The events of the past few years have inspired many consumers to engage in retail therapy for a reprieve. But new research by McKinsey shows that company performance across the apparel, fashion, and luxury (AF&L) sector has been quite fragmented, with some companies gaining an upper hand over the past few years. In short, whether a company can outperform its competitors in the global apparel market relies largely on the segment in which it operates (see sidebar, “Fashion category definitions”), though, of course, strategic and operational choices can also make an impact.
In 2020, we examined the industry’s TSR and recommended that companies take decisive action in the face of ambiguity.
At the time, premium and luxury segments were significant outperformers in the AF&L market—a trend that endured throughout the