Which trends offer opportunities or pose threats on the European apparel market?

Change equals opportunity, if you act upon it. This is especially true for the apparel industry, which is built on change. It follows, interprets and creates new trends. To learn how you can use global trends to your advantage, it is important to find the right response to several major factors. These are legislation, geopolitical developments, technical innovation, environmental and social sustainability, market requirements and new business models. This report will tell you how to respond to these factors.

1. Economic uncertainty persists in the European apparel market

The European apparel market is marked by uncertainty according to McKinsey’s State of Fashion report. The EU’s economic growth was slow in 2025. Although inflation has come down, it still has an effect on the purchasing behaviour of consumers . With climate change, geopolitical tensions, a tariff war and reshuffling global trade, there are many factors putting pressure on the market. Apparel imports to the EU have grown year-on-year over the last 5 years, except for 2023. The EU imported €180.5 billion of apparel in 2024, up from €149.2 billion in 2019 but down from €190.6 billion in 2022.

As Europe’s consumers try to balance their budgets, they spend more on value brands than luxury apparel. Fashion brands have to explain their higher prices through quality, brand value or experience. According to McKinsey, consumers are more often turning to second-hand platforms like Vinted, Vestiaire Collective and Depop. They also use discount channels, and affordable look-alikes more and more. European brands need to adapt by localising assortments, diversifying prices and increasing their appeal to value-oriented shoppers. But they also need to protect their margins.

This pressure will probably remain in the near future. Slow but positive economic growth is expected for Europe, with forecasts around 1.5% for many EU countries in 2026. European consumers expect prices to stay higher than normal. This means consumer sentiment is fragile. A 2025 BCG survey of 16,000 consumers in 9 European countries found that 54% of respondents were pessimistic about the economic future of their home country. This was a 7% increase since July 2024.

2. Adapt to geopolitical instability and economic uncertainty

Many different developments affect the sourcing strategies of EU buyers: from geopolitical instability to spending patterns. It is always good to include global trade developments in your sales strategy. Europe is not the only interesting market. Because of global developments, you might also want to consider local, regional or other international markets, like Asia or the US.

The consequences of the US tariff war

In 2025, the United States of America (USA) introduced trade tariffs on almost every country in the world. The tariffs have driven prices up, disrupted supply chains and put pressure on producers' margins. The new tariffs started with a 10% rate for all countries. But the USA confronted countries with a trade surplus with the US with extra tariffs. This includes Laos, Tunisia, Bangladesh and India. Apparel imports into the US from China have a baseline tariff of 10% at the moment, plus an additional tariff of 20% in most cases. Apparel is not on the list of goods from China that the US decided to exclude from higher tariffs.

The full impact of these policies is not clear yet. But we know that there will be a lot of uncertainty around the US market in the short to medium term. The apparel industry expects to see a shift towards products being ‘Made in USA’ and in other nearby apparel-producing countries with lower tariffs, like Mexico and Honduras. At the same time, China is shifting its focus away from the US to the EU and other regional markets. Other production countries will likely do the same, increasing competition for exports to Europe.

At the same time, producers from countries with relatively low trade tariffs on apparel products may see the trade war as an opportunity. For example, Bangladesh could benefit from the higher trade tariffs imposed on competing Asian export economies. The same is true for countries with lower tariffs, like Türkiye, Egypt and Morocco. Importers will try to diversify their sourcing to these countries. Producers from China have been expanding their business in these countries and may make even more efforts.

Political dynamics in production countries

Europe’s largest supplier of apparel, China, has outsourced production for several years. In China, costs are increasing and the apparel workforce is declining. There is growing Chinese domestic demand and more resources are used for in domestic production. This leads to a lack of capacity for exports, longer lead times, and higher prices. China is also increasing its focus on the production of more value-added products in the apparel sector.

Political tensions in production countries have direct effects on apparel export. Ethiopia lost its African Growth and Opportunity Act (AGOA) no tariff-deal with the US after civil unrest. The same happened to Cambodia, which also lost its trade deal with the EU. Myanmar still benefits from the General Scheme of Preferences (GSP). But it is losing a lot of business from European buyers due to political tensions. 

The Russian war of invasion in Ukraine has serious negative consequences for the global apparel industry and is still ongoing. The war in Gaza between Israel and Hamas and several Israeli air strikes in countries in the region have also added to the disruption of global supply chains. Safety risks in the Red Sea are on the rise as well. Because of this, material and energy prices have risen and trade has been forced to re-route.

