The expansion comes at a pivotal moment, with apparel and footwear sales in Saudi Arabia and the UAE projected to reach $23 billion by 2026. This growth underscores the significant opportunities for brands in the Middle East fashion sector. Among the first partners in the region is SUMWON Studios, a Dubai-based brand currently boasting $350 million in annual revenue, which aims to scale to $1 billion through this collaboration. Nitin Passi, CEO at SUMWON Studios, emphasized the strategic benefits, stating, “Our partnership with Shein allows us to scale efficiently while solving one of fashion’s core challenges: aligning supply with real-time demand.” Passi, also the founder of the relaunched Missguided brand under the Xcelerator program, noted its trajectory to achieve £200 million in revenue within two years.

Shifting Consumer Preferences in Online Retail

Beyond its expansion, Shein has also unveiled significant findings from a new survey conducted among 10,000 UK consumers, predominantly aged 18 to 34. The research sheds light on evolving consumer trends and challenges the notion of younger shoppers being solely impulse-driven. A key takeaway is the strong prioritization of value shopping in online retail.

Key Survey Insights on UK Spending Habits

The survey revealed that 71% of respondents consider price the most crucial factor when making fashion purchases online. This was followed by the variety of styles available and the overall quality for the price point. Financial prudence was evident, with 55% of Shein’s consumers reporting an annual budget of less than £100 on the platform, and only 11% spending between £250 and £500 annually.

In terms of product preferences, practical and everyday styles were the most popular in the first half of 2026, accounting for 32% of purchases. Occasion wear followed closely at 31%, with statement pieces making up 23%. Best-selling items during this period included striped tops, casual camisoles, and neutral tones, indicating a leaning towards versatile wardrobe staples. The survey also highlighted a growing interest in seasonal planning, with “summer” emerging as a leading search term in the first quarter, and items like linen trousers and halterneck dresses trending. This suggests consumers are planning their seasonal wardrobes earlier to find items that seamlessly transition across holidays, events, and daily wear.

Martin Reidy, director of corporate affairs at Shein, summarized these fashion market trends: “This research challenges the stereotype of younger consumers as purely impulse-driven shoppers. What we’re seeing is a generation that is highly value-conscious and intentional about spending. Versatile wardrobe staples, practical styling and early holiday planning are shaping purchasing behaviour far more than fast-moving micro-trends.” These insights offer valuable perspectives on the current landscape of the fashion industry and online retail, emphasizing the growing importance of value shopping and thoughtful consumption among younger demographics.

New Budget Priorities for Economic Development

A distinctive feature of this national budget is its pronounced emphasis on crucial areas such as education, healthcare, and social protection. The budget sets an ambitious growth target of 6.5% for the forthcoming fiscal year. Complementing this, ten critical priorities have been clearly outlined. These include fostering investment-driven employment generation, cultivating a production-oriented economy, pursuing deregulation, ensuring financial sector stability, and securing energy reliability. The BGMEA regards these measures as highly significant and supportive for the nation’s industrial expansion, trade growth, and, crucially, for facilitating a smooth graduation from the least developed countries (LDC) category. This holistic approach underpins the broader economic development goals.

Apparel Sector Faces Headwinds

The announcement of the new national budget coincides with an urgent BGMEA meeting convened to address a “persistent decline” in garment exports. The Apparel sector, a cornerstone of the Bangladesh economy, has been contending with a global economic slowdown and escalating domestic operational costs. This combination of factors has led to a 3.41% decrease in apparel export earnings, a 1.55% drop in average unit prices, and a 7.93% reduction in the opening of back-to-back Letters of Credit (LCs) for raw material imports during the current fiscal year. Consequently, approximately 400 factories within the Apparel sector have ceased operations over the past three years, highlighting significant challenges.

BGMEA Calls for Critical Policy Support

While the reform-oriented announcements within the Bangladesh Budget Economic Shift are generally seen as beneficial for industries, the BGMEA stresses that the current difficulties faced by the Apparel sector necessitate specific policy support measures. These measures are deemed essential to safeguard the industry’s competitiveness, given its pivotal role as a primary source of employment and foreign exchange earnings for the nation.

