Current market / GARDE Editorial

Fashion in 2026: the market has no single direction

Luxury groups are diverging, retailers are tightening inventory, resale platforms are adding buyers, and unsold stock has become a regulatory issue. The figures resist a simple recovery story.

By GARDE Editorial · Published July 19, 2026 · Data checked July 19, 2026

The cleanest reading of fashion in July 2026 is that there is no clean aggregate story. Some large houses contracted in 2025. Others grew against the same difficult backdrop. Some retailers rebuilt margin without much sales growth. Listed resale platforms added buyers and merchandise volume while continuing to expose how operationally demanding secondhand can be.

That divergence matters. A headline such as “luxury slowdown” or “fashion recovery” compresses different categories, regions, price points, and business models into one line. The reported results show a market sorting more sharply by brand relevance, inventory quality, channel, and execution.

The reported signals point in different directions

Selected company disclosures available by July 19, 2026
Business and period	Reported result	Scope note
LVMH Fashion & Leather Goods, FY2025	€37.77bn revenue; organic revenue -5%. Recurring operating profit €13.209bn, -13%.	A segment of LVMH, not the whole luxury market.
Kering, FY2025	Group revenue €14.675bn, -10% comparable. Gucci -19% comparable; Bottega Veneta +3%.	Group figures were restated to exclude Kering Beauté.
Prada Group, FY2025	Net revenue €5.718bn, +8% organic. Prada retail -1%; Miu Miu +35%.	Versace joined the group on December 2, 2025.
Richemont, year ended March 2026	€22.4bn sales, +11% at constant rates; growth across business areas, regions, and channels.	Jewellery is central to the group; this is not an apparel proxy.
Burberry, year ended March 2026	£2.420bn revenue, -2% reported and flat at constant exchange rates; comparable store sales +2%.	A company turnaround, not evidence of a sector-wide rebound.
H&M, six months ended May 2026	Local-currency sales -1%; adjusted operating margin 7.8% versus 6.4% a year earlier.	Mass-market retail, reported in Swedish kronor.

The contrast inside groups is as useful as the contrast between them. Kering's 2025 disclosure put Gucci down 19% on a comparable basis while Bottega Veneta grew 3%. Prada Group reported Prada retail sales down 1% while Miu Miu grew 35%. Richemont, whose jewellery exposure makes it a different kind of luxury group, reported double-digit constant-currency growth at its Jewellery Maisons.

These are not interchangeable metrics. They do show that a difficult environment does not distribute its effects evenly. Category, house, and customer mix are doing more work than a single market label can explain.

Margin is being rebuilt through inventory discipline

Burberry's year ended March 2026 is a useful recovery example with limits. Revenue was still down 2% as reported and flat at constant exchange rates, but comparable store sales rose 2% for the year and 5% in the fourth quarter. The company reported a 67.9% gross margin, up 530 basis points at constant exchange rates, and connected that improvement to a better quality of sales after the prior year's inventory reset.

H&M's first half tells a related story at a different price point. Sales fell 1% in local currencies, yet operating margin excluding restructuring costs improved to 7.8% from 6.4%. At the end of May, stock-in-trade was down 10% in reported Swedish kronor and 2% after adjusting for currency. Stock represented 15.8% of rolling twelve-month sales, down from 16.6%.

Neither disclosure proves that lower inventory automatically creates a healthier business. H&M also said tighter inventory had sometimes limited its ability to meet demand. The more careful conclusion is that buying, allocation, markdowns, and stock availability are being managed as one problem. Volume alone is not the operating target.

Resale demand is visible, and so is the work behind it

Two US-listed resale platforms provide a narrower but useful signal. The RealReal reported more than $2bn in gross merchandise value for 2025, with full-year GMV up 16% and revenue up 15%. Its annual filing also states that returns and order cancellations equalled 24.2% of GMV. The company does not deduct those returns and cancellations from the GMV measure, which is why the definition matters.

ThredUp reported 1.7 million active buyers and 6.1 million orders in 2025, up 29.5% and 25.3% respectively. It also reported a $20.2m loss from continuing operations. Growth in buyers and orders can sit beside the cost of processing, storing, describing, pricing, shipping, and returning millions of unique pieces.

These companies do not define the whole secondhand market. They do show that resale is substantial enough to measure as operating infrastructure, not merely as a cultural preference. They also show why demand and easy economics should not be treated as the same thing.

The EU unsold-goods ban starts today

From July 19, 2026, the European Union's Ecodesign for Sustainable Products Regulation prohibits large companies from destroying unsold apparel, clothing accessories, and footwear, subject to defined derogations. The rule applies to medium-sized enterprises from July 19, 2030. Micro and small enterprises are exempt from this prohibition.

The definition is stricter than ordinary language suggests. For this rule, sending a product to recycling is generally treated as destruction; preparing it for reuse, refurbishment, or remanufacturing is not. The standard disclosure format under the Implementing Regulation applies from March 2, 2027, with disclosures due within twelve months after the relevant financial year ends.

The Commission estimates that 4% to 9% of unsold textiles in Europe are destroyed before being worn. The new rule does not remove forecasting error, returns, damage, or seasonal demand. It changes the available exit. Surplus stock is no longer only a markdown or waste-management question for the companies in scope. It is a disclosure and compliance question.

Trust is part of the market infrastructure

The OECD and European Union Intellectual Property Office estimated in a 2025 report that counterfeit goods represented up to $467bn, or 2.3%, of global imports in 2021. Clothing, footwear, and leather goods together made up 62% of seized counterfeit goods in the underlying data.

The date matters: this is a 2025 publication built on 2021 customs data, not a measurement of counterfeit trade in 2026. Its value is structural. Fashion categories remain unusually exposed, and the record around origin, custody, condition, and authenticity has commercial value wherever goods move between owners and platforms.

What the data does not let us say

These disclosures do not produce one defensible global fashion growth rate.
Public companies are not a representative sample of every brand, retailer, or market.
Sales alone do not reveal why a customer bought, delayed, returned, or resold an item.
Constant-currency, comparable-sales, GMV, and adjusted-profit measures should not be compared as if they were the same measure.

The state of play

Fashion in 2026 is not moving in one direction. It is separating. Brand performance is diverging inside the same price tier. Retailers are trying to earn margin through better stock and fewer markdowns rather than volume alone. Resale is adding buyers while carrying real handling and return costs. European regulation is making surplus inventory harder to erase. Counterfeit exposure keeps provenance in the commercial conversation.

The useful conclusion is modest: the market is rewarding a better record. Not more certainty than the data supports, but clearer knowledge of stock, condition, movement, source, and demand. In a split market, context is not decoration around the transaction. It is part of the transaction.