Europe's fashion industry is bracing for inflation and the energy crisis

Energy crisis impacting multiple industries

After making a strong recovery from the pandemic, Europe’s luxury goods industry must now contend with the challenges brought by much higher than anticipated inflation, particularly around energy prices.

Almost 30% of the European luxury goods industry's revenues are derived from abroad, with travel a key driver of income. The industry, which is at the very top of the consumption pyramid, managed to exit the pandemic in a stronger position than many others by significantly improving e-commerce coverage, especially with regards to the all-important Asian customers, who were affected by strict travel restrictions. The pandemic also helped the industry to bring in efficiency measures that allowed better shaping of inventories and the broader supply chain. Marketing campaigns were also enhan...