Many European apparel buyers are investigating alternative production locations in Africa. Several countries have invested heavily in their apparel industry (notably Ethiopia) and for some categories Africa can be a good alternative to Asia. For example, denim and fast fashion are being sourced from Morocco, outerwear, jersey fabric and cotton from Egypt, basics from Ethiopia and outerwear from Rwanda. Africa has not yet established itself as a competitive alternative to Asia for all product categories. This is mainly due to lower productivity and a lack of local high quality materials. There are also political tensions in several African production countries. 

3. Diversify your business

Apparel market dynamics are changing fast. So, it can be risky to focus too much on just one product, factory or market. Apparel buyers in Europe are sourcing from various destinations, product portfolios and sales channels to spread risk. You should do the same. 

European apparel companies are more often looking to bring production closer to home. The idea is to increase flexibility and speed-to-market and to lower shipping costs. This shift fits into strategies to spread out (diversify) sourcing. For example, buyers will keep their production of volume orders (Bangladesh) or highly technical styles (China) in Asia. But they may look for smaller production runs to countries like Morocco, Egypt, Türkiye and Jordan. It may be a good idea to look for partnerships with factories close to Europe to do business with buyers who want to diversify their sourcing.

Some examples of European apparel companies nearshoring to Europe:

• Inditex (Zara) has moved production to Portugal, Morocco and Türkiye. This helps them reduce lead times and respond quickly to fast-changing fashion trends.
• H&M has increased sourcing from Türkiye and Eastern Europe. This helps them reduce lead times for certain product lines while keeping a strong balance between offshore production and nearshore flexibility. 
• Bestseller (Jack & Jones, Vero Moda) has increased nearshoring from Türkiye, Portugal and North Africa.
• Mango has successfully nearshored part of its production to Morocco, Türkiye and Portugal. 

Diversifying your company strategy

The strength of an organisation is often a vertical, in-house manufacturing setup. But for apparel manufacturers in developing countries it may be good to change from volume-focused subcontracting to diversified, strategic partnerships with European buyers. By balancing scale with specialisation, value with innovation and global with regional markets, manufacturers can avoid geopolitical risks, meet sustainability requirements and capture growth opportunities in multiple markets.

Table 1: Why and how to diversify an apparel factory

Source: FT Journalistiek

4. Help your buyers to comply with sustainability requirements

Sustainability is not a choice. Many social and environmental sustainability requirements have become law. If you do not comply, you cannot export apparel to Europe. At the same time, a lot of responsibility is still left in the hands of individual companies. Some buyers mostly focus on supply chain transparency and reducing their carbon footprint. Others invest mainly in working conditions and circularity. Some companies try to do it all. Select your customers wisely in line with your sustainable strategy.

New legal requirements

For the EU, a fully transparent circular economy is its main strategy to reduce the negative impacts of the apparel industry. The goal is a closed-loop system. In this system, textiles and fibres keep their value for as long as possible and waste is reduced. This requires recycling, refurbishing, re-using and rethinking the lifecycle of apparel. The ideal system has the least impact on the environment, is fully transparent and avoids the use of non-renewable inputs. It should also respect workers’ rights, including a living wage.

Good examples of European brands that have made circularity part of their business models include:

• GANNI: This Danish fashion brand offers resale and repair of GANNI garments through its ‘pre-loved’ platform.
• Adidas: This well-known German sportswear brand offers apparel and footwear designed with circularity in mind through its ‘Made to Be Remade’ (MTBR) initiative.
• MUD Jeans from the Netherlands collects its apparel after the end of use and recycles it at a designated plant. The fact that MUD Jeans rents out jeans and controls the collection process makes this easier. 
• Circular fashion brand A.BCH produces 99% compostable clothing. 

Figure 1: EU rules and regulations on sustainable apparel production in context

Source: FT Journalistiek

Mandatory sustainability requirements have been getting stricter since decades. But lately the EU and national governments have increased the speed and scope of new and revised laws. 

The following major legislations will shape the apparel industry. It is important to know that EU regulations apply to all EU member states but directives only set outcomes. Implementation is up to EU member states. This may lead to differences between national laws.

