Fashion’s traditional playbook is being rewritten. The State of Fashion 2026 report reveals an industry under pressure. Tariffs are reshaping trade routes. Customers are demanding value over hype. Secondhand is booming while overproduction is facing consequences.
And, AI is transforming everything from design to manufacturing.
What is this report?
The State of Fashion is an annual report that tracks:
- Consumer preferences
- Global economic disruptions
- Changes to the fashion system
In 143 pages, it tells us what to expect from the next year of fashion.
Don’t worry – we read it so you don’t have to.
Brace for higher prices
71% of fashion execs plan to raise prices in 2026:
- 24% expect to raise prices by over 5%
- 47% expect to raise prices between 1-5%
Why will prices increase?
Fashion’s economic model is being squeezed from all sides:
- US trade tariffs are disrupting supply chains
- Slow market growth
- Volatile input costs
- Low cost of labour faces readjustment
Brands are raising prices to protect their profit margins.
Products on the move
To avoid tariffs and find cheap labour, fashion is shifting beyond traditional production hubs.
For example, one of India’s biggest manufacturers (supplying Gap and Walmart) is expanding into Ethiopia and Kenya to avoid tariffs.
Customers demand value
Eight in 10 fashion execs cite reduced appetite to spend and low consumer confidence as the top risks to growth in 2026.
Customers are frustrated with paying more each year without seeing improvements in quality or creativity.
The secondhand boom
About 60% of consumers globally intend to buy secondhand in 2026. Reasons include:
- Affordability
- Sustainability
- Uniqueness
- Access to luxury
- The thrill of the hunt
The resale market is expected to grow 2-3 times faster than the first-hand market next year.
AI transform fashion
“Up to 40% of workers in developed countries will need to reskill or change roles by 2030 due to technology.”
While brands use AI to cut costs and boost efficiency, questions remain about who benefits and who gets left behind.
Overproduction faces consequences
Fast fashion has long relied on overproduction – causing massive sustainability impacts felt mostly in the Global South.
New legislation is finally pushing back:
- EU: Ecodesign for Sustainable Products Regulation
- California: Responsible Textile Recovery Act
Fashion at a crossroads
Prices are rising, production is shifting, and customers are voting with their wallets – choosing secondhand over new, value over hype.
The brands that will thrive are those that listen to what people actually want: value, quality, and transparency.
The future of fashion isn’t about making more – it’s about making better.
Read the full State of Fashion 2026 report here
Credits
- Feature image of Regardless by Simon Deiner / SA Menswear Week
- Read more of our Explainers here
