For the first time in 15 years, consumer fashion brands may surpass luxury labels in market dominance, according to AI-powered research by Retviews. Economic uncertainty and pricing shifts are accelerating this trend.

Shaken by geopolitical unrest and tightening global economic conditions, 2025 is shaping up to be a year of transformation for the fashion industry. This shift is outlined in a new report from Lectra, a provider of technical solutions for industrial sectors, using data from its AI-based market intelligence tool, Retviews.

Luxury fashion faces headwinds

One of the report’s most striking findings marks a potential market reversal: for the first time since 2010, brands outside the luxury segment could dominate global fashion sales. Luxury players are currently facing declining performance due to consumer fatigue and a global sales slowdown—particularly pronounced in the United States.

In January, McKinsey estimated that U.S. import tariffs could lead to a drop in consumer spending ranging between $46 billion and $78 billion annually, putting further pressure on discretionary categories such as high-end fashion.

Consumer brands shift toward premium positioning

At the same time, consumer fashion brands are repositioning themselves by adopting premium pricing strategies. The Retviews analysis highlights that many brands are leaning into elevated product offerings to differentiate themselves from fast fashion competitors.

In Europe, brands are now increasingly offering products priced above €25, while scaling back on lower price-point assortments. Zara, for example, has expanded its range of items priced over €34, while Uniqlo has grown its share of products in both the €17–34 and €76–85 price ranges.

Across Europe, the average price of fashion items has increased from €38 in 2023 to €42 in 2025. This trend is also reflected in the United States, where average prices rose from $57 to $64 during the same period, according to Retviews. Additionally, the European Union is now confronting a 15% hike in customs duties, which may further shift competitive dynamics across regions.

Data-driven strategies key to adaptation

“Optimizing assortments, increasing direct sales, and enhancing market intelligence will be key to succeeding in such an unpredictable environment,” said Antonella Capelli, President of the EMEA region at Lectra. Early winners are already embracing these strategies in 2025—namely, consumer fashion brands.

According to Lectra, many of these brands are also adapting their promotional tactics. Rather than relying on traditional seasonal discounting models, retailers like Uniqlo are implementing year-round low pricing strategies, allowing them to turn over inventory quickly while maintaining brand image and value perception.

This momentum is also influencing pricing strategies in select high-demand product categories. Non-luxury leather bags have seen a 20% sales increase between January and May 2025 compared to the same period in 2024. Small leather goods have grown 23% in the same window. Alongside entry-level sportswear and T-shirts, these categories are playing a central role in the broader industry’s upward trajectory.