New data shows mid-market fashion outpacing luxury in sector growth

Core Insights - The mid-market fashion sector has become the primary driver of sector value, surpassing the luxury category [1] - Brands have implemented significant price increases and restructured promotional activities in response to macroeconomic factors such as inflation and international tariffs [1] Price Increases - Mid-market fashion brands increased prices by 50% in Europe and even "doubling them" in the US relative to 2024 [2] - Denim prices rose by 9% in Europe and 20% in the US, indicating resilience in its timeless appeal [2] - Winter footwear prices increased by 9% in Europe and 19% in the US, driven by growth in the mass market segment [3] - Coats and jackets saw price increases of 11% in Europe and 13% in the US [3] - Handbags recorded the largest increases, rising by 33% in Europe and 38% in the US, influenced by luxury fashion trends [3] - Accessories and lucky charms rose by 15% in Europe and 16% in the US [4] Promotional Strategies - Brands are offering lower average discounts while extending the duration of promotions [4] - In Europe, the average discount rate and the proportion of discounted products declined between September and December 2025 compared to previous years [4] Economic Pressures - UK consumer price inflation reached 3.4% in December 2025, contributing to cautious spending patterns [5] - US tariffs between 15% and 50% have raised import costs for brands, prompting selective price hikes that could constrain demand [5] Market Dynamics - The current environment is described as a "K-economy," where high-income consumers maintain or increase spending while others reduce it [6] - Brands are tailoring pricing and promotions more precisely to different consumer segments [6] - Brand strategies reflect market challenges, with streamlined product ranges and curated collections [7] - Discounting strategies are shifting, with decreasing discount rates and longer promotional periods to preserve pricing power [7]