FROM THE FEBRUARY ISSUE: FASHION LAW – WHAT TO EXPECT IN 2025

by Douglas Hand



The entire MR team proudly presents our February 2025 issue. If you haven’t received a hard copy, please page through our digital version, and we’ll continue to post individual stories here on  MR-mag.com. If you haven’t been getting MR in print, be sure that you are on our mailing list for future issues by completing  thisform. 

This past year was an interesting one at the intersection of the fashion industry and the law, and 2025 has the potential to bring even more significant changes. Let’s take a look at some of them and how they may impact your business.

Tariffs and Reshoring

The Trump administration has promised significant tariff increases for many of the countries from which apparel manufacturing is currently sourced. Increases of up to 60-100% are being proposed for imported goods from China, and trade policy may involve a universal tariff applied to other countries of 10-20%, with even potentially larger increases close to home. To wit, notwithstanding the United States-Mexico-Canada Agreement (which is supposed to allow for duty-free imports between the countries), Trump announced a plan to impose 25% tariffs on all goods from Canada and Mexico to take effect on January 20, 2025.

Amidst this unpredictable trade landscape, companies will need to reassess sourcing and manufacturing partners and strategies by looking within our own borders. Beyond the cost savings of reshoring production (i.e., no tariffs), certain proposed US regulations (detailed below) centered on supply chain transparency also support reshoring as it is far easier for companies to perform diligence on local factories and comply with proposed regulations.

Moreover, contractual obligations with wholesale accounts relating to pricing will be an important element for companies to consider. In the potentially fluctuating tariff environment of 2025, before finalizing mid to long-term agreements for delivering goods at a certain price, it will be wise for companies to try to build in pricing flexibility based on tariff increases.

Anti-Trust Concerns

Fashion brands have traditionally relied on M&A to drive growth. While European brand aggregators LVMH, Kering, and Richemont have expanded into luxury conglomerates here in the United States, the US Federal Trade Commission (FTC) has recently taken an active role in thwarting such consolidation. Case in point, last year’s announced merger between Tapestry and Capri Holdings was blocked by the FTC, which arguedthat the combined company would have a dominant share of the “accessible luxury” handbag market.

Other recent anti-trust actions involving the fashion industry include Shein–Temu, a class action involving Hermes sales practices, and the FTC’s suit against Amazon related to pricing practices. The notable increase in FTC activity in the fashion industry demonstrates the agency’s willingness to target transactions even if they involve niche markets or “discretionary” products.

This adds a layer of complexity to potential fashion M&A trans-actions. In many cases, the parties to a potential deal will have to build in the increased costs, lengthening of the closing period, and lack of certainty an FTC review layers onto a transaction.

New Domestic Regulations

US regulation of the fashion industry may soon be a reality to address the industry’s historic negative impact on the environment and global labor. Proposed regulations like the New York Fashion Sustainability and Social Accountability Act would require any fashion company selling in New York with global revenues of $100 million or more to provide a comprehensive report on their energy, greenhouse gas emissions, water, plastic, and chemical management to the Attorney General. Such companies are also required to conduct mandatory due diligence to prevent labor abuses.

If adopted, companies that fail to follow these regulations could face fines of up to $15,000 per day, with the proceeds going to environmental justice organizations. Other pending regulations in other states and Federally are also potentially up for passage in2025, making it a year to pay particular attention to fashion law.

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