Jewellery is emerging as the biggest winner in global fashion’s uncertain future, outperforming every other category even as the broader industry prepares for what executives describe as an increasingly “challenging” year shaped by tariffs, artificial intelligence and cautious consumers.
According to The State of Fashion 2026 report by McKinsey & Company and The Business of Fashion, “Jewellery has also thrived as fashion brands hiked prices faster,” with “strong volume demand in jewellery” expected “through 2028.”
The report says jewellery is forecast to become “the fastest-growing category in fashion by unit sales,” with both costume and fine jewellery expected to grow “between 5.3 and 5.6 percent per year through 2028.”
“Having defied the broader luxury slowdown, the category will keep reaping the rewards of a growing customer base with a desire for long-lasting investments, self-expression and treating themselves,” the report states.
The findings come at a time when the global fashion industry is entering what the report calls a “fundamentally new reality,” driven by US tariffs, economic uncertainty and changing consumer behaviour.
“Forty-six percent of executives expect industry conditions to worsen in 2026,” the report notes, marking “an increase of 8 percentage points over 2025.” At the same time, “76 percent say tariffs will be the biggest issue defining 2026.”
Against this bleak backdrop, jewellery has emerged as a rare bright spot.
“With unit sales growth outpacing all other fashion categories, jewellery’s bright moment is set to continue into 2026,” the report says.
The report attributes the category’s growth to changing consumer priorities. Buyers are increasingly looking for “lasting investments and self-expression alongside a rise in self-gifting among both men and women.”
The shift reflects a broader transformation in spending habits. The report says consumers are “seeking value and devoting more of their budgets to other goals, including their own health and wellbeing.”
Luxury fashion, by contrast, is struggling after years of aggressive price hikes.
“While luxury players raised prices without corresponding improvements in product quality or creativity, design-led brands in the mid-market elevated their products and store experiences,” the report says.
As a result, “the mid-market is the fastest-growing segment, replacing luxury as fashion’s main value creator.”
The report also warns that “high prices remain a significant hurdle for aspirational customers,” adding that “more and more would-be luxury shoppers are focusing on their personal wellness: body, mind and health.”
The authors say the luxury industry is now entering “a phase of strategic renewal.”
“The luxury slowdown is prompting a phase of strategic renewal. Brands are reducing their reliance on price-led growth and refocusing on creativity and craftsmanship to rebuild client trust,” the report states.
Alongside jewellery, smart eyewear is also emerging as a major growth category.
“Smart eyewear that blends fashion and technology has become the fastest-growing accessory category,” the report says, adding that “the category projected to exceed $30 billion by 2030.”
The report identifies artificial intelligence as another defining force reshaping fashion.
“Executives cite artificial intelligence as the biggest opportunity for the industry,” surpassing priorities such as sustainability and product differentiation.
AI is no longer optional, the report argues.
“With turbulent conditions including volatile input costs, supply chain disruptions and slow growth straining fashion’s economic model, AI is shifting from a competitive edge to a business necessity.”
The report also predicts a dramatic transformation in shopping behaviour.
“Customers are turning to large language models to search for products, compare offerings and receive tailored recommendations,” it says, warning brands that “fashion brands’ presence in AI chatbot responses” could become “the new SEO.”
Despite mounting pressures, some executives still see opportunity.
“Twenty-five percent believe industry conditions will improve, up from 20 percent in 2025,” the report notes.
Still, the overarching mood remains cautious.
“‘Challenging’ has overtaken ‘uncertainty’ as the word executives polled in the annual BoF-McKinsey State of Fashion Executive Survey used most frequently to describe the industry in 2026,” the report says.
In the end, the authors argue that only the most adaptable brands will survive.
“In a flat market, only those companies that capture the hearts and minds of customers will manage to grow and gain market share,” the report concludes.
