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      "text": "With 60 percent of brands behind on sustainability targets, reducing over-production and cutting waste through cost-effective initiatives may place brands in the best position to achieve targets and maintain the bottom line.",
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      "text": "Recent sustainability regulations are adding pressure. While over-stocking has been the preferred option to maximise sales, there are further sustainability considerations that may impact this strategy in 2025, including regulation and self-imposed emissions targets. In July 2024, the EU approved the Ecodesign for Sustainable Products Regulation, which will require fashion companies in the EU to report on unsold textiles starting in 2025 and will make it illegal to destroy unsold products in early 2026. Similarly, in August 2024, California became the first US state to approve the Extended Producer Responsibility programme for textiles, requiring apparel players to submit a plan for collection, repair and recycling of goods by July 2030. With 60 percent of brands behind on sustainability targets, reducing over-production and cutting waste through cost-effective initiatives may place brands in the best position to achieve targets and maintain the bottom line.",
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      "text": "A focus on profitability is pushing brands to optimise inventories. In 2025, brands will increasingly prioritise profitability amid flat sales volumes and increased markdowns. Given the strong correlation between inventory turnover and profitability, tightly managing inventory will be one lever they can pull. Meanwhile, higher warehousing costs created by limited capacity and high interest rates are also pushing brands to shift unsold inventory: warehousing costs increased 10 percent in 2023 compared to the year prior.",
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      "text": "Note: Includes select value, mid-market and affordable luxury brands. Source: S&P CapIQ data, McKinsey analysis",
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