargaming.

International growth

We assess international growth potential through initial market screening, value-proposition creation and selection, detailed market-entry plan development, and regional-country organization design. Our global network of experts works with proprietary solutions and tools to generate in-depth consumer insights from both qualitative- and quantitative-research methods.

Pricing and promotions

Our pricing approach is grounded in both our extensive apparel experience along with our application of repeatable analytics. One way we do this is through our proprietary solution, Periscope Price Advisor, which is used to guide apparel companies through the forecasting, markdown, pricing, and promotion decisions they need to make throughout a product's life cycle to maximize margin.

Speed and merchandising

We help accelerate end-to-end product creation and increase in-season response by redesigning the product-creation calendars. This helps streamline processes and clarify roles and responsibilities within an organization. Through process digitization and consumer-data analysis, we apply insights to merchandising and right-sizing of assortments to ensure consumer centricity. On top, we build actionable, consumer-centric merchandising frameworks and help embed capabilities.

Omnichannel-supply chain

We help organizations define and implement an omnichannel supply-chain strategy that balances four key tradeoffs—agility, flexibility, sustainability, and value—and is anchored in the consumer and customer experience. These focus areas include assessing end-to-end omnichannel readiness; optimizing integrated business-planning processes and capabilities across merchandising, allocation, supply chain, and finance teams; redesigning the physical distribution center and store footprint; and transitioning technology infrastructure to service and achieve a segmented omnichannel strategy.

Sourcing

We use a multiphase 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. To do this, we tap into our network of global sourcing centers, international design-to-value labs, and our Digital Capability Center in Aachen that focuses on textile manufacturing.

Restructuring and transformation

Through our restructuring work, we support companies in distress or crisis by optimizing cash and liquidity, addressing balance-sheet issues, and implementing rapid strategic and operational improvements. For our transformation work, we apply a proven recipe to significantly improve both performance and health. This includes holistically applying a full-potential mindset across top- and bottom-line levers, building capabilities, and putting the requirements in place to enable relentless execution.

Postmerger management

Postmerger, we help companies identify and tap into the right synergies, build capabilities, shape new corporate cultures, and streamline integrations. With value creation as our primary goal, we tailor the integration approach and pace it according to each client’s unique needs by assessing and aligning organizational compatibility to minimize any potential pain points along the way.

Sustainability

We combine in-depth knowledge about the fashion industry and environmental, social, and governance topics to help our clients identify the most impactful levers toward sustainable business operations from product design, sourcing, and garment manufacturing to circular business models. Our dedicated team publishes extensive research on sustainability and the circular economy and works on providing new assessments and reports for the industry to track and follow the latest developments.

Featured capabilities

Design-to-Value
In an environment of increasing consumer demands and complexity, design-to-value (DtV) 4.0 drives bottom-line impact. Digital assets consider customers, products, and supply base. Advanced analytics enable deeper insights scaled across the business, and execution is sustained and accelerated through capability development.

Digital Capability Center
Our Experience and Capability Centers for advanced operations can help your company advance to the forefront of operational excellence.

Ignite
Our expert-led diagnostic solutions provide C-level executives a holistic view of the value at stake and actionable recommendations to accelerate impact.

B2C Pricing Optimization
Make informed pricing decisions using real-time data and market analyses to increase profits

Knowledge Partnerships

Business of Fashion (BoF)

Since 2017, we have partnered with the media company Business of Fashion to provide a comprehensive view of the forces shaping the fashion industry. Together, we publish the annual State of Fashion report that offers an in-depth look at the leading global trends for the coming year, provides an update on industry sentiment based on the BoF–McKinsey global fashion survey, and contains the McKinsey global fashion index—a metric that estimates industry sales and tracks operating profit and economic value creation. Additionally, the McKinsey Apparel, Fashion & Luxury team is a knowledge partner for the BoF VOICES conference, a leading industry event.

Global Fashion Agenda

Since 2020, we have been a strategic knowledge partner for Global Fashion Agenda, the leading forum for industry collaboration and public-private cooperation on sustainability in fashion. Together, we have embarked on a Redesigning Growth venture to step change the fashion industry’s ambitions and understanding of what it takes to reshape business models and accelerate the pace of sustainable transformation. In 2020, we copublished the Fashion on Climate report that offers new insights into the fashion industry’s greenhouse-gas emissions. The report sets out a range of possible responses for the industry to curb emissions through the fashion-value cycle and align with targets set out in the Paris Agreement on climate change.