The BGMEA has put forth several BGMEA recommendations it hopes will be incorporated into the budget to mitigate the ongoing crisis in the Apparel sector. These include a reduction in withholding tax, a decrease in income tax applied to cash incentives, ensuring a reasonable corporate tax rate, eliminating double taxation in the sub-contracting process, and reducing import duties on man-made fibre-based apparel inputs.

In a formal statement, the organization underscored its belief that “the apparel sector is not only the country’s leading foreign exchange-earning sector but also a major driver of employment generation for millions of people.” To maintain international market competitiveness post-LDC graduation, the BGMEA emphasizes the necessity of reducing business costs, guaranteeing an uninterrupted and affordable supply of gas and electricity, and further streamlining customs and port-related procedures. This aligns with their prior plea in April for government intervention to resolve an ongoing gas and electricity crisis impacting the Apparel sector, as the energy challenges have driven up raw material prices and transportation costs, thereby increasing overall production expenses. These BGMEA recommendations are crucial for sustained economic development.

The report, which spans a wide array of goods including apparel, footwear, and textiles, proposes the application of tariffs on products from the investigated economies. Key apparel and textile manufacturing hubs such as China, Vietnam, Bangladesh, and India are among the nations targeted. Hess emphasizes the importance of carefully managing the resulting cost pressures throughout global supply chains, noting that these restrictive trade measures often push financial burdens downstream, where they are most acutely felt by suppliers and their workforces. For many suppliers already operating on very tight margins, any additional costs could severely increase their vulnerability.

Navigating Supply Chain Vulnerabilities

Cascale’s data, collected through Better Buying, consistently reveals that periods of commercial uncertainty and financial strain exacerbate operational challenges within the apparel supply chain. Suppliers frequently report heightened difficulties with planning stability, absorbing costs, managing production changes, and coping with order volatility. As these pressures intensify, the risks associated with excessive overtime, unauthorized subcontracting, and other critical labor-rights concerns also tend to rise. The potential Forced Labor Trade Impact underscores the urgency for brands and retailers to address these vulnerabilities proactively.

In response to these emerging risks, Cascale advocates for proactive strategies focused on forward planning, fair terms, and consistent communication with suppliers. Hess stresses that these fundamentals become even more crucial during times of disruption. By adopting responsible purchasing practices, companies can empower their suppliers to navigate uncertainty, maintain stable operations, and continue supporting their workers.

While individual companies may have limited control over broad trade policy changes, their purchasing decisions are entirely within their purview. At a time marked by heightened uncertainty, feedback from suppliers consistently points to a clear need for greater predictability, stronger communication, and commercial practices that enable effective planning. These are the foundational conditions that not only help build robust supplier resilience but also support sustained business performance and ensure worker wellbeing across the apparel supply chain. Brands and retailers committed to ethical practices can significantly mitigate the negative repercussions of new trade measures by prioritizing such responsible purchasing strategies.

Manufacturing Sector Gains Ground on Textiles and Higher Working Days

The growth in new orders and production was largely fueled by the textiles and apparel industry, according to the Sri Lanka PMI May 2026 data. New orders climbed sharply to 52.6 from 36.4 in April, while production rose to 54.6 from 30.5, reflecting a decisive swing back into expansion territory. Employment in the manufacturing sector also improved significantly, moving to 59.7 from 47.0, a clear sign of stronger factory-level activity across the country.

Stock of purchases increased to 52.6 from 44, supported by rising demand and growing production requirements. Manufacturers attributed a portion of this improvement to a higher number of working days in May compared with the previous month, which gave factories more room to ramp up output and fulfill pending orders.

Supply Chain Delays Persist

Despite the positive momentum in manufacturing expansion, supplier delivery times remained extended. The delivery times index stood at 66.3, indicating that supply chain delays continued to be a challenge for manufacturers. Businesses also highlighted that the difficult operating environment linked to the ongoing Middle East conflict kept affecting both operations and overall sentiment within the sector.

