Deloitte: Despite import tariffs, 90 percent of investors remain active in fashion and luxury

According to Deloitte’s ‘Fashion & Luxury Private Equity and Investors Survey 2025’ report, 90 percent of investors remain active in the fashion and luxury sector. This is despite eight out of ten respondents expecting import tariffs to negatively impact the market. North America (35 percent), Europe (33 percent) and Asia (29 percent) are seen as the regions most exposed to increasing trade barriers.

The survey was conducted globally among a panel of 60 private equity investors and more than 114 companies operating in clothing and accessories; watches and jewellery; cosmetics and perfumes; luxury cars; luxury hotels; private jets; cruises; furniture; yachts; and luxury restaurants.

Fewer mergers and acquisitions in the sector, with 333 deals globally in 2024

The number of mergers and acquisitions in the sector is declining, with 333 deals globally in 2024 (25 fewer than in 2023). The first half of 2025 confirms this trend with 162 transactions. This represents a 14 percent decrease compared to the 188 transactions in the same period in 2024.

“After years of strong post-Covid growth, fashion and luxury companies are seeing a slight contraction in turnover (minus 2 percent) and profit margin (minus 2.1 percent). This is mainly due to the declining growth of the Chinese market and the difficulties in the luxury car sector,” the report stated.

“Despite the persistent macroeconomic and geopolitical uncertainty, the fashion and luxury sector continues to attract investors,” emphasised Elio Milantoni, senior partner, mergers and acquisitions at Deloitte Advisory, in a press release. “92 percent of funds are considering investments in the sector, albeit more cautiously than last year.” He added: “The areas of greatest interest are cosmetics and perfumes (25 percent); the production of clothing and accessories (24 percent); the retail of clothing and accessories (14 percent); and furniture (11 percent). More than half of the investors are focusing on medium-sized companies, with the aim of promoting the consolidation of the sector.”

“Recent macroeconomic developments,” added Federico Bazzani, partner at Deloitte Advisory, “have led to uncertainty and complexity for luxury companies, with a negative impact on both turnover and profit margins. The decline is strongly influenced by the Chinese market, despite the growing interest of investors in the Middle East and India. It is therefore crucial for companies in the sector to find new positioning and differentiation strategies to offset the loss of turnover and reactivate distribution channels.”

The impact of artificial intelligence on investment strategies is increasing. Sustainability remains important.

According to investors, the business areas most affected by the increasing use of artificial intelligence are: customer experience (28 percent); marketing and sales (24 percent); security (19 percent); and production and supply chain (13 percent).

Sustainability remains an important factor in investment strategies. Investors believe that the cosmetics and perfume sector (27 percent), in particular, is at the forefront of innovations in the field of ESG.

This article was translated to English using an AI tool.

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