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The State of Fashion:Luxury 2025

McKinsey & Company and BoF Insights report

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Global fashion faces challenging landscape

The ninth annual State of Fashion report by McKinsey & Company and BoF Insights highlights the challenging landscape the global fashion industry faces in 2025. With economic uncertainty, changing consumer behaviors, and evolving market dynamics, the year is expected to be a critical juncture for many brands.

Overview

Economic Challenges: 80% of executives foresee no improvement in the industry, and only 18% rank sustainability as a top concern, down from 29% in 2024. Consumer confidence and spending remain major issues.

Key Drivers: Price sensitivity, the rise of dupes, climate change acceleration, and reshuffled global trade create a difficult environment.

Geographic Shifts: Growth engines in Asia, particularly India, Japan, and Korea, are becoming pivotal as China faces economic challenges.

Themes Driving the Agenda

Trade Reconfigured: Brands are diversifying sourcing to align with evolving trade policies and sustainability targets. Nearshoring and political alignment are critical considerations.

Asia’s Growth Engines: While China slows, India, Japan, and Korea are emerging as vital markets for growth.

Discovery Reinvented: AI-driven curation in e-commerce promises to help overwhelmed shoppers navigate abundant choices.

Silver Spenders: The growing over-50 demographic offers new opportunities for incremental growth, emphasizing the need for inter-generational appeal.

Value Shift: Resale, off-price, and dupe markets are flourishing as consumers seek better value amid persistent economic pressures.

The Human Side of Sales: Enhancing in-store experiences by empowering well-trained sales staff can drive demand for physical retail.

Marketplaces Disrupted: Online non-luxury marketplaces face existential challenges, struggling with declining demand and rising customer acquisition costs.

Sportswear Showdown: Challenger brands are rapidly gaining market share, driving competition in the dynamic sportswear segment.

Inventory Excellence: Advances in inventory management and agile supply chains are key to addressing margin pressures and meeting sustainability goals.

The Sustainability Collective: Collective action is essential to meet decarbonization goals despite consumer reluctance to pay premiums for sustainable products.

Looking Ahead

The industry’s outlook remains sluggish, with revenue growth stabilizing in low single digits. Luxury’s dominance in profit creation is challenged by non-luxury segments for the first time since 2010. Brands that act nimbly to address geographic shifts, demographic changes, and technological innovations will find opportunities amid the turbulence.

Growth in the jewellery sector will be fueled by rising demand from ultra-high spenders and continuous investment from luxury houses in technology and expertise.

The new playbook for 2025 emphasizes adaptability, localization, and sustainability, while redefining value and consumer engagement. The fashion sector must innovate, embrace technology, and prioritize long-term resilience to navigate this period of reckoning successfully.

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JB Insights

Gold Rate-Locking and Advance-Booking Ahead Of Dhanteras 2026

The Strategy Is To Mitigate The Impact Of Heightened Price Volatility and Recent Bullion Price Corrections On Consumer Sentiment

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Ahead of Dhanteras on November 6, 2026, Indian jewellery retailers are aggressively leveraging advance-booking and gold rate-locking schemes to mitigate the impact of heightened price volatility and recent bullion price corrections on consumer sentiment.

Following subdued sales during Dussehra, retailers are banking on the dual convergence of Dhanteras and the upcoming wedding season to drive robust revenue recovery. Leading national and regional brands report optimistic projections, bolstered by strong interest in both heavy bridal pieces and budget-conscious solutions like lightweight jewellery and old-gold exchanges.

1. Market Context & Bullion Price Trends

Recent gold and silver trading ranges reflect elevated price levels driven by ongoing global geopolitical uncertainty, sustained central-bank purchases, and fluctuations in international currency markets.

  • Gold Prices: Standard 10-gram rates are hovering between Rs 1.42 lakh and Rs 1.44 lakh.
  • Silver Prices: Standard 1-kilogram rates range from Rs 1.95 lakh to Rs 1.96 lakh.

While high prices have created initial friction, recent price corrections have provided an entry window for consumers, encouraging advance commitments ahead of expected festive demand spikes.

 Retail Outlook & Strategic Schemes

To capitalize on festive tailwinds and hedge consumers against potential price surges, major retailers—including Kalyan Jewellers, Joyalukkas, Senco Gold & Diamonds,—have deployed price-protection mechanisms.

Rate-Locking Mechanisms

Advance-booking schemes allow buyers to reserve jewellery by locking in current gold prices. If prices rise before final delivery, consumers pay the lower locked-in rate; if prices decline, consumers benefit from the lower market price at the time of final settlement.

Consumer Buying Patterns & Product Demand

Rising gold rates are bifurcating consumer preferences into two distinct buying trends:

High-Value Bridal & Heritage Segment

Wedding-related purchasing remains a resilient anchor for the market. Consumers continue to allocate budgets toward high-ticket items, including:

  • Heavy Gold Pieces: Essential traditional bridal sets.
  • Heritage & Polki Work: Intricate traditional craftsmanship.
  • Diamond Jewellery: Increasingly favored in modern bridal trouseaus.

Budget Management & Value Optimization

To offset high unit costs for non-wedding or casual festive purchases, consumers are adjusting their buying strategies:

  • Lightweight Jewellery: Lower overall grammage to fit fixed budget caps.
  • Old-Gold Exchanges: Recycling existing family holdings into contemporary designs.

Key Insight: Senco Gold reported that old-gold exchanges now account for more than 50% of its overall business, underscoring exchange programs as the single most critical driver of sales enablement during high-price regimes.

 Operational Outlook & Risks

The immediate business outlook for Indian jewellery retailers hinges on execution during the final days leading up to Dhanteras and the subsequent wedding peak:

  1. Conversion Metrics: The final festive revenue numbers will depend on the successful conversion rate of advance bookings into finalized, fulfilled sales.
  2. Margin Protection: While rate-locking drives volume, unhedged price movements pose minor margin risks for smaller retailers lacking robust bullion hedging practices.
  3. Inventory Management: Retailers must balance inventory stocks between high-margin bridal inventory and fast-moving, lightweight everyday wear.

Indian jewellery retailers are entering the Dhanteras 2026 period with high expectations, relying on structural price-protection tools to overcome earlier seasonal slumps. As advance bookings build momentum, old-gold recycling and rate-locking schemes are effectively bridging the gap between record-high bullion prices and strong consumer appetite for seasonal gold accumulation.

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JewelBuzz is Asia’s First Digital Jewellery Media & India’s No.1 B2B Jewellery Magazine, published by AM Media House. Since 2016, we’ve been the trusted source for jewellery news, market trends, trade insights, exhibitions, podcasts, and brand stories, connecting jewellers, retailers, and industry professionals worldwide.

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