Sluggish Sales, the Rise of Ultra Fast Fashion, the Growth of Secondhand, the Integration of AI… Fashion Is Undergoing Major Upheavals—Economic, Environmental, Societal, and Digital. Xavier Romatet (MBA ’86), Dean of the Institut Français de la Mode (IFM), Analyzes the Sector and Assesses Its Capacity to Bounce Back.

What does fashion represent today?

It’s a multifaceted industry, bringing together players of completely different natures—from luxury giants like LVMH to ultra fast fashion brands like Shein. Its weight in the French economy is significant: 2.8% of GDP, which is more than the aerospace and automotive industries combined. It accounts for over 600,000 direct jobs and one million indirect ones. In terms of soft power, it plays a key role in France’s international influence. Throughout its long history, fashion has always managed to reinvent itself in order to weather crises and adapt to societal changes—and I’m convinced it will continue to do so.

The industry is experiencing a major slowdown, which began with ready-to-wear and has now reached the premium and luxury segments. Why?

There are many reasons for these difficulties. The sector has been struggling for several years. The COVID crisis marked a turning point, with consumer spending coming to a halt and digital channels exploding. The subsequent inflationary pressure led consumers to cut back on non-essential spending—fashion included. In 2024, the French fashion market grew by 0.5% in value, but declined in volume.

Luxury is a special case. It experienced two exceptional years in 2022 and 2023, driven by a post-COVID rebound. Prices increased as demand outstripped supply. But the situation has since worsened: the global luxury market contracted by 2% in 2024, after having grown by an average of 8% annually over the past two decades. That’s a stark contrast. Today, geopolitical tensions and the resurgence of protectionism are making things even more uncertain—luxury goods risk becoming bargaining chips in tariff negotiations. That said, luxury players have implemented “premiumization” strategies aimed at retaining their wealthiest clients, who are less likely to reduce spending when prices rise.

What are the structural reasons behind the crisis?

The share of clothing in household budgets has been declining for decades—from 12% in 1960 to 3.5% in 2023. Consumers are prioritizing other expenses: housing, digital entertainment, and so on. The average price of garments has dropped significantly over the past twenty years. At the same time, the market has become highly segmented. A consumer can buy jeans for €40 at Zara, €200 at Maje, €500 at Isabel Marant, or €1,000 at Chanel. Every price point exists—the gap between players has never been so wide.

Moreover, the market has been disrupted by new entrants. Fifteen years ago, fast fashion from H&M, Zara, and Uniqlo was already shaking up traditional players, causing the downfall of those who failed to adapt—like the Vivarte group. In the past three years, ultra fast fashion brands like Shein, Temu, and Amazon have reshuffled the deck. They offer an endless stream of extremely cheap products online, with exceptional variety. In terms of volume, Chinese company Shein is now the top clothing seller in France—ahead of Vinted and Kiabi.

Can fashion and environmental responsibility be reconciled?

Fashion is often criticized as a polluting industry. To meet consumer and regulatory pressure, it must invest in more responsible practices: reworking supply chains, ensuring sourcing traceability and process transparency, relocating production closer to consumption areas… But all this is complex and costly. Building a textile factory in France is no easy feat, especially since many skills have been lost.

In addition, not all industry players are on equal footing when it comes to ESG demands. Ultra fast fashion currently escapes most fiscal, social, and environmental regulations—an unacceptable situation. Luxury, on the other hand, has the means to invest and is making the greatest efforts, while also being the least polluting. For everyone else, it’s much more difficult. And consumer schizophrenia doesn’t help—they demand responsible brands, yet buy from Shein.

What are the solutions to make quality more desirable?

The primary function of clothing is utilitarian—dressing oneself is a basic need. This segment is price-driven: poor-quality clothing—cheap, low-end, polluting, and made with harmful materials—is the fashion equivalent of junk food. I believe strong regulation against exploitative practices, combined with consumer education, will gradually reduce such purchases.

The second aspect of clothing is pleasure—fashion sparks positive emotions and conveys a flattering image of oneself. To cultivate this dimension, fashion must reinvest in creativity, which may have taken a backseat recently to marketing and communication. Today, the turnover of artistic directors is higher than ever, showing that fashion houses are seeking creative renewal.

To restore desirability, brands must also focus on the product’s materiality, aesthetics, comfort, and durability. For premium and luxury brands, this is fundamental: consumers are willing to pay the price if they’re convinced of a product’s quality. Fashion players need to reallocate more resources toward creativity and product excellence.

 

Is secondhand opening up new avenues?

Secondhand is booming, as it democratizes access to luxury goods while promoting product durability. In France, it now represents 12% of the fashion market and is growing twice as fast as the new clothing segment. From Kiabi to Chanel, all players are implementing secondhand systems or services designed to extend the life cycle of their products.

What is the impact of new technologies on fashion?

From a distribution standpoint, the lower a brand’s price point, the more e-commerce dominates its business model. 80% of luxury purchases still happen in-store, while ultra-fast fashion operates entirely online. That said, all fashion players now use digital tools to enhance their offerings. Artificial intelligence will drive major advances in supply chain management, support progress in sustainability, and improve personalization in customer relations and data processing.

As for the creative process, AI will likely not replace true designers, but it can expand their creative possibilities and accelerate project execution. I’m less convinced, however, that virtual environments—like the metaverse or video games—offer significant opportunities for fashion brands. Likewise, I believe the systematic use of influencers needs to be rethought to avoid its artificial and short-lived impact.

How is IFM preparing future fashion creators and managers to meet the industry’s challenges?

IFM positions itself in the high-end segment. We are deeply rooted in the Parisian fashion ecosystem, home to centuries-old traditions that the major houses want to pass on to the next generation. Our role is to bring students back to the essentials: the timeless nature of luxury and the uniqueness of products. IFM teaches three main disciplines: fashion management, fashion design, and craftsmanship. We welcome 1,300 students from 75 nationalities, and we look for curiosity and a strong affinity for creativity—even among future managers.

Today, Paris is more than ever the fashion capital of the world. It is the only city to host haute couture shows, and its Fashion Week is the most sought after by young designers. At the heart of this exceptional creative hub, IFM aims to become the world’s leading school for fashion-related professions.

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