Even in the face of a tough trading environment, some brands have found ways to push ahead with sustainability initiatives, according to Euromonitor’s insight manager for fashion. 

In spite of wars, tariffs, huge hikes in input prices, labour costs, energy bills and widespread market uncertainty, around 50% of fashion and luxury companies are currently investing in circularity initiatives. This is the estimate of the global insight manager for the fashion sector at market research firm Euromonitor, Marguerite Le Rolland. Her inclination is to take a glass-half-full attitude towards this; “I want to be hopeful,” she says. 

Governments in almost all parts of the world are worried about inflation and its effect on consumer confidence. Inflation surged as economies opened up again following the covid-19 pandemic. Interest rates rose, pushing mortgage payments up. Household energy prices also rose steeply. In the consumer confidence index that the Organisation for Economic Co-operation and Development (OECD) publishes, a figure above 100 indicates consumer optimism, while a figure below 100 suggests pessimism. The monthly average was last at or above the optimism threshold in 2021. Since then, the index has told a consistent tale of woe; the figure for October 2025 was 98.46.

This is the same figure as the one the OECD quotes for January 1975. Optimism was in short supply in the global economy at the start of 1975 because oil prices had quadrupled in the course of the previous year. Rising unemployment and high interest rates led the index’s figure to be at almost the same level again in November 1981; it reached 98.49. The OECD consumer confidence index did not go this low again until 2008 (when the global financial crisis began to hit). It went down further to 97.04 in February 2009. This was a record low, but the index went even lower in the high-inflation period after covid-19, reaching a spend-numbing new record of 96.7 in July 2022.

Cost concerns

Things might have been even worse. Alongside the impact on consumers, Marguerite Le Rolland points out the effect that changes in the global economy have imposed on manufacturers. Euromonitor’s tracking of the situation suggests that the cost of goods sold in the troubled first half of this decade increased much more quickly than consumer prices. She insists that many consumer-facing companies, including footwear brands that she tracks, “had to absorb a lot of extra cost and could not pass it on to end consumers, which has been impacting margins”. Euromonitor’s projection is that the economy is not yet at the end of this painful path and that it is going to continue to be “a challenging market environment”.

Market players are “very aware” that they cannot pass all of their extra costs on to consumers, the Euromonitor insight manager says. The risk of doing so, of course, is that consumers will stop buying their products. Even brands at the highest echelons have had to answer questions about this. Last December, the Wall Street Journal asked the president of fashion at Chanel, Bruno Pavlovsky, about the wisdom of hiking up the price of a popular, quilted classic flap bag. Customers in the US had to pay $5,800 for this bag in 2019. The price now is $11,300. “People who continue to buy Chanel and love Chanel feel comfortable with the level of prices,” Mr Pavlovsky said. Nice work if you can get it.

Circularity steps up

Some buyers of high-end goods are certainly reacting to higher prices, Ms Le Rolland insists. “We are seeing consumers show greater interest in second-hand products,” she explains. “This is good news when it comes to sustainability. Sustainability and economic crises, traditionally, have not gone well together, but in the last two years, we have noticed that many consumers are re-assessing what value means to them. It’s not only about looking for bargains. It is also a question of what brings them most value for their money. For similar reasons, our surveys also show there is also a growing interest in repairing items instead of buying new ones.”

Here, she speaks of Dr Martens as a good example. She likes its partnership with specialist service provider The Boot Repair Company, which offers customisation services as well as repairs. This is a way of offering the extra value consumers are looking for, she says.

Shorter supply chains

More widely, she says all the volatility, following the years of disruption caused by covid-19 and the “all-time high inflation”, has forced manufacturers “to rethink complex supply chains”. Shorter, more diversified supply chains can be a way of avoiding tariffs, she points out, while responding more quickly to market changes and introducing greater transparency.

The arrival of the Aura Blockchain Consortium in 2021, a joint LVMH, Prada and Richemont initiative, has impressed her. “The mix of blockchain technology with artificial intelligence (AI) allows full traceability of these brands’ leathergoods,” she explains. She also admires the work so far of New York-based, AI-powered product-verification solutions provider Entrupy. Its results confirm product authenticity and compliance, and are helping build up the trust of consumers, she says.

But she likes traditional ways of working, too. “Increasingly, in the last year or so, we have seen many international and Italian brands committing to Italian craftsmanship and Italian factories,” she says. “They are investing more in their suppliers there, or in their own factories.” Fendi and Zegna Group are among the companies she has in mind here. She also remarks on Jimmy Choo’s recent decision to open a new global supply chain office in Florence, which she says will include expanding the brand’s production in Italy as well. 

Green Deal demands

These changes are taking place alongside a European Union Green Deal that Ms Le Rolland insists is “still going ahead”. Regulations and directives defining how manufacturers and brands must bring products to market are coming.

Among these, she lists extended producer responsibility, through which the companies that make products available in the EU will bear the responsibility of covering the cost of collecting, sorting and recycling them at end of life. Other regulatory measures she mentions are the corporate sustainability reporting directive and the digital product passport directive. Yes, the focus of these initiatives is the market in the European Union, but the insistence at Euromonitor is that they will have an impact on global supply chains.

Compliance, in Ms Le Rolland’s opinion, will become “almost a given”. And at this point, it will be the design of a product that will become “the differentiator”. To return to the present though, with household budgets squeezed as tightly as they are, prices are paramount for families when it comes to many purchases. “When it is all about price, customer loyalty is really low,” she points out.

In her view, though, some of the big shifts that are taking place in the supply chain could help companies address challenges around environmental, cost-control and resilience issues. Shorter supply chains, according to Marguerite Le Rolland, can help reduce emissions at the same time as offering traceability, improved oversight of labour practices and other factors that will help companies achieve and maintain compliance. These “increasingly sustainable practices” converge with economic good sense, she states. This ties in with data from recent Euromonitor surveys that show that almost 75% of global companies mention climate action as being a priority for their businesses, while 60% of consumers claim they are trying to have a positive impact on the environment.

“Even though fashion is caught in a storm of geo-politics, tariffs and many other disruptions at the moment,” Ms Le Rolland concludes, “this can be a turning point. It can bring momentum for sustainability. We are seeing that sustainability is not a lesser priority, but something that is essential for building resilience in the long term and creating value for the future.” 

As good as new. Dr Martens is working with The Boot Repair Company to offer customers the chance to mend products rather than buy new ones. Credit: Shutterstock       

Share this story: