McKinsey and BOF Insights Release The State of Fashion 2026
The latest State of Fashion 2026 report, published jointly by McKinsey & Company and The Business of Fashion (BOF), highlights that while fashion leaders have moved past uncertainty, they now face a landscape defined by economic volatility, evolving consumer priorities, and rapid technological disruption. Success in 2026 will demand greater agility, innovative capabilities, and strategic resilience.
The report notes that US tariffs have reshaped global trade, forcing brands and suppliers to adjust operations and sourcing rapidly. Meanwhile, consumers are rethinking spending, prioritizing value, wellbeing, and longevity. At the same time, artificial intelligence is transforming the fashion ecosystem, from design and production to retail and e-commerce.
According to the report, executives now describe the industry as “challenging” rather than “uncertain,” with tariffs cited as the primary obstacle. While 46% of respondents expect conditions to worsen in 2026, 25% see pockets of opportunity, particularly in emerging markets like China and in sectors such as luxury and sportswear.
Global growth is expected to remain in the low single digits. Macroeconomic volatility continues to shape consumer behavior, with trading down and cautious spending observed across the US, Europe, and China. Luxury segments are projected to improve modestly, supported by creative resets and renewed investment in key markets, particularly in the US.
AI is increasingly central to industry strategy. More than 35% of executives report using generative AI for customer service, content creation, product discovery, and marketing. The report emphasizes that fashion companies must adapt their processes, secure AI talent, and rethink organizational design to capture the benefits of automation and agentic AI fully. AI is also reshaping consumer behavior, with autonomous shopping agents and AI-driven recommendations changing how people discover and purchase fashion products.
As the fashion system continues to evolve, brands that can combine agility, creativity, and technological adoption are likely to emerge as winners in 2026. The full report, spanning 143 pages, is available for download, and an accompanying webinar will explore key findings in detail.
