From the get-go, the most recent round of fashion weeks felt different. I didn’t make it to New York this season, but as I started meeting with CEOs and creative directors for catch-ups in London, Milan and Paris, it became more clear than ever that the industry is mired in a deep malaise. One CEO with 40 years of experience in the luxury fashion sector said he had never before witnessed such a marked shift in consumer sentiment in all major markets around the world, all at the same time.

The big question is whether the current downturn is a shorter-term cyclical shift, or a longer-term structural cataclysm that will require the luxury sector to make fundamental changes to its business model. The combination of customer resistance to dramatic price increases amid declining quality and ongoing questions about industry ethics and sustainability have dented the perceived value of big brand luxury.

Meanwhile, the rumour mill around creative director appointments continues to whir, leading fashion enthusiasts to conclude that designers are increasingly seen as dispensable, working under the pressure of an industry that doesn’t stop.

The Luxury Sweatshops Scandal: ‘It Could Happen to Any of Us’

As our sustainability correspondent Sarah Kent reported in a BoF investigation published at the beginning of Milan Fashion Week, the luxury fashion sector is in crisis mode as the industry awaits the results of a government probe into the luxury supply chains of as many as 12 luxury brands, after Armani and Dior were the first to be exposed for relying on an operating model that Italian prosecutors say prioritises profits over worker welfare.

“It could happen to any of us,” one executive said to me, claiming that no matter how hard they worked to get the situation under control, things are sometimes changed overnight when brands are not able to oversee everything in their outsourced supply chains. This sounded to me like an abdication of accountability rather than a realisation that there exists a deeper problem that must be solved.

But I still got the sense that the growing regulatory pressure and customer awareness of the issue will force executives to act, especially as the findings of the investigation play out on social media. It’s not lost on executives that the glossy exterior of luxury brands can quickly be compromised when brands are seen to underpay workers for products that are positioned as luxury.

Indeed, a Dior product certificate I found at home recently says the following: “We certify that this article has been manufactured according to the most rigorous quality standards, and in conformity with the image of our brand name.” Most other brands make similar promises. Now they know they must deliver on them or else.

Dramatic Slowdown in China Squashes Post-Covid Momentum

The rapid deceleration in the critical Chinese market was also a hot topic during fashion month. As one person put it to me, a strong performance in China over the last quarter is flat or single digit declines in revenue. The most challenged brands are seeing declines of up to thirty or forty percent, decimating profitability.

Consumer confidence in China remains low, as shoppers continue to grapple with a real-estate crisis which has had an impact on their perceived sense of wealth. Chinese customers are trading down, leaving luxury brands in the lurch. By most accounts, the next 12 to 18 months in the luxury sector are set to be very challenging indeed.

We will have our first read of how hard the industry is being hit when sector bellwether LVMH reports its Q3 results next week. With a US market that is basically flat year-on-year, and a European market that is struggling to regain its tourist inflows, analysts are expecting (and hoping for) a flat Q3, which would be seen as a good outcome.

Budget Cuts, Everywhere

Outside the shows, fashion month is usually filled with extravagant dinners and parties staged by brands to create more content and opportunities to wine and dine industry leaders. But, there was a notable pullback in these activations in London, Paris and Milan, and even some of the show sets and venues seemed dialled back as well. I can’t even count the number of times I heard the words “budget cuts” uttered this season.

For Casey Cadwallader at Mugler, this meant a much more straightforward daytime show at Le Trianon, a Paris concert hall with none of the nighttime theatrics that excited insiders in recent seasons.

This season at Louis Vuitton, the industry’s biggest luxury house created a runway made up of more than 1,000 Louis Vuitton trunks that rose from the floor at the beginning of the show instead of an elaborate set. It was an effective way to underscore the heritage of the house, but also seemed to be a way to trim the cost of the show set which in recent seasons has featured elaborate sets by Philippe Parreno.

Quiet Luxury on the Wane For Women

One notable change on the Spring/Summer 2025 runways was the return to maximalism and expressive fashion as seen at Valentino, Saint Laurent and Bottega Veneta.

There’s a good reason for this. Buyers and retailers I spoke to said that shoppers, particularly women, have tired of the muted colours and pared back designs that fuelled the quiet luxury trend in recent seasons.

There are a few reasons for this, they said. First, women’s closets are now filled with basic items in navy, beige and black. Now they are looking for more colourful and extravagant styles that motivate them to buy. Plus, smart shoppers have realised they can get a good version of quiet luxury at brands like Massimo Dutti for a fraction of the price.

This should bode well for those brands which laid on the embellishment and intricate craft in their collections. However, according to top retailers, the men’s quiet luxury movement continues unabated, with brands like Loro Piana, Zegna and Brunello Cucinelli continuing to perform well.

