What will the next chapter of the fashion system look like? In a market that’s been reshaped by the coronavirus pandemic, brands need to evolve their business models to adapt to the demands of a rapidly changing world. For the industry leaders and change-makers who gathered Thursday at VOICES, virtual fashion, sustainability, animal fur and inclusivity were all top of mind.

The State of Fashion 2022

Despite sporadic retail shutdowns and persistent travel restrictions due to the pandemic, 2021 saw the global fashion industry get back on its feet. Fashion sales are expected to reach 96 to 101 percent of 2019′s pre-coronavirus levels in 2021, according to the State of Fashion report released Thursday by The Business of Fashion and McKinsey.

The recovery has gone faster than predicted in last year’s report, which forecast fashion sales returning to 2019 levels only by the end of next year or even 2023. Now, McKinsey forecasts 3 to 8 percent growth over pre-pandemic levels in 2022.

It’s too soon to change those assumptions based on the emergence of the Omicron variant, McKinsey senior partner Achim Berg said. “We don’t know how it’s going to play out. The fashion industry has recovered faster than we expected, showing that things often don’t turn out as badly as they seem at first glance.”

Still, the rebound has masked diverging performance. Brands who were well-positioned to capture 2021′s rebound, due to expertise in e-commerce or a focus in winning categories, forged ahead, while others fell behind. A record 69 percent of fashion companies generated a negative economic profit this year.

Balenciaga Chief ‘Redefining Luxury’

It’s been a banner year for Balenciaga, which has roared out of the pandemic, reactivating its legacy in haute couture while forging ahead in digital fashion with a fashion video game of its own and a partnership with the gaming platform Fortnite.

“I often say we redefined luxury,” Cedric Charbit, the brand’s chief executive, said. “We became a platform where anything is possible.” Varied activations, from a special episode of The Simpsons to a couture exhibition at the Tank Museum in Shanghai demonstrate the “elasticity” of the brand, a key to its success, said Charbit.

Looking ahead, Charbit said he sees the metaverse as vital to the future of marketing and commerce as today’s consumers become more “active participants” in the brands they follow, announcing the formation of a new dedicated business unit. “Right now the climax of interaction with a luxury brand is that you click like, or comment or buy something,” he said. “I think we can get to a next level.”

Can Fashion Become Circular?

The fashion economy is decidedly linear: fibers are grown, harvested, spun into fabric and stitched into garments, which are then pushed out and sold, worn and discarded. “The way we make and use things accounts for 45 percent of greenhouse gasses and 90 percent of biodiversity loss,” said Dame Ellen Maccarthur, the record-breaking sailor and environmentalist, rallying the fashion industry to play its part to scale up non-linear alternatives.

She laid out a vision for an alternate “circular” economy where the life-cycle of garments is extended through better design, including more resilient, recyclable materials, and through systems at each stage of the value chain to facilitate items’ repair, reuse, and eventual transformation into something new.

That change would require a collective push by suppliers, designers, brands and retailers. “We need to work together to make this happen. You need the entire value chain in the room,” MacArthur said. That challenge is also an opportunity: circular business models including resale and rental are on track to become a $700 billion market representing 23 percent of the fashion industry by 2030, she said.

Elle Magazine Goes Fur-Free

Brands including Gucci, Chanel, Burberry, Valentino and Versace have all gone fur-free in recent years, with the entire Kering group following suite this fall. Fashion magazines have a role to play, too, as the imagery they produce helps to drive demand for the controversial material.

At VOICES, Valéria Bessolo Llopiz, senior vice president at Elle and Elle Deco, announced that the magazines would no longer print images of animal fur, with the policy applying to both advertisements and editorials. “Animal fur is no longer aligned with our values,” she said.

But PJ Smith, the Humane Society of the United States’ director of fashion policy, said that brands needed to look beyond eliminating fur alone if they want to tap into rising demand from consumers for fashion that is cruelty-free.

Major investments in materials innovation suggest that brands could move to replace exotic skins and eventually leather itself. “Alternatives are just getting better and better,” Smith said.

Tommy Hilfiger Foregrounds Inclusivity

Tommy Hilfiger, American designer and founder of the PVH-owned brand that bears his name, joined three of his recent collaborators on stage to talk about what makes cross-cultural fashion partnerships authentic.

In the 1980s and ‘90s, Hilfiger was at the forefront of brands engaging with the rap and hip-hop artists driving tastes in the emerging streetwear scene. He recalled pushing retailers to adopt the oversized cuts and big logos that helped shape the look of the era.

More recently, he’s turned his focus to “adaptive” fashion, working with models including Jillian Mercado to produced clothes that better suit the needs of differently-abled people. He has also collaborated with “Pose” star Indya Moore on a gender-fluid clothing line, and has regularly worked with Halima Aden, the barrier-breaking high-fashion model who wears a hijab. Mercado, Moore and Aden all joined Hilfiger on stage.

“It makes me upset seeing large companies not opening doors for the world,” said Hilfiger. There is a practical dimension to inclusivity, too. “The more people who can see themselves in your clothes, the more interest you’re going to get,” said Moore.

VOICES 2021 is made possible in part through our partners McKinsey & Company, Shopify, Clearco, Klarna, Brandlive, Flannels, Snap, Getty Images, Soho House and The Invisible Collection.