Stitched Up: How Tariffs Are Unraveling The Fashion Industry

Welcome back pricing people! This week, we’re stepping into the world of fashion where tariffs are causing some serious wardrobe malfunctions. From luxury brands to fast fashion giants, let’s explore how trade tensions are reshaping the style landscape.

Seams Like Trouble

According to the American Apparel & Footwear Association, a staggering 97% of apparel sold in the US is manufactured abroad, with complex supply chains that span multiple countries for a single garment. When tariffs hit, the ripple effects are felt from factories to farms across the globe.

Unsurprisingly, fashion’s biggest names are feeling the impact. Brands from luxury giant LVMH to athleisure favorite Lululemon have cut their forecasts in recent months, bracing for the margin impact of potential tariffs.

Fast Fashion, Fast Pricing

The constantly shifting trade landscape is creating chaos in boardrooms. Chinese titans Shein and Temu raised prices in April when faced with 145% tariffs and a de minimis change. The impact was immediate. Temu’s US daily active users dropped 52% between March and May, while Shein saw a 25% dip according to market intelligence firm Sensor Tower. However, following a 90-day pause on Chinese tariffs, both brands quickly announced price cuts.

With US sales slowing, these e-commerce giants are now boosting ad spending in Europe. A strategic shift that has local brands worried about being flooded out of their own markets.

Trend Forecasting Gets Frayed

Perhaps the most fashionable concern of all? Urban Outfitters warned that tariff uncertainty is forcing early inventory purchases, risking the ultimate faux pas – being out of step with fall trends when they actually arrive.

As this drama continues to unfold, one thing is certain: prices must change. It’s not a question of if, but when, by how much, and how quickly fashion brands can adapt. Every company will need to cut its cloth according to the tariffs it faces.

So talk to us today about the new Tariff Price Planner from Flintfox by Enable. Our solution lets you model pricing scenarios and try different profit margins on for size. The Tariff Price Planner fully integrates into any ERP system for lightning fast price updates. Until next time, power to you pricing people!