The Return of Retail Buying Power

With the merger of Saks Fifth Avenue and Neiman Marcus in the United States and MyTheresa’s acquisition of Yoox Net-a-Porter announced earlier this week, multi-brand retailers will now be able to flex their muscle with brands, some of whom are reevaluating their retrenchment from wholesale channels.

As the overall luxury market cools, these larger and more powerful retail juggernauts offer a chance to reach new customers, who one day may shop the brand directly.

However, the retailers I spoke to also understand that they need to offer a more curated buy, rely less on discounting and elevate the shopping experience so top luxury brands feel safe in their retail environments.

This Weekend on The BoF Podcast

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Zac Posen burst onto the fashion scene in the early 2000s, gaining acclaim for his glamorous designs and dressing Hollywood’s elite. After nearly two decades, Posen closed his label in 2019, finding himself at a crossroads that eventually led to a meeting with Richard Dickson, the new CEO of Gap Inc., and the chance to join the company as creative director. Now, he’s on a mission to bring cultural relevance and excitement back to brands like Gap, Old Navy, Banana Republic, and Athleta.

“Within five minutes [of meeting Dickson], I knew that there was something very special. It was a cosmic moment where there was like a magic connection, where I saw that I had met my dreamer,” Posen says.

This week on The BoF Podcast, I sit down with Posen to explore his journey of redefining success, his transformative role at Gap Inc., and his vision for the future of fashion.

Wishing you all a great weekend!

Imran Amed, Founder, CEO and Editor-in-Chief, The Business of Fashion

Here are my other top picks from our analysis on fashion, luxury and beauty:

1. What Escalation in the Middle East War Means for the Industry. After a year of war, things continued to heat up in the Middle East this week. BoF spoke to industry sources in the region to assess the impact, from Beirut’s ateliers to fashion retailers in Dubai.

2. Why Mytheresa Bought Yoox-Net-a-Porter. The merger between the luxury e-tailers has potentially far-reaching implications for the troubled sector.

3. Why Fashion Is Maxing Out on Minimalism. The Row’s success – including a recent investment from the families behind Chanel and L’Oréal at a unicorn valuation – is the most prestigious example of a rising generation of women-led independent brands that sell minimalist, approachably chic clothes. Some of them have billion-dollar aspirations of their own.

4. Old-School Magazines Are Brands’ New Favourite Marketing Tactic. Brands from Madhappy and Patta to Bottega Veneta are once again embracing print magazines full of on-brand editorial content as they attempt to escape the algorithm and bypass the drawbacks of social-media marketing.

5. The Glory Days of the Pop-Up Store Are Over. What’s Next? Rising rents and low vacancy rates have made it prohibitively expensive for many emerging brands to open retail locations — even temporary ones. Scrappy companies have found creative, low-cost ways to reach their consumers, from hotel partnerships and trunk shows to activations on college campuses.

To receive this email in your inbox each Saturday, sign up to The Daily Digest newsletter for agenda-setting intelligence, analysis and advice that you won’t find anywhere else.

Kim Jones is exiting Fendi, where he was artistic director of womenswear and couture. The British designer now plans to ‘concentrate fully’ on his role as menswear designer at LVMH stablemate Dior, Jones and Fendi said in a statement Friday. A new creative configuration will be announced “in due time,” the statement read.

Jones added the Fendi role to his responsibilities designing Dior menswear in 2020 as the Roman fur and leather goods house sought to open a new cycle of growth following the shocks of Covid-19 lockdowns and the 2019 death of Karl Lagerfeld, who revolutionised the brand during a tenure that lasted for over 50 years.

Jones is known for a sophisticated, globetrotting aesthetic that blends regal tailoring with signatures from streetwear culture, including collaborations with sneaker giant Nike and cult outerwear brand Stone Island. The designer has also enriched collections by working with artists from hypebeast-approved names like Kaws to Judy Blake and Hylton Nel.

The designer built a reputation as one of the leading voices in luxury menswear during his tenures at Louis Vuitton and Dunhill, before joining Dior in 2018. But womenswear was a fresh challenge for Jones.

His collections mined Fendi’s legacy of Roman elegance (turning to the women in the brand’s iconic founding family for inspiration) while refreshing the playful, pop-luxury voice Lagerfeld brought to the house with a palette of beiges and pastels.

The shakeup comes amid a flurry of designer changes as brands seek to update their creative strategies amid slowing sales across the sector. Last week, LVMH confirmed Hedi Slimane was leaving Celine (replaced by Michael Rider). Last month, the group named Sarah Burton creative director of stablemate Givenchy.

The news that Jones plans to “concentrate fully” on his role at Dior is likely to dampen speculation that LVMH’s designer shakeup will soon extend to Christian Dior. Miss Tweed reported last week that LVMH would promote Loewe designer Jonathan Anderson to the French couture brand, giving him control over both men’s and women’s.

