There has been evidence of decline in the size and prominence of the fashion industry in New York City, reflecting societal and economic shifts attributable to the global COVID-19 pandemic and longer-term factors, says a report.
- Over the past decade, there have been 30% fewer graduates of fashion degree and certificate programmes; 50,000 fewer jobs; and a 13.6% decline in the fashion industry’s contribution to gross city product.
- The report chronicles the city’s ascent as a fashion capital over nearly two centuries as well as its struggles in recent years, synthesising economic research with interviews with more than 40 prominent industry-related voices—including brands, retailers, investors, media, landlords, academic leaders, and more.
- Evaluating the health of the city’s fashion industry, the report—At a Crossroads: New York City’s Status as a Global Fashion Capital—brought out by The Partnership for New York City that represents the city’s business leaders and largest employers, finds that without collective action from both industry and government, there is a grave risk of losing fashion’s defining contributions to the city’s economy, culture, and brand.
WHY IT HAPPENED: These losses are attributed to several factors, including:
- The proliferation of e-commerce and direct-to-consumer sales, as brands that used to benefit from being close to physical shoppers and foot traffic can now be anywhere and reach customers around the world.
- Closure of specialty stores that introduced and elevated emerging designers and brands such as Henri Bendel (closed in 2019), Barneys (2020), and Opening Ceremony (2020).
- Industry consolidation and the extraordinary growth of large Europe-based companies that moved the centre of gravity in the industry away from the US and toward Paris and Milan.
- The significant rise in cost of living and doing business in New York, which is now tied with Geneva as the third most expensive city in the world.
SALVAGING MATTERS: The report makes recommendations to put the industry on track to a strong future:
- Establish a coalition of fashion industry leaders from across the fashion ecosystem who will provide vision and funding for a well-connected, highly visible, and forward-looking local industry organisation that can work with the city and state economic development agencies to revive and strengthen New York City’s fashion “brand.”
- Launch a hybrid (in-person and virtual) Designer Accelerator to help designer brands grow their businesses, providing access to investment, marketing, and mentorship.
- Create a Central Designer Campus to provide new/emerging designers with a space to work, learn from each other, and share pooled resources.
- Develop curated storefronts/pop-ups to encourage the discovery of emerging designers by consumers and buyers, with a mix of brick-and-mortar and virtual offerings of rotating brands.
- Expand deeper industry partnerships with schools to encourage students to explore the wide range of careers in fashion, and to ensure that education aligns to the skillsets and knowledge that the fashion industry needs.
- Reinvigorate New York Fashion Week with increased promotion and by showcasing more emerging designers.
ABOUT THE PARTNERSHIP: The Partnership for New York City works with government, labour, and the nonprofit sector to promote economic growth and maintain the city’s prominence as a global centre of economic opportunity, upward mobility, and innovation.
- The Partnership Fund for New York City contributes directly to projects that create jobs, improve economically distressed communities, and stimulate new business creation.
WHAT THEY SAID:
For decades, New York has been home to some of the world’s most talented designers and successful fashion businesses. But local and global shifts have disrupted how these creative individuals start, grow, and scale their businesses, and fashion’s role in our economy has significantly diminished. This report provides a roadmap for both the public and private sectors to use our strengths, including our thriving tech industry, to regain lost ground and again become competitive on the global stage.
— Kathryn Wylde
President & CEO
Partnership for New York City
McKinsey was thrilled to support the Partnership for New York City in assessing New York’s fashion ecosystem and determining how the industry can continue to thrive in the ever-changing landscape of the city. This is another example of McKinsey’s ongoing commitment and support of New York, where we have been an active member of the business community for nearly 100 years. We believe this initiative will drive significant change and impact for all of those who work in this dynamic and creative industry.
— Joelle Grunberg
Partner in Retail Practice (Apparel, Fashion and Luxury brands)
McKinsey & Company
Innovation is not hampered by tradition [here]. Creativity, grit, inclusivity, resilience—that’s what New York is.
— Kim Fasting Berg
Executive Vice President (Marketing)
WME Fashion