EU Green Deal

The EU Green Deal aims to achieve climate neutrality and create a circular economy. It covers various policies and actions to promote sustainable practices across sectors.

Extended Producer Responsibility (EPR, 2023)

Recycling materials is even more important for European buyers because the EU is introducing new legal measures. These include the ‘right to repair’ (under the Ecodesign for Sustainable Products Regulation). There is also the EU-wide EPR policy framework that makes companies responsible for how their products are disposed of, recycled or repaired. This is included in the Waste Framework Directive. 

Producers are required to develop systems for the collection, recycling, and disposal of garments. France, The Netherlands and Sweden have already introduced national EPRs. 

Corporate Sustainability Reporting Directive (CSRD, 2023)

The CSRD puts stricter reporting requirements on companies, including those in the apparel sector, when it comes to their environmental, social, and governance (ESG) performance. This directive aims to boost transparency and accountability in corporate sustainability efforts.

Green Claims Directive

The Green Claims Directive requires apparel brands to back up their environmental claims with verified data. Companies must back up statements such as ‘eco-friendly’, ‘sustainable’ or ‘carbon neutral’ with a Product Environmental Footprint (PEF). This ensures there is transparency and trust in sustainable product labels. 

Product Environmental Footprint (2024)

The Product Environmental Footprint aims to set up a standardised life cycle assessment (LCA) methodology for assessing and labelling the environmental impact of products. It will give consumers trustworthy information about several points in a garment’s supply chain: from raw material production to waste management. This will make it easier for consumers to make sustainable purchasing decisions. Read the EU’s PEF Category Rules for Apparel and Footwear.

As part of the Ecodesign for Sustainable Production Regulations (ESPR), this regulation will require clothing products to meet minimum sustainability and quality standards. It also includes a Digital Product Passport that will provide detailed traceability of materials and environmental impacts.

Regulation on Deforestation-free Products

A new regulation on deforestation-free products (EUDR, 2023, postponed) also affects European apparel importers. They need to prove that their products do not come from recently deforested land or have led to forest degradation. It applies to leather, but it does not apply to apparel items yet. Because of technical concerns, the EU has delayed its introduction for a second time by a year, to the end of 2026.

EU’s Biodiversity strategy

The EU’s Biodiversity strategy 2030 aims to regenerate nature on land and on water and to delay biodiversity loss. The plan focuses mainly on restoring nature in Europe. But it also supports the Global Biodiversity Framework and focuses on preventing forest fires and global wildlife trafficking.

EU’s Forced labour regulation

The EU’s Forced labour regulation is scheduled for December 2027. It bans products made with forced labour, including child labour. This regulation will apply to all companies importing into and exporting from the EU.

Microplastics Regulation (Pending)

To reduce microplastic pollution, future regulations will target synthetic textiles. These rules will require improvements to manufacturing processes, filters in washing machines, and stricter rules on microplastic emissions from clothing​.

Table 2: Opportunities for reducing social and environmental impact in each step of the apparel value chain

5. Focus not only on reducing impacts, but on actually improving the environment

Just 18% of fashion executives thought sustainability was one of the 3 main growth risks in 2025 (29% in 2024), according to McKinsey’s State of Fashion 2025. This does not mean sustainability is no longer important. The climate crisis is pressuring ever more companies to act. So do EU regulations. Ambitious industry players try to not only ‘do less harm’ but to change negative effects into positive contributions to the environment. One trend stands out: regenerative agriculture.

Regenerative agricultural practices go further than sustainability. They aim to actively improve the land. They are becoming more popular as a response to the environmental degradation caused by industrial farming. The idea centres on restoring and improving soil health, biodiversity and ecosystem resilience. The important principles are:

• Regenerating the soil by cover cropping, composting and reducing tillage to rebuild organic matter and microbial life in the soil.
• Restoring biodiversity by multi-cropping (instead of monoculture), and creating natural habitats to support pollinators and pest control.
• Improving the water cycle by reducing runoff and improving resilience to drought.
• Capturing carbon in the air by increasing soil organic matter.
• Minimising chemical inputs by reducing the use of synthetic fertilisers and pesticides, promoting natural nutrient cycles and pest resistance.