Featured Experts

Achim Berg
Senior Partner, Frankfurt
Advises global apparel, fashion, and luxury clients on strategy, operations, and marketing, helping executives design and execute...
Sandrine Devillard
Senior Partner, Montréal
Leads McKinsey's European consumer and retail sectors with a focus on consumer goods, apparel, fashion and luxury, and commercial...
Anita Balchandani
Senior Partner, London
Leads our apparel, fashion, and luxury work in EMEA, with deep expertise in multichannel and digital transformation
Fernanda Hoefel
Partner, São Paulo
Member of the consumer group in Latin America, working with retail and consumer clients, and shopping malls, to drive value creation...

HIGHLIGHTS FROM MCKINSEY AT COP26

How can the fashion and luxury goods industries become more sustainable?

On November 10, 2021, McKinsey convened CEOs, board members and leaders in the fashion and luxury industry to take stock of the proceedings at COP26 and discuss the bold moves the industry could make toward shaping a more sustainable future. Listen back to the discussion to learn more about the future of sustainability in this industry.

Speakers include:
Harry Bowcott, senior partner and leader of McKinsey’s Sustainability Practice in the United Kingdom and Ireland
Leslie Johnston, CEO, Laudes Foundation
Cyndi Rhoades, founder, Worn Again Technologies and cofounder, WCTD
Rajiv Sharma, CEO, Coats Group plc
Alannah Weston, chair, Selfridges Group

Featured Insight

Report

State of Fashion 2022: An uneven recovery and new frontiers

– In 2022, the fashion industry can return to growth as changing category landscapes, new digital frontiers, and advances in sustainability continue to present opportunities.

Related Insights

Article

How the apparel industry can ADAPT to inflation
– High inflation is a challenge, but ADAPTing an agile pricing strategy can help retailers and brands control costs, protect margins,... and retain customer loyalty.
Podcast - McKinsey Global Institute

Forward Thinking on the sustainability revolution in textiles and the fashion industry with Edwin Keh
– The leader of a cutting-edge institute talks about innovative new materials that “eat” carbon and may enable cotton... growing without irrigation, as well as the potential for building the world’s shortest supply chain in two 40-foot containers.
Article

Scaling textile recycling in Europe—turning waste into value
– Fiber-to-fiber recycling at scale could be achieved by 2030, creating a new and sustainable circular industry in Europe.
Article

Tackling inflation and margin pressure in the sporting goods industry
– The sporting goods industry faces new challenges from inflation and an emerging economic downturn, adding to existing pressure... on input costs and supply chains. Now is the time to act.
Article

In search of fashion’s sustainability seekers
– As eco-conscious generations become more financially stable, brands will need to keep up with increasing demand for sustainable... fashion practices.
Podcast

How current global trends are disrupting the fashion industry
– Fashion suppliers and brands, like other companies, are facing significant economic and geopolitical challenges. Here’s... what they can do to adapt and thrive.
Article

State of Fashion Technology Report 2022
– As technological innovation accelerates, fashion companies have an opportunity to serve customers better while also creating a... more efficient, responsive, and responsible business.
Article

How the fashion industry can get into a metaverse mindset
– Shoppers, particularly those in Gen Z, are spending more time online and exploring the possibilities of the metaverse. Here’s... what fashion and luxury players need to know about this emerging frontier.
Article

Mastering off-price fashion in an omnichannel world
– The diversity of off-price channels and the emergence of online players requires fashion brands to develop clear strategies that... protect their brands while reaching new consumers.
Report

Closing the loop: Increasing fashion circularity in California
– The fashion value chain is predominantly linear and global. It has put the apparel industry on an unsustainable path.
Report

Sporting goods 2022: The new normal is here
– The sporting-goods industry continues to evolve amid increased health awareness, shifting channel preferences, and rising sustainability... concerns. Sporting-goods players need to adapt to five trends shaping the industry in 2022.
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