Services Sector Growth Led by Financial and Professional Services

The Sri Lanka PMI for services recorded an index value of 56.9 in May 2026, signaling a clear expansion in services activities compared with the previous month. The services sector growth was primarily driven by stronger performance in financial services, professional services and other personal services.

New business volumes increased across the sector, with financial and professional services leading the way. Wholesale and retail trade, personal services and goods transportation also contributed positively to the overall expansion. However, employment in the services sector declined during the month due to contract expirations, retirements and resignations. Backlogs of work also continued to fall, and at a faster pace than recorded in April.

Outlook Remains Optimistic Despite Global Risks

Looking ahead, businesses in both the manufacturing and services sectors remain optimistic about activity over the next three months. Manufacturing firms expect operations to stay above the neutral threshold, while service providers anticipate stronger demand supported by higher tourist arrivals during the Perahera season and improving domestic economic conditions.

The Central Bank noted, however, that risks associated with the Middle East conflict and broader global uncertainties continue to weigh on business confidence. These factors could affect future growth prospects for both sectors, even as the near-term indicators remain encouraging. The Sri Lanka PMI May 2026 readings suggest resilience in the economy, though external headwinds demand cautious optimism from businesses and policymakers alike.

Analysts say the likely impact is not simply a loss of advertising inventory, but a fundamental slowing of the feedback loop that has powered fast fashion’s “see it, buy it” economy. The UK under-16 social media ban would remove a major channel through which micro-trends spread, gain social proof, and translate into near-immediate purchases—an especially critical dynamic for online-first ultra-fast fashion platforms.

Analysts feel the removal of these discovery engines could significantly weaken the pace at which trends reach younger consumers. Social media platform such as TikTok and Instagram have sped up the cycle between trend discovery and purchase, benefiting online fast fashion brands such as Shein, Temu and Cider most. Without those platforms, the trend cycles and their adoption among those under-16s are likely to slow heavily. For brands and retailers such as Shein, which operate primarily by releasing constant small batches of new products, this slowing cycle among young teen shoppers will be at odds with their business model, potentially leading to excess stock and the need to discount already low prices. However, these brands have time to react and adjust their assortments prior to the ban taking place.

The analysis suggests the risk is greatest for brands that treat social media as both storefront and demand signal testing, scaling and killing products based on rapid online engagement. If that engagement is reduced in a key age cohort, the model that depends on frequent drops and fast inventory churn could become harder to manage, increasing the chance of misreads and markdown dependency.

Not all retailers face the same level of exposure. Companies that reach younger shoppers through physical retail, household purchasing dynamics, or proprietary digital ecosystems may be better insulated from the disruption created by the UK under-16 social media ban. “Primark, for instance, drives footfall through its in-store experience and low-priced product ranges rather than paid or organic social media promotion, and Next reaches young shoppers through family connections as well as its app and loyalty ecosystem. Both carry lower exposure to this disruption than pure social-media-driven competitors,” Iles said.

The proposed ban also lands at a moment when fashion retailers are already dealing with a difficult operating backdrop. Iles noted the policy would stack on top of weakening consumer confidence driven by cost-of-living pressures, higher production expenses, and margin strain linked to elevated energy and oil prices amid conflict in the Middle East. Added tariffs and a more uncertain global trade environment are further tightening the space for error, particularly for businesses that compete primarily on price.

The implications may stretch beyond clothing. Because social platforms also shape purchasing in other trend-sensitive categories, the restriction could influence demand patterns in teen-focused segments such as health and beauty, where viral products and rapid trend turnover have become central to how brands generate momentum.

For fast-fashion operators, the next year becomes a planning window: diversifying acquisition channels, adjusting product cadence, and building alternative routes to younger consumers before spring 2027 reshapes the digital terrain.

