This week, the fashion industry got a taste of Trump 2.0. The newly inaugurated US President lost little time in moving to deliver on key election promises (or threats, depending on your perspective), signing dozens of executive orders within the first week of his term.
There are still plenty of uncertainties. The President’s rhetoric on tariffs that could redraw fashion’s supply chains remains as robust as ever, though none have yet been actioned.
But this week’s orders took aim at topics like diversity, equity and inclusion programmes and climate action, institutionalising a growing backlash against so-called “woke capitalism” that has already had a chilling effect on corporate DEI programmes in the fashion industry and created a more permissive environment for brands to roll back climate commitments.
The President’s move to follow through on his vow to withdraw America from the Paris Climate Accord was expected. Nonetheless, the move threatens already dubious global progress to curb global warming, even as extreme weather-related disasters become more frequent, more deadly and more expensive to manage. State-led and international regulatory efforts, along with growing business risk, mean brands are unlikely to abandon climate commitments altogether, but executives will be under less pressure to show they are delivering.
One of the most immediate threats to the fashion sector came in the form of a directive that federal agencies should draw up lists of “up to nine” companies to investigate for “DEI discrimination.” Whether the government would be able to prosecute businesses for initiatives intended to promote inclusivity and support marginalised employee groups is a question that may well end up in court.
But even before this week’s actions, the industry’s environmental and diversity efforts were in retrenchment. Sustainability has moved down executive agendas, as concerns about consumer demand, inflation and geopolitics have moved up. And over the last year, brands have whittled down sustainability and diversity departments and missed key targets.
Many have merged DEI and sustainability into ESG functions or shifted diversity initiatives to human resources, with companies often claiming they can uphold the principles of diversity, equity and inclusivity without a formal structure. DEI proponents warn that dismantling or weakening these departments hurts employee retention, innovation and consumer reach.
While fashion leaders have been less full-throated in their endorsement of Trump than Silicon Valley’s tech titans, Bernard Arnault, chairman of leading luxury group LVMH, and his children Delphine and Alexandre, attended the inauguration and precious few fashion firms have followed the likes of Patagonia in defending diversity programmes. That’s in sharp contrast to recent years when brands jumped on movements like Black Lives Matter.
Amid shifting politics and popular sentiment, many appear to have decided that standing up for the DEI programmes they once flaunted is no longer worth the risk.
“It’s so difficult to know what the sentiment is that brands will probably sit on the sidelines,” said Quynh Mai, founder of digital creative agency Qulture. “No one’s demanding it of them anymore; there’s not a women’s march, not a BLM where citizens are demanding they have a stance and it’s safer to stay silent.”
THE NEWS IN BRIEF
FASHION, BUSINESS AND THE ECONOMY
Richemont’s market cap surpasses CHF 100 billion. Shares of the company controlled by billionaire Johann Rupert have risen for six straight days since the company last week reported better-than-expected sales for the most recent quarter. The results gave a boost to the wider luxury sector on optimism that the industry is recovering after weak demand.
Chanel cuts 70 US jobs warning of challenging luxury environment. The decision to reduce headcount follows previous moves to limit spending and will help Chanel “better adapt to the current economic challenges,” the company said. The 70 jobs represent about 2.5 percent of its US workforce.
Puma shares fall after sales and profit miss. Puma shares slid 18 percent on Thursday after the German sportswear brand reported lower than expected fourth-quarter sales and a decline in annual profit. The footwear brand’s fourth-quarter sales grew 9.8 percent in currency-adjusted terms, against the 12 percent growth expected by analysts.
China’s luxury sales are expected to remain flat in 2025, according to Bain. China’s luxury market declined by 18 to 20 percent in 2024, marking the end of a period of “exponential growth.” Discretionary items, including personal luxury goods, have been hard hit in China, which accounts for around a third of global luxury goods sales.
Trump plans to enact 25 percent US tariffs on Mexico and Canada by Feb. 1. Trump’s plans for tariffs on two nations vital for US energy and auto imports threatens to set off a trade war. Both Canada and Mexico have said they’d retaliate against American goods if Trump slaps tariffs on them.
Primark-owner ABF cuts guidance on tough UK market. The British conglomerate said it is now targeting low-single digit growth this year for the retailer. Primark’s like-for-like sales in the UK fell 6.4 percent in the 16 weeks to Jan. 4, a period that includes the critical holiday season.
EU plans to ban ‘forever chemicals’ in consumer products. Industrial applications such as plastics and electronics production account for most PFAS use, and won’t be subjected to the ban. Companies in Europe could face a “wave” of litigation over pollution or downplaying their environmental and health harms.
THE BUSINESS OF BEAUTY
Unilever India acquires Indian beauty brand Minimalist. Hindustan Unilever has taken a 90.5 percent stake in the company and will progress to full ownership within two years. Founded in 2020 by Mohit Yadav and Rahul Yadav, the brand netted revenues of INR 500 crore ($57.8 million) in 2024, and was reportedly valued at $342.3 million.
P&G stopped hiking prices and sales still grew last quarter. Organic sales rose 3 percent in the three months ended Dec. 31, P&G said Wednesday, the biggest increase in three quarters. The results suggest that the era of endless price hikes may be waning.
PEOPLE
Valentino-owner Mayhoola names Riccardo Bellini as managing director. In the newly created role, Bellini will work closely with Mayhoola’s chairman and CEO Rachid Mohamed Rachid to oversee strategy, operations, and development of the luxury group’s portfolio. Bellini previously held CEO positions at OTB’s Maison Margiela and Richemont’s Chloé.
MEDIA AND TECHNOLOGY
Academy says Oscars will go on as planned and “honour” LA amid wildfires. The ceremony will “celebrate the work that unites us as a global film community and acknowledge those who fought so bravely against the wildfires,” said CEO, Bill Kramer, and president Janet Yang in a letter. The Oscars ceremony will go on as scheduled on March 2, with comedian Conan O’Brien set to host.
Compiled by Yola Mzizi.
