Q3 2025 apparel industry review: landscape of polarisation and protectionism

The third quarter of 2025 has revealed a fashion industry defined by sharp polarisation. While the overall sentiment remains one of cautious resilience, a distinct bifurcation has emerged between the struggling luxury sector and the thriving performance and value segments. As executives navigate a ""new normal"" of turbulence, the industry is being reshaped by intense geopolitical trade shifts, specifically US protectionism, and a cooling Chinese market.

Sector Highlights and Resilient Performers

Despite macroeconomic headwinds, specific segments delivered exceptional results. The sportswear and footwear category proved robust, with On Holding raising its annual forecast after a 32 percent sales surge in Q2, and Deckers Brands reporting a 16.9 percent jump driven by Hoka and UGG. Skechers remained on a growth course, posting a 10 percent revenue increase for the first half of the year. In the mass market, Inditex and Mango continued their upward trajectory, while Abercrombie & Fitch achieved record quarterly revenues, fuelled by its Hollister brand. The resale market also showed signs of maturation, with ThredUp and The RealReal reporting improved profitability and narrowing losses, validating the circular economy's shift from niche to essential.