The divergence points to shoppers becoming more deliberate about what they buy in categories viewed as non-essential, with fashion among the most exposed. While other discretionary segments also cooled, the declines were smaller than in apparel. Shipments in cosmetics, food and drink, toys and gifting slipped by between 5% and 8%, according to the data.

By contrast, categories linked to the home and everyday lifestyle showed strong gains, suggesting spending is being redirected rather than disappearing. Homewares shipments rose 23%, while tool and DIY deliveries increased 19%. Pet and animal products grew 17%, and sports equipment shipments were up 14%, reinforcing a picture of consumers prioritising home improvement, wellbeing and practical purchases as summer approaches.

At the same time, Scurri’s findings highlight a second shift: shoppers may be buying less fashion, but they are raising the bar for delivery. Next-day delivery usage rose 29% compared with the same period last year, making it an increasingly dominant choice at checkout. Standard delivery lost ground, with the proportion of customers selecting it falling by 2.7%. Signature-required services also gained momentum, increasing by nearly 13%.

Scurri chief marketing officer Gavin Murphy said the combination of tighter purchasing and higher delivery expectations reflects a more nuanced consumer mindset. “These figures point to an interesting shift in consumer behaviour. Consumers remain cost-conscious and are carefully considering their purchases. However, once they’ve decided to buy, they increasingly want the confidence that comes from a fast, convenient and reliable delivery experience.”

Scurri said next-day delivery now represents more than 31% of preferred shipping selections, making it the leading premium option. Signature services account for a further 23%, indicating that speed and reassurance are becoming part of the perceived value of an online purchase.

The data suggests that, even under ongoing economic pressure, consumers are less inclined to compromise on fulfilment quality. Retailers that assume shoppers will always trade down to the cheapest shipping option may be misreading the moment, Murphy argued. “Retailers often assume that economic pressure means shoppers will always choose the cheapest delivery option available. Our data suggests the opposite. Delivery has become part of the product experience. Consumers may be buying fewer items, but they are increasingly willing to invest in services that help them receive those purchases more quickly and with greater confidence.”

Scurri also recorded a sharper drop in international parcel flows than in domestic shipments. Overseas deliveries from the UK fell by almost 26% year on year, suggesting consumers are approaching cross-border purchasing with more caution, potentially influenced by higher delivery charges and fulfilment complexity.

With fashion shipments fell 22% while home and lifestyle categories advanced, Scurri’s snapshot suggests UK ecommerce is not slowing so much as shifting. The message for retailers, Murphy said, is that delivery is increasingly tied to loyalty and repeat purchasing. “As competition intensifies, retailers need to recognise that delivery is no longer simply an operational function. It’s a customer experience channel and a loyalty driver. The retailers that give consumers the right balance of speed, convenience and flexibility will be best placed to win repeat business,” he concluded.

The Ecoini Clothing and Leather Council has highlighted a critical reliance on foreign nationals within the sector, reporting that over 80% of machinists are foreign workers. This reliance underscores a long-standing challenge for factories, which have consistently struggled to recruit a sufficient number of skilled local workers to fill these essential roles. The potential sudden departure of these foreign workers, driven by stricter immigration enforcement, could precipitate a severe labor shortage, directly impacting production capacity.

Industry stakeholders express deep concern that such a rapid exodus would inevitably lead to reduced output, factory closures, and significant job losses across the Durban clothing industry. The ripple effect of these closures would not only devastate the livelihoods of many but also inflict substantial damage on the broader local economy. The concerns revolve around maintaining stability for Durban clothing industry jobs and the entire textile industry.

In response, the KwaZulu-Natal government has maintained its firm stance, emphasizing that all businesses operating within the province must adhere strictly to existing immigration and labor laws. The government reiterated that the employment of undocumented foreign nationals is illegal and compliance is non-negotiable.

This critical situation has ignited a pertinent debate: whether South Africa should proceed with immediate, rigorous immigration enforcement or implement a phased transition plan designed to safeguard both existing Durban clothing businesses and the numerous job losses that loom. The outcome of this discussion will profoundly shape the future of the region’s manufacturing sector and the stability of its textile industry. The council insists that a balanced approach is necessary to navigate the complexities of immigration enforcement without sacrificing essential foreign workers and ultimately impacting the sustainability of Durban clothing industry jobs.

