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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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Education

The Science Behind Sparkle: How Lab-Grown Diamonds Are Created

A New Era of Diamond Creation

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In recent years, lab-grown diamonds have captured the attention of jewellers, consumers, and investors alike. Beyond their beauty, what makes these gems truly fascinating is the science behind their creation. Unlike imitation stones, lab-grown diamonds share the same physical, chemical, and optical properties as natural diamonds — the only difference lies in their origin.

At the heart of this innovation are two cutting-edge processes: High Pressure High Temperature (HPHT) and Chemical Vapor Deposition (CVD). These methods recreate the intense conditions under which natural diamonds form deep within the Earth, allowing scientists to produce genuine diamonds in a controlled laboratory environment.

HPHT: Diamonds Born Under Extreme Conditions

The High Pressure High Temperature (HPHT) method mimics the natural diamond-forming process that occurs about 150 kilometers below the Earth’s surface.

  1. Starting Point – The Seed:
    A small diamond seed, usually a thin slice of an existing diamond, is placed inside a carbon-rich chamber.
  2. Simulating Nature – Pressure and Heat:
    The seed is exposed to extreme conditions — pressures of about 5–6 GPa (equivalent to the pressure at the Earth’s mantle) and temperatures of 1,400–1,600°C.
  3. Crystal Growth:
    Under these conditions, the carbon source melts and crystallizes around the diamond seed, forming a larger crystal over several weeks.

The result is a high-quality diamond crystal that is virtually indistinguishable from its natural counterpart. HPHT diamonds often exhibit exceptional clarity and can be produced in a range of sizes and colors, including colorless, yellow, and blue varieties.

CVD: Diamonds Grown in a Plasma Cloud

The Chemical Vapor Deposition (CVD) process is a more recent innovation that uses advanced plasma technology to grow diamonds atom by atom.

  1. Preparing the Chamber:
    A thin diamond seed is placed inside a vacuum chamber filled with carbon-rich gases, typically methane and hydrogen.
  2. Creating Plasma:
    The gases are energized using microwaves or lasers, forming a plasma cloud that breaks down the molecular bonds of the gases.
  3. Diamond Formation:
    Carbon atoms released from the plasma settle onto the seed layer, crystallizing into pure diamond over the course of several weeks.

The CVD method allows for greater control over purity, color, and size, making it ideal for high-end jewellery applications. It also produces diamonds that are free from many of the inclusions typically found in natural stones.

Technology Meets Sustainability

Both HPHT and CVD processes are transforming the jewellery industry not only through technology but also through sustainability. Lab-grown diamonds require no mining, dramatically reducing environmental impact. Many manufacturers are also transitioning to renewable energy sources to power their production facilities, making these diamonds even more eco-conscious.

Furthermore, traceability is a defining advantage. Every lab-grown diamond can be tracked from its creation, offering complete transparency — a growing priority among modern consumers seeking ethical luxury.

Crafting the Future of Jewellery

As consumer awareness grows, lab-grown diamonds are redefining what it means to own something precious. With their scientific precision, sustainable creation, and stunning beauty, they represent the perfect harmony between innovation and artistry.

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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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