Fashion supply chains: 2025’s risks and trends

Fashion supply chains are under incredible duress in 2025 due to a litany of raw material procurement, labor and logistics management challenges.

Participating fashion leaders in the BoF-McKinsey State of Fashion Executive Survey — which polled 345 individuals between August and October 2024 — are pessimistic about the year ahead. According to the survey findings, 39% of fashion executives anticipate industry conditions to get worse, while 41% expect the market to remain the same.

“Consequently, 2025 is likely to be a time of reckoning for many brands,” according to McKinsey’s State of Fashion 2025 report. “The upshot is that there is still opportunity to be found for brands that move nimbly and are quick to adapt to upheavals in a chaotic marketplace.”

Here are three trends fashion supply chains will need to navigate this year. 

Navigating potential tariffs

President Donald Trump’s second term presents risks to fashion supply chains, with tariffs a leading concern, said Sheng Lu, a professor and director of graduate studies at the University of Delaware’s department of fashion and apparel studies.

Trump signed executive orders implementing tariffs on imports from Canada, Mexico and China over the weekend. Although those on Mexico and Canada have been delayed until March, the duties on China-made goods went into effect Tuesday, with the country unveiling its own tariffs in response. 

According to Lu, tariffs could raise sourcing costs and prompt inflationary pressure, ultimately impacting consumer purchasing power and the overall U.S. economy.

Lu said that the Consumer Price Index is already high, and continuing to hike tariffs on China-made goods and apparel would only be “adding fuel to the fire.”

However, fashion retailers have been preparing for Trump’s tariffs. While discount retailers like TJX believe tariffs will provide opportunities, many other companies have devised plans to mitigate the impact of higher duties.

In November, Steve Madden told analysts it aims to slash its imports from China by up to 45%. Similarly, sporting goods retailer Academy Sports and Outdoors has reduced the percentage of goods it sources from China to best position itself for the next four years. 

Despite diversifying sourcing practices, procurement and production networks are expected to continue leaning on Asia, said Lu. 

Per McKinsey’s outlook, “fashion brands are likely to double down on diversifying their sourcing footprint in Asia and lay the found…