The strategic move by Frasers Group involves the appointment of Barrenjoey Markets Pty Limited to act as a broker, facilitating the acquisition of all Accent shares. The offer stands at a closing price of A$0.65 per share, with the acquisition window set to close before July 30th. This proposed acquisition follows a notable decline in Accent Group’s share value, which saw its price drop from A$1.67 in August of last year.

Criticisms and Shareholder Concerns Highlighted

Christopher Wootton, who serves as Frasers’ director on the Accent board, has reportedly expressed significant concerns regarding Accent’s leadership. His criticisms were directed at Chairman Lawrence Myers and the management team, citing a substantial 40.5% decline in net profit after tax during the first half of FY26, among other negative financial indicators.

Further compounding the challenges faced by Accent Group, 82% of its shareholders voted against the company’s recent remuneration report. Australian media outlets have also reported an ongoing insider-trading investigation involving Accent’s chief executive, Daniel Agostinelli. In response to the takeover intent from Frasers Group, Accent Group’s board has advised its shareholders to refrain from taking any action at this time.

This Frasers Group Accent takeover bid underscores the strategic expansion efforts of Frasers Group. This development follows another significant move last week when Frasers Group presented a £1.7 billion proposal to acquire Hugo Boss, demonstrating its assertive posture in the global retail acquisition landscape. The Frasers Group Accent Takeover is a clear signal of the company’s intent to consolidate its market position. The hostile takeover bid for this established footwear apparel business in Australia represents a key focus for Frasers Group as it seeks to expand its international footprint and bolster its retail acquisition portfolio.

Evolution of US Tariff Measures on Vietnamese Textiles

In August 2025, the US began imposing a 20% tariff on a broad range of fashion and textile goods imported from Vietnam. This measure followed an earlier proposal in April 2025 for a 46% reciprocal tariff, which was subsequently adjusted. This 20% rate, while lower than the initial proposal, remains higher than those faced by competitors like Indonesia (19%), Cambodia (19%), and Turkey (15%).

Further legal developments reshaped the situation in February 2026. A US Supreme Court ruling temporarily blocked the use of “reciprocal duties” under the International Emergency Economic Powers Act, which had been the legal basis for additional duties previously. Shortly after this ruling, the White House announced a temporary import duty of 10% on a wide array of products, including Vietnamese textiles, effective February 24 for a 150-day period under Section 122 of the Trade Act of 1974. This temporary shift offered some short-term relief, with analysts estimating an average tariff rate of 18-20% for Vietnamese goods, down from a previous 23-25%. However, it also ushered in a new phase of strategic adjustment and continued uncertainty regarding trade policy.

Industry Impact and Economic Pressures

The immediate consequences of these US tariffs have been noticeable. From August to September 2025, Vietnamese footwear exports to the US declined by 27%, while fashion and textile exports saw a 20% drop, underscoring the industry’s sensitivity to tariff hikes. Major American brands with substantial production in Vietnam, such as Nike, faced increased costs that were absorbed across the supply chain, often resulting in squeezed margins for Vietnamese manufacturers or higher retail prices for US consumers.

Data from May 2026 revealed that garment and textiles exports reached approximately $3.19 billion, a 3.5% increase year-on-year. Cumulative export value for the first five months of 2026 exceeded $15.13 billion, marking a modest 0.4% increase compared to the previous year. Despite these figures, the sector grapples with higher production costs, which can be 40-45% steeper in Vietnam compared to regional competitors like Indonesia, Malaysia, and Myanmar, even with more productive labor. Elevated freight rates and rising selling expenses further contribute to thinner profit margins for businesses. Companies like TNG Investment and Trading JSC reported a fall in gross profit margin from 15.2% to 12.1% due to these pressures.