Stay tuned to BoF for updates on this developing story.

Disclosure: LVMH is part of a group of investors who, together, hold a minority interest in The Business of Fashion. All investors have signed shareholders’ documentation guaranteeing BoF’s complete editorial independence.

The US presidential election, the most consequential vote for financial markets in an election-packed year, is weeks away.

With Democratic Vice President Kamala Harris and Republican Donald Trump locked in a close race to win the Nov. 5 election, we look at what matters most for world markets.

Europe in the Balance

For European equity markets, a Trump victory could spell trouble for export-heavy sectors, particularly German automakers such as BMW but also LVMH and other luxury goods makers as concerns of renewed trade tensions loom.

Barclays has warned of possible “high single-digit” percentage drops in European earnings should trade conflicts reignite. Trump has floated plans for blanket tariffs of 10-20 percent on virtually all imports to boost US manufacturing.

On the flip side, a Harris win would be a relatively better outcome for European equities. This could energise renewable energy, a possible tailwind for utilities with large US projects like Orsted and Iberdrola.

Over the longer term, however, her plans to raise corporate taxes from 21 percent to 28 percent could curb margins for American firms and European dollar earners alike. A further cut under Trump would likely be welcomed on both sides of the Atlantic.

The election could have implications for the war in Ukraine. Trump and some Republicans in Congress have questioned the value of US funding for Ukraine’s two-year battle against Russia, while Democrats have pushed to bolster Ukraine.

Aerospace and defense stocks have gained over 80 percent since Russia invaded Ukraine in 2022.

Currency Swings

Trade tariffs are key for traders in the world’s most-actively traded currencies.

The euro, trading below September’s 14-month peaks at around $1.09, is seen as being in the losing camp if a Trump win means higher universal tariffs.

“A Trump win, in the eyes of the market, would take euro/dollar down to the $1.05 area, whereas a win for Harris would see the rate move in the opposite direction, above $1.15,” said BlueBay Asset Management CIO Mark Dowding.

Geopolitical risks, especially in the Middle East, that trigger a surge in oil prices and hurt economic growth, also make the euro vulnerable, analysts said.

ING added that a Trump win could also hurt the Australian and New Zealand dollars — currencies of economies dependent on trade from China, a main target of higher tariffs. Around 37 percent of Australia’s and 29 percent of New Zealand’s exports land in China, ING noted.

The Swedish and Norwegian currencies were also seen as vulnerable to global trade dynamics, while Canada’s dollar could suffer if a Harris win is viewed negatively for the US economy.

China Roulette

One of the highest stakes gambles in global markets right now is whether to place bets on China, where government stimulus pledges have revived investor interest that could be cancelled out by tariff hikes or trade wars under Trump.

Investors expect Harris to pursue targeted tariffs and Trump to lean towards more aggressive, disruptive policies.

“If Trump wins, the (political) rhetoric towards Chinese companies would be terrible,” Edmond de Rothschild international equities manager Christophe Foliot said.

That would likely increase China scepticism among US investors and intensify a trend for multinationals to remove made-in-China components from their supply chains, he added.

China faces further hits from a Trump administration potentially cutting Chinese companies’ access to new technologies, which would limit productivity, Oxford Economics said.

And risk consultancy Eurasia Group said a Trump victory would pressure EU nations to also decouple from China.

Goldman Sachs strategists estimate that Chinese stocks could fall by 13 percent if Trump levies a 60 percent tariff on Chinese goods.

But threats of an export slump may also motivate Beijing to follow up monetary stimulus with more significant state spending programmes.

“Potential new US tariffs on Chinese goods might increase the intensity and longevity (of stimulus),” Goldman said.

EM on the Line

Emerging market equities are, on paper, ready to shine after underperforming their developed-world peers for the better part of a decade. The US Federal Reserve has kicked off rate cuts and the dollar, food and fuel prices are falling – big boosts for importing countries.

Investors say that a Harris win, signalling broad policy continuity from President Joe Biden, could give the assets a tailwind.

But a Trump win, accompanied by global tariffs, could come down hard on any excessive optimism. Most investors say Mexico, with strong US trade ties, has the most to lose; those betting on a Trump win often turn on Mexico’s peso.

JPMorgan warned investors to stay neutral until the US election risk has passed, and UBS warned that the highest Trump tariffs threaten losses of up to 11 percent for EM equities in 2025.

The Swiss bank also said that its EM Risk Appetite index is near 15-year highs, suggesting investors are not fully pricing in the downside risk of Trump tariffs to EM assets broadly.

Reporting by Libby George, Naomi Rovnick and Dhara Ranasinghe and Danilo Masoni; Editing by Frances Kerry