Several large European apparel retail groups have already set goals in this area, including H&M, Inditex and Diesel. Control Union introduced the first certification for regenerative agriculture: regenagri. To see it in action, look at Egyptian cotton farm Abou Madawy, certified by regenagri. The standard also offers chain of custody certification, such as for Aboni Knitwear, part of the Babylon Group in Bangladesh. 

6. Become a value chain partner, not just a supplier

The EU’s wants to shift away from the traditional ‘take-make-waste’ model and move towards a circular economy. This means thar your traditional role as a supplier will change a lot. Today, the apparel industry is still almost entirely based on the linear ‘take-make-waste’ model. Manufacturers use non-renewable resources and cheap labour to produce fashionable apparel items. These are sold to brands and burned or landfilled after use. After you have produced the order, you will never see the product again. 

That will change. The EU and European apparel companies want to gain insight into every aspect of production (including the raw materials you source) and over the end-of-life phase. This means you need to try and learn how your suppliers have produced the raw materials. It also means that European apparel brands and retailers will be responsible for their products even after they have sold it. They will become (your) supplier of raw materials, in the form of post-consumer waste. A truly circular loop. 

Figure 2: The R-ladder of circularity

Source: FT Journalistiek

The shift towards a circular economy offers opportunities for manufacturers that can:

• Reduce waste during production. Invest in automated systems for cutting patterns and improve the efficiency of material use. Non-avoidable cutting waste should be repurposed by choosing strategies high up the R-ladder of circularity (see above);
• Design styles that are durable and easy to reuse, repair, refurbish, repurpose or recycle. Ideally, manufacturers play a role in remanufacturing, refurbishing and repairing end-of-life apparel. For practical tips on how to do this, check the Circular Fashion Design Guide by the Ellen McArthur Foundation;
• Take responsibility of post-consumer textiles by offering buyers the option of returning their product for circular purposes such as recycling into new lint and fibres. An option higher up the R-ladder is servicing buyers with the possibility to remanufacture, refurbish or repair used items;
• Offer made-to-measure for the mass market. Offering buyers stock service in fabrics and trims reduces mismatches and unsold collections and increases speed-to-market. This principle is based on manufacturing according to market demand.

Figure 3: The shift towards apparel made from recycled materials is one of the most important trends in Europe

Source: Forward in Fashion

7. European end consumers shop increasingly online and demand full transparency 

Online shopping has made European consumers used to a lot of choice in styles, competitive prices, superfast delivery and full disclosure about product quality and production. Use storytelling to create an emotional connection with consumers, set your brand apart from the rest, and drive purchasing decisions. Be aware however that all stories need to be supported by verifiable facts.

Transparency

Help your buyers to offer full transparency to European end consumers. Lack of regulation in the apparel industry has allowed products to be marketed as socially and environmentally responsible without sufficient proof. This is starting to change because consumers no longer tolerate this (nor does the EU). Sustainability goals in the coming years will need to be objective and measurable. Brands and retailers should set goals and provide full disclosure about results, both good and bad.

Third-generation fast fashion

The EU and European national governments are trying to force apparel brands and retailers to provide full transparency. But at the same time, a ‘third generation’ of fast fashion-companies including Shein and Temu have captured a large audience in Europe and the US with ultra-cheap fashion. These companies sell styles via smartphone apps at ultra-low prices and offer a customer experience driven by gamification, micro-incentives and social media. 

The challenge for these companies is to comply to increasingly strict European social and environmental laws and the new EU Digital Services Act on online privacy and security.

Second-hand apparel 

At the same time, the market for second-hand apparel is growing as well because European end-consumer see it as friendly on the environment and their budget. Several different market researchers have predicted steady growth in the coming years. Western Europe will remain the most attractive market for second-hand apparel. But countries like Poland, Hungary and Romania are catching up. The second-hand market is serviced in Europe by established platforms such as Vestiaire Collective, Vinted and Depop.

The resale market is serviced by brands and retailers including ASOS, which integrated its marketplace for vintage sellers into Asos in 2025, as well as startups such as thredUP and Reflaunt. This development may negatively influence the sale of new apparel but offers opportunities for circular concepts. 

Figure 4: The European population is ageing and getting more diverse

Source: Jonny Gios on Unsplash

8. The European population in 10 years: older and more diverse 

Developments in the European population and in European culture directly influence the apparel industry and buying behaviour. Although Europe is a diverse continent with many separate societies and cultures, there are some general developments you should take into account when doing business with European buyers.