The industry’s reliance on imported raw materials, with 100% of its cotton and up to 95% of synthetic fibers sourced internationally, adds another layer of complexity, particularly concerning US rules of origin requirements. Goods with inputs from countries like China face the risk of being classified as “transshipped,” potentially incurring even higher tariffs of up to 40%, further threatening the sector’s stability within global supply chains.

Strategic Responses and Future Outlook

In response to these challenges, Vietnamese textiles companies and government bodies are implementing various strategies to mitigate the impact of the Vietnam Textile Tariffs Impact. The Vietnam Textile and Apparel Association (VITAS) projected 2025 export turnover to reach $46 billion, a 5.6% increase from 2024, despite the tariff pressures. This resilience is attributed to initiatives such as market diversification, a move towards digitalization and automation, adoption of green production practices, and supply chain integration.

Analysts like Nguyen Thi Trang from KB Vietnam Securities suggest that the negative impact on the industry might not be overly severe for some firms. A mechanism for the sector allows a certain volume of garments and textiles exports to qualify for preferential tariff rates based on the proportion of cotton and yarn imported from the United States. Vietnam was a significant importer of US cotton in the 2024-2025 marketing year, which could provide a basis for preferential tariff quotas if approved.

The Vietnamese government has also called for immediate support for affected firms, urging agencies to implement measures that help businesses adapt, maintain jobs, and safeguard long-term competitiveness. Discussions are ongoing to negotiate more favorable conditions through the new US-Vietnam trade agreement framework. Companies are actively adjusting production paces, pricing strategies, and expanding into new markets to stabilize orders and protect labor incomes from fluctuations.

While the immediate future for Vietnamese textiles remains intricately tied to evolving trade policy and the persistent nature of US tariffs, the industry’s historical adaptability and strategic pivot towards diversification and sustainable practices offer a pathway to sustained growth despite the current export challenges and complexities of global supply chains.

Lululemon’s participation in this fund underscores its commitment to fostering a more sustainable apparel industry. The fund, managed by Schroders Capital’s Infrastructure team, focuses on late-stage wind and solar energy projects throughout China. This initiative is expected to enable Lululemon to achieve the equivalent of 100% renewable electricity for its extensive supplier network in Mainland China, based on projected electricity consumption by 2030. Several wind projects, with capital already deployed from the fund, are currently under construction and anticipated for completion later this year.

Driving Impact Agenda 2030 and Climate Targets

This renewable energy investment forms a cornerstone of Lululemon’s broader Impact Agenda 2030. A key component of this agenda is a science-based target to reduce Scope 3 greenhouse gas emissions intensity by 60% by 2030, using a 2018 baseline. Given that the majority of Lululemon’s emissions originate within its supply chain, increasing the adoption of renewable energy among its manufacturing partners is fundamental to reaching these critical climate targets. The company’s goal also aligns with a commitment to achieve net-zero emissions across its full value chain by 2050.

Noel Kinder, Senior Vice President of Sustainability at Lululemon, emphasized the strategic importance of this approach. He stated, “Decarbonizing global supply chains requires new approaches to capital deployment and collaboration.” Kinder further noted that the fund establishes a scalable model for expanding access to renewable energy in manufacturing regions while simultaneously reducing complexity for suppliers. This proactive stance not only strengthens Lululemon’s commitment to supply chain decarbonization but also positions it as a leader in sustainable apparel.

Collaborative Efforts for Broader Change

The investment complements Lululemon’s ongoing sustainability initiatives, which include strategic partnerships with leading industry organizations. These collaborations involve the Apparel Impact Institute, the Asia Clean Energy Coalition, and CEBA’s Clean Energy Procurement Academy. These alliances reflect Lululemon’s dedication to collective action, supporting solutions that extend beyond its own operations to accelerate industry-wide progress towards greener practices. The move has been positively received, with environmental groups like Stand.earth applauding it as a “significant step” beyond previous commitments. Analysts also highlight this as a “replicable model” for other brands seeking to enhance their supply chain decarbonization efforts in the global fashion industry.