European Fashion Trade Stands Out as the Industry’s Most Struggling Segment

European retail has overtaken industry and real estate as the most troubled segment of the fashion business, according to a new report by U.S. law firm Weil, Gotshal & Manges. The firm attributes the sector’s decline to weakening consumer demand across key markets, placing fashion trade at the top of its annual restructuring watchlist.

Of the total of ten sectors, in fact, seven have recorded a worsening of conditions compared to the previous quarter.

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26 jun 2025 - 15:07

Retail, between a rock and a hard place. European retail has positioned itself as the sector facing the most difficulties, with a level of crisis that has not been recorded since 2009, according to the latest report by the U.S. law firm Weil, Gotshal & Manges. The company, which carries out a ranking of the difficulties (or distress) of the different economic sectors, has highlighted the rise of trade to the first position, even ahead of the industrial sector and the real state.

This development was mainly due to cost inflation and the fall in consumption on the Old Continent, especially in the discretionary goods sector. “The uncertainty surrounding tariffs has also impacted supply chains and negatively affected retailers’ exports to the United States,“ the firm adds.

The index, named the Weil European Distress Index, analyzes various parameters such as liquidity, profitability or the valuation of more than 3,750 listed European companies. This increase in trading difficulties accompanies, in fact, a worsening of the general business situation. According to the report, the level of distress or stress in the European landscape has risen to 4.1 in the last quarter, compared to 3.8 at the end of February.

European commerce has overtaken the industrial and real state sector in the ranking

Of the ten sectors, in fact, seven have recorded a worsening of conditions compared to the previous quarter. With the rise in trade, the industrial sector has moved into second place, particularly affected by inflation and poor access to financing. Third place goes to the real estate sector.

By country, the index has placed Germany as the market with the highest level of difficulties, which are close to those recorded in May 2020, at the height of the pandemic. On the other hand, the firm highlighted Spain and Italy as the only markets where these difficulties remain at a moderate level.

“Macroeconomic conditions in Europe remain challenging,“ the firm explains; “growth for the Eurozone as a whole has slowed markedly, with an expected rise of 0.8% by 2025, compared to the 1% previously expected.