Tariffs’ impact on fashion is finally here. Apparel prices in the US increased for the first time since March last month, up 0.4 per cent according to the latest consumer pricing index (CPI) from the US Bureau of Labor Statistics.
Vogue Business has been tracking the prices of core handbags, pairs of sunglasses, wool coats, sneakers and white T-shirts across the US e-commerce sites of the top 20 brands in the Vogue Business Index since 17 April. Handbags saw the most price increases over the three months: up 5 per cent for a Louis Vuitton Neverfull; 4 per cent more for a Gucci monogram tote; a 0.6 per cent increase for a Hermès Kelly pouch; 12 per cent more for a Burberry tote; a 2 per cent increase for a Balenciaga City bag; a 2 per cent increase for a Miu Miu Aventure bag; 8 per cent more for a Bottega Hop bag; and a 4 per cent increase for a Celine raffia bag.
T-shirt prices increased at Gucci, Hermès, Burberry, Fendi and Celine, while prices of sunglasses inched up at Louis Vuitton, Gucci, Balenciaga, Loewe, Versace, Bottega Veneta and Celine. Prices of sneakers and wool coats were the most stable products across the brands tracked.
Inflation is also creeping up on the US consumer, with a rise of 2.7 per cent year-on-year in June per the US Bureau of Labor Statistics, the highest rate since February, as goods impacted by tariffs have now reached shop floors. “Inflation remains top of mind for everyone, especially with the high tariffs imposed on all our key supplier countries. The new CPI data shows these costs are already moving through supply chains, contributing to price increases across the economy,” says Steve Lamar, CEO and president of the American Apparel and Footwear Association. “As we enter the second half of the year and the rush-shipping safety net begins to unravel going into the critical back-to-school and holiday shopping seasons, it’s clear these tariff costs will increasingly be passed on to consumers.”
Brands are keeping pricing under close review, says Neil Saunders, managing director and retail analyst at GlobalData. “Brands have been trying to mitigate price increases by cutting costs, changing supply chains, and other factors. However, they are also having to increase prices modestly to cover tariffs,” he says. “The worrying thing is that the full effect of tariffs was not felt in the first half of the year, but they will be more impactful in the second half, so we will likely see more price increases.”
As we head into the second half of 2025, ahead of luxury’s Q2 financial results, executives are keenly watching the impact of tariffs on the US consumer’s spending power, which is having an impact across markets. Already, analysts note that there are fewer US tourists in Europe because of the weaker dollar. Last week, the Trump administration confirmed that tariffs would now be enacted on 1 August at either the reciprocal rates proposed in April (which include a 10 per cent blanket tariff on all imports and additional tariffs for certain countries) or updated rates proposed this week, which includes the threat of a 30 per cent tariff on goods from Europe. That’s unless countries can reach negotiations with Trump; this week, Indonesia and the US agreed on a trade deal to set tariffs on shoe imports at 19 per cent.
Brands should expect US consumer spending to shrink as inflation impacts purchases beyond apparel, and even wealthy shoppers pull back thanks to market uncertainty. “Price increases will reduce volumes,” says Saunders. “The US consumer is already financially stretched, and further price increases will make them more cautious. This will polarise performance in the apparel sector, and some players will lose out.”
Brands navigating the tariff landscape have warned customers about price increases over the past couple of months, with some offering promotional sales before they increased prices to drive up demand. Some brands based outside the US, like British activewear brand Tala, temporarily paused their sales to the US due to changes in import charges. “Changes to tariff laws mean we would have to sell these products to you at a very high price, and that the delivery time to you would be very slow,” the brand said in a statement on its website aimed at its US customers.
For luxury brands, which tend to have more pricing power, a 2 to 3 per cent change in price isn’t unheard of, so the customer may be slightly more resilient in the face of price increases. HSBC wrote in a note on Monday in response to the proposed 30 per cent tariffs on the EU that luxury goods could increase between 4.5 and 9 per cent. “We don’t think it will take much for luxury companies to offset these proposed tariffs,” analysts wrote.
Nevertheless, brands would do well to approach price increases in a discerning manner, learning from the impacts of “greedflation” (excessive price increases), which played a significant role in the slowdown of the luxury market in 2024. “The real issue is a combination of limited American purchasing power; the erosion of the product value proposition (most soft luxury companies have already priced up too much while product creativity has lagged); and the sequential deterioration of consumer sentiment in the US and possibly elsewhere,” according to HSBC.
“The best way is to add value in other ways,” says Saunders. “Maybe new designs, more embellishments on products, and so forth. That way, the consumer sees they are getting something for the extra money.”
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