In 2020, fashion industry's profit fell by 93%

There were no doubts that 2020 was an annus horribilis for the whole world and for the fashion industry as well. Since last March, first in Europe and later in the rest of the world, efforts have been made to get a precise picture of the losses and devastating economic consequences that the pandemic has had and continues to have on the sector. McKinsey & Company took care of providing more precise data, as every year collected in The State of Fashion 2021 report, which reflects the current situation of the industry and identifies future trends and innovations to be implemented. 

In the report, one figure immediately strikes, which tells well how the last twelve months have gone. The fashion industry lost 93% of profits in 2020 after profits had grown by 4% in 2019. Certainly dramatic data, but not totally unexpected, and which most likely will not be replicated in 2021, given a general improvement in the health situation thanks to the arrival of the vaccine and the promising recovery of the Chinese market. 

In general, the report reveals a certain optimism, given that the pandemic was at least responsible for the acceleration of changes already underway, such as the growing focus on digital and the enhancement of e-commerce. With the easing of the restrictive measures, tourism and the related commercial activities, especially those linked to fashion, will also raise the fortunes of the industry. It is, in particular, the great recovery that is taking place in China that gives hope for the future, despite the fact that it's currently the strongest luxury market in the world. McKinsey & Company estimates sales growth of 5 to 10% in China compared to 2019, while Europe will suffer more from the ongoing emergency and the lack of tourists, recording an increase in sales from 2 to 7% compared to 2019. In general, pre-crisis sales levels will return only in 2022, while for the United States the return to normal will take longer: here sales will continue to fall in the next year, with a decline between 7 and 12% compared to 2019, and with the prospect of a recovery that will not be visible before 2023.