Consumers older than 50

In Europe, consumers older than 50 are the fastest-growing demographic. They are projected to have the most disposable income and wealth by 2030. The median age in the EU-27 is projected to increase by 4.5 years between 2019 and 2050, to reach 48.2 years. This ‘silver generation’ is relatively rich, living longer and staying active. 

Older Europeans mostly value quality, comfort, timeless style and trusted brands. Apparel manufacturers can make the most of this demand by offering inclusive sizing, adaptive fits, premium fabrics and sophisticated yet modern designs. Marketing should focus on authenticity and health, providing personalised service and omnichannel (physical retail and online shopping) convenience.

This demographic shift will also lead to increased demand for adaptive apparel that caters to the needs of older people. This can include clothing that is easy to put on and take off, and designed with features that address age-related challenges such as mobility or sensory issues.

Diversity

At the same time, Europe is becoming more and more diverse, with a rising number of multicultural communities. Most European countries have positive net migration figures and this is unlikely to change soon. Brands that can offer a wide range of sizes, styles and designs that reflect the multicultural nature of European societies can gain a competitive advantage. The number of European citizens of Islamic background with ‘modest’ fashion preferences is growing especially fast.

Younger generations

Younger generations in Europe, such as Millennials and Generation Z are known for actively seeking out sustainable fashion. As they grow older and gain more purchasing power, these generations might bring their mindset to the mainstream. This can increase demand for sustainably produced apparel. Brands that prioritise environmentally friendly materials, fair trade practices, and responsible manufacturing processes and transparency will be best positioned to tap into this market segment.

Plus-size apparel

Another apparel niche that is expected to perform well is plus-size apparel, as the Body Mass Index (BMI) of the average European continues to go up. Demand for plus-size fashion is expected to grow as inclusivity becomes a priority for both consumers and brands. Companies offering a wide range of sizes and emphasising body-positive messaging will likely gain a significant market share, especially with more attention for fit and comfort.

Figure 5: Laser-cutting pattern machines can reduce labour and save material

Source: Forward in Fashion

9. Technology will make apparel production and sales more efficient

New technologies are transforming the apparel industry in several ways. Factories are becoming more efficient by using intelligent digital machines that can monitor their own performance and communicate amongst themselves. This makes it easier for factories to match supply to market demand. The aim is a value chain that is more transparent, less labour-intensive, more efficient, more flexible and more cost-effective than ever.

Artificial Intelligence (AI)

More than half of all fashion executives that responded to the annual McKinsey State of fashion survey (2024) are already using Artificial Intelligence (AI) in their companies. AI is applied in many different stages of apparel production, improving efficiency, speed, and boosting creativity. 

AI can generate designs for fabrics, single styles and even entire collections. In the approval process, AI supports 3D sampling. Thanks to AI, end consumers can customise the design, colour, and fit of garments in real time. In manufacturing, AI can be used to optimise sourcing and inventory management, to automate cutting and sewing, and to reduce inputs, wastage and overproduction. AI can also be used to predict trends and generate marketing materials. AI is also used to train workers.

Automation and robotics

Automation and robotics can handle tasks such as fabric cutting, sewing, and pattern-making with precision and speed. Automation reduces labour costs, improves efficiency, and allows for increased production capacity. It also enables customisation and flexible manufacturing by integrating digital design and production systems.

A truly digitised apparel factory uses software to interconnect ‘smart machines’: from the material warehouse to the sampling room, cutting department, assembly line, finishing department and product warehouse. 

3D design tools and virtual prototyping software

3D design tools and virtual prototyping software allow designers to create, visualise, share and quickly adjust garments online. This speeds up the approval process. 3D-avatars can also be used to set up virtual showrooms. When applied in (online) retail, it even allows end consumers to better choose the right apparel item (fit, shape, appearance). This leads to less products being returned.

Internet of Things (IoT) technology

The integration of Internet of Things (IoT) technology into apparel creates new opportunities for functionality and connectivity. Sensors and wearable devices can collect data on body metrics, activity levels, and environmental conditions. This data can be used for personalised experiences, performance monitoring, and health tracking. 

Figure 6: All improvement starts by measuring and monitoring production data 

Source: Forward in Fashion

FT Journalistiek carried out this study in partnership with Giovanni Beatrice on behalf of CBI.

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