Fashion wholesale operates within an environment of fluctuating trends and unpredictable consumer preferences. Retailers range from large department stores to independent boutiques, each facing distinct challenges. In addition to these long-standing concerns, broader economic uncertainties and trade policies are reshaping the way brands approach their supply chains and pricing strategies. Companies must navigate these disruptions while maintaining profitability, making strategic adjustments crucial for long-term stability.
Earlier discussions about the fashion industry’s challenges primarily focused on supply chain disruptions and shifts in consumer demand. While price fluctuations and retailer struggles have been ongoing concerns, the latest uncertainties related to tariffs and department store payment delays have intensified the risks. Brands previously sought price increases as a solution, but recent market behavior suggests that this approach may no longer be sustainable. The rise of independent retailers as a significant market force further distinguishes the current landscape from prior industry conditions.
How Are Tariffs Affecting the Fashion Industry?
Tariffs have emerged as a major source of concern for fashion brands. The possibility of increased costs has caused hesitation in supply chain adjustments. While initial tariffs involving Canada and Mexico may not lead to substantial disruptions, potential tariffs on China could have significant consequences. Companies across various market segments, from Walmart to LVMH, are evaluating their sourcing strategies due to concerns about manufacturing constraints in China.
Consumers are also aware of the implications of tariffs. Data indicates that over half of consumers anticipate rising prices, with many expecting supply chain disruptions. This sentiment is influencing purchasing behavior, as buyers shift towards more moderately priced fashion items rather than high-end luxury products. Luxury handbags priced above $1,000 have seen declining demand, while items in the $250 to $500 range have gained traction.
What Challenges Do Department Stores Present?
Fashion brands working with major department stores are encountering increasing payment delays. Many companies are struggling with cash flow due to postponed payments, which can extend for months. A luxury department store group recently announced a revised payment structure that will spread payments over twelve months, affecting suppliers’ financial planning.
“Great that they’re going to get paid, but to start payments in July and then divide it by 12, it’s just really a tough nut for (fashion suppliers),”
said JOOR CEO Kristin Savilia. The statement reflects broader industry concerns about financial stability. Additionally, some department stores are reducing the number of brands they carry, leading suppliers to reconsider their retail partnerships.
In response, many brands are shifting focus to independent retailers. These retailers now account for a growing portion of wholesale transactions, offering a more reliable payment structure. JOOR’s data reveals that independent retailer transactions increased from 47% to 59% of the platform’s gross merchandise value by the end of 2024.
To support these transitions, JOOR launched its Discover platform, which helps brands identify suitable retail partners using transactional data. Unlike traditional marketplaces, this tool offers insights into retailer compatibility, considering product categories, price points, and payment histories. The goal is to enhance wholesale efficiency and foster stronger relationships between brands and retailers.
Savilia expressed confidence in the growing role of independent retailers.
“For these brands, if they feel they need a more secure place to place their goods, where they’re going to get paid in a timely fashion, the independent retailer channel is growing and opening up,”
she said. JOOR’s data supports this trend, with connected brands and retailers showing a repeat business rate of 78%, surpassing the industry average.
Despite these changes, uncertainties remain. The fashion industry is adjusting to shifting consumer spending habits, supply chain disruptions, and evolving retail structures. While luxury brands have previously relied on continuous price increases, market resistance suggests a potential shift in pricing strategies. Some high-end labels remain unaffected, but many are reconsidering their pricing models.
The future of fashion wholesale will likely depend on how brands and retailers adapt to these challenges. Companies that diversify their retail partnerships and use data-driven insights to optimize their supply chains may navigate these changes more effectively. While department stores continue to play a role in the industry, brands appear to be exploring alternative retail strategies to ensure financial stability.
