Fashion, luxury and lifestyle news aggregator - May 2025

Posted: 06/05/2025

Fashion under fire: fashion industry navigates the ripple effects of US tariffs

The fashion industry is likely to be among the hardest hit by Trump's reciprocal import tariffs, with 98% of clothing sold in the US being imported, in particular from China and Mexico. The tariffs include a 10% duty on all imports to the US, but those countries with whom America has bigger trade deficits (which include China and Vietnam) face a higher rate.

Following Trump's announcement, fashion stocks plunged including shares in luxury outfits Burberry, Dior, Gucci, Louis Vuitton and Saint Laurent. High street names, including sporting brands Lululemon, Nike, Adidas and Puma, also suffered tumbling share prices as a result.

The tariffs are set to have an impact at every level of the supply chain, from manufacturing to retail prices. The US is a crucial export market for manufacturing regions across Asia, including Bangladesh, Cambodia, India and Vietnam which are all set to be hit with heightened tariffs. The increase in these regions will likely raise costs for manufacturers and distributors, prompting brands to shift their sourcing to countries with lower tariffs. However, these countries may not be able to match the lower prices offered by the likes of China which, in turn, could lead to higher retail prices.

Fashion brands now face the tough decision to either raise consumer prices or absorb the additional costs. Data over the last 30 years shows that risk and cost in supply chains are often pushed down from investors and buyers to manufacturers and workers, resulting in significant job losses and lower wages in the manufacturing regions where the minimum wage is already dangerously low.

The impact of the tariffs on the fashion and luxury industry remains uncertain but the ripple effects will extend far beyond the borders of the US. Adidas CEO Bjørn Gulden commented that the tariffs would "eventually cause price increases" but it was currently "impossible to quantity" the impact they would have on consumer demand. Meanwhile, Chinese online marketplace Shein has already upped its US prices by an average of 8% across womenswear. 

Prada's acquisition of Versace confirmed

Prada has announced that it has entered into a definitive agreement to acquire Versace from Capri Holdings for €1.25 billion in a deal that is expected to close over the course of the second half of 2025, subject to customary closing conditions and regulatory approvals. The Italian fashion group negotiated a discount of more than $200 million in the wake of Trump's trade war, after it was previously reported that the two groups had agreed a price of almost €1.5 billion.

The news follows Versace's earlier announcement that Donatella Versace was stepping down as chief creative officer after nearly 30 years. Versace will therefore be joining Prada with new chief creative officer Dario Vitale, the former design and image director of Prada's sister brand Miu Miu.

John D Idol, Capri's chairman and CEO, commented that the fashion conglomerate had made "tremendous progress in repositioning" Versace for "sustainable long-term growth" and opined that "Prada Group is the perfect company to further guide Versace into its next era of growth and success". It is reported that the sale will enable Capri to make accelerated strategic investments in Michael Kors.

Meanwhile, Prada Group, which also owns Church's, Car Shoes, and Marchesi, has posted net revenues of €1.34 billion for the first quarter ending 31 March, up 13% year on year.

Bond Street: the high price of high fashion

London's Bond Street was named the most expensive shopping street in Europe in 2024. This puts the renowned shopping destination in third place globally after New York's Fifth Avenue and Madison Avenue.

Data from Savills showed a 20% increase in prime headline rents on Bond Street to £13,162 per square metre in 2024, meaning it is now more expensive than Milan's Via Monte Napoleone which was Europe's most expensive shopping street last year. This increase is likely due to high retail rent rises as well as the resurgence in demand for luxury – synonymous with Bond Street, known for being the home to numerous luxury fashion houses including Louis Vuitton and Chanel.

Anthony Selwyn, co-head of global retail at Savills, noted that with reduced overseas travel luxury brands focused on affluent domestic markets post-pandemic leading "core luxury markets [to become] increasingly more competitive," focusing on building quality and pitch and, as a consequence, putting upward pressure on rents.

Burberry: celebrating heritage

The V&A museum has partnered with Burberry to transform its fashion wing into The Burberry Gallery in honour of the leading powerhouse. The Fashion Gallery is the museum's most visited and largest dedicated permanent gallery space, and the Burberry exhibition, due to open in Spring 2027, will display five centuries of world-class designs from a variety of brands and individuals.

Tristan Hunt, the director of the V&A, commented that the partnership will showcase the "richness, heritage and diversity" of the gallery's fashion collections. The CEO of Burberry, Joshua Shulman, said that the space will "inspire creative minds for generations to come" and described the partnership as a "milestone for British arts and culture".

Meanwhile, Burberry launched its summer 2025 campaign, "It's always Burberry Weather: London in Love", releasing a series of seven short films embodying 90s and early 2000s rom coms, focusing on the everyday romances of ordinary Londoners and the unpredictability of British weather. The British brand has also recently kicked off a search for a new chair to succeed Gerry Murphy, who has chaired the company since 2017.

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