“Danish fashion companies have always been adept at adapting to major changes.”
Nikolai Klausen, Director of Merk (formerly Wear and Dansk Detail).
What is the current situation in the fashion industry?
For many fashion companies, 2023 has been a tumultuous year compared to 2022, where many companies had very strong financial reports. Particularly the second half of 2023 has been challenging for most due to declining consumption, lack of reorders, less appetite for mid-collections, and excess inventory. In 2023, we also saw for the first time in many years a decline in online sales, which has otherwise been a significant growth driver.
What challenges do you see for the fashion industry in 2024?
Fundamentally, it’s about adjusting costs if you experience a decline in sales. There are still more goods on the market than there is demand, and consumers continue to be reluctant to spend money, which is true across Europe. However, I believe that many fashion companies will manage through 2024, but I am more concerned about retail.
What opportunities do you see for the fashion industry in 2024?
Fortunately, there are fashion companies that are experiencing growth and can make money. So, there are opportunities out there if you are close to your customers and if you, as a store owner, work with your store. It requires visible leadership, engagement, and the ability to adapt. Danish fashion companies have always been good at adapting to major changes, aware that not everyone makes it. Some close, some are sold, and others buy up.
What are your expectations for the export of the fashion industry in the new year?
I expect a total decline in exports. But that doesn’t mean that everyone will see a drop in exports. Experience shows that there will always be opportunities, and the skilled will find growth in the market. However, our largest export market, Germany, will have a difficult 2024 with a significantly declining consumption. Therefore, as a fashion company, you need to be very close to your customers in Germany and be very cooperative if you want to maintain your figures in Germany.
What is your advice for the fashion industry to get through 2024 in the best way?
It’s always difficult to give advice on others’ business. But for fashion companies: Quick adaptation of costs, get close to your customers, be solution-oriented, and ensure retention of your key employees. For retail: Reduce inventory, more facts over feelings, fewer suppliers, ensure retention of your key employees, and support the local trade association.
