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Richa Agarwal

Richa Agarwal is a seasoned digital transformation leader and C-Suite advisor with extensive experience partnering with iconic global brands like PVH, PepsiCo, Nike, Ralph Lauren, and H&M to bridge emerging technology, particularly AI, DPC, and data analytics, with operational efficiency and sustainable business practices. Throughout her dynamic career spanning corporate leadership, consulting, entrepreneurship, and academia, she has led complex digital initiatives like PLM implementations and scaling Digital Design, consistently delivering measurable improvements such as cutting product timelines by 10 weeks and boosting forecast accuracy. An award-winning digital innovator and a recognized sustainability thought leader with OECD/UN speaking engagements, Richa excels at driving organizational change and is focused on leveraging her deep industry knowledge in AI-driven transformation to shape strategy and build a more connected and sustainable future.

Editors' PickPeople & LeadershipSustainability

Part 3 – From Trade Shock to Strategic Shift: The New Fashion Mandate

by Richa Agarwal
written by Richa Agarwal

Editor’s Note: This article is the final instalment in a three-part series by Richa Agarwal examining how the 2025 tariff environment and broader economic disruption are reshaping the global fashion industry. In Part 1, Richa unpacked the macro forces destabilizing the industry, and in Part 2, she explored the strategic responses now underway.

Catch-up: Part 1 and Part 2

Today, Part 3 brings it all together – outlining the actionable imperatives and leadership mandates that will define antifragile fashion in the years ahead.

Actionable Imperatives: Forging Antifragility in the New Fashion Economy

To not merely survive but to actively thrive in this turbulent new epoch, fashion leaders must adopt a proactive and transformative stance. The goal transcends mere resilience and the ability to bounce back; it is to cultivate antifragility – the capacity for the organization to emerge stronger and more capable from shocks and disruptions. Key imperatives include:

1️⃣ Architect Hyper-Agile Value Networks

Prioritize flexibility, strategic redundancy, and multi-sourcing intelligence over an outdated singular focus on the lowest possible cost. Foster truly collaborative ecosystems built on transparency and shared data with trusted partners.

2️⃣ Invest in an AI-Powered Predictive and Prescriptive Intelligence Core

Implement and leverage advanced analytics and AI as the “nervous system” of the enterprise. This means moving beyond descriptive analytics to predictive foresight (anticipating demand, risks, and opportunities) and prescriptive guidance (recommending optimal actions).

3️⃣ Cultivate Deep, Strategic, and Transparent Global Partnerships

Shift from purely transactional supplier relationships to building long-term, collaborative partnerships grounded in capability, proven compliance, shared risk-reward models, and mutual trust across a strategically diversified and rigorously vetted global footprint.

4️⃣ Embed Sustainability as Core to Resilience and Brand Value

Integrate sustainable practices, resource efficiency, and transparent data verification (e.g., AI-driven PCF calculations) into fundamental business strategy. This is increasingly critical for mitigating regulatory risks (e.g., EU Green Claims Directive), managing resource volatility, meeting evolving consumer and investor expectations, and building enduring brand trust.

5️⃣Continuously Invest in Talent Evolution and Capabilities Development

Recognize that human capital is the ultimate differentiator. Aggressively invest in upskilling and reskilling teams in critical future-focused competencies: data science, AI applications, geopolitical analysis, agile methodologies, and complex global network management.

The Unavoidable Mandate for Transformative Leadership in a Reshaped World

The confluence of extreme tariff volatility, fundamental realignments in international trade mechanisms such as the de minimis rule, and significant new macroeconomic pressures including the U.S. credit rating downgrade, presents the global fashion industry with its most complex and defining challenge in generations. Yet, it is precisely these severe and multifaceted pressures that forge an undeniable and urgent mandate for transformative leadership and profound structural change.

This is not a cycle from which we will simply revert to a previous “normal“. Instead, this period of intense disruption is a crucible, shaping a new, more resilient, more intelligent, and ultimately more responsible future for the fashion industry. The organizations that courageously embrace this environment as a catalyst for deep-seated strategic and operational change – investing decisively in agility, embedding advanced intelligence throughout their value networks, fostering robust global partnerships, and cultivating future-ready talent – will not only navigate this storm but will emerge to define the next era of fashion.

The future of fashion will be determined not by those who wait for the storms to pass, but by those who learn to lead through them, transforming today’s chaos into tomorrow’s competitive advantage.

Editor’s Note: A huge thank you to Richa Agarwal for sharing her insight, clarity, and strategic vision across this three-part series. Her ability to connect macroeconomic disruption with practical transformation levers has offered a timely roadmap for navigating uncertainty, and reshaping the fashion industry with purpose.

If you’d like to continue the conversation, explore collaboration opportunities, or dive deeper into any of the themes discussed, feel free to reach out to Richa directly here. 

Sources

LinkedIn, Agarwal, Richa. Beyond the Label: How AI & Accurate Data Can Save Fashion from Greenwashing
EY, How Strong Storytelling Can Help Prioritize the Sustainability Agenda, 2024
EY Four Futures, An Immersive Experience of Fashion’s Future
Business of Fashion & Zalando, The Future of E-Commerce, Powered by Generative AI, Apr. 2025
My Total Retail, How AI Helps Retailers Balance Creativity and Optimization
ICG, Trade War Views: Implications for the Economic Outlook and Business Operating Environment
WTO, World Trade Report 2024
Reuters Institute, Generative AI and News Audiences
EY, Top 10 Geopolitical Risks in 2025

For a full list of citations and further resources provided by the author, please contact us or reach out to Richa directly.

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AIDPCPeople & LeadershipTechnology

Part 2 – From Trade Shock to Strategic Shift: Rebuilding the Fashion System from the Ground Up

by Richa Agarwal
written by Richa Agarwal

Editor’s Note: This article is the second in a three-part series by Richa Agarwal examining how the 2025 tariff environment and broader economic disruption are reshaping the global fashion industry. In Part 1, Richa explored the macro forces at play – from trade policy upheaval and consumer fragility to the unraveling of outdated operating models.

Missed Part 1? Catch up here.

Here in Part 2, Richa turns to the strategic responses underway: how fashion leaders are recalibrating sourcing, rethinking merchandise planning, investing in intelligent technologies, and redefining leadership for a more volatile world.

The Forced Evolution: Adapting to Uncharted Territory

This period of intense pressure is compelling a critical re-evaluation of established norms, forcing strategic shifts across the value chain.

1️⃣ Sourcing Recalibrated: The High-Stakes Game of Global Diversification

The “China Plus Many” strategy has shifted from long-term goal to urgent necessity. A temporary U.S.–China tariff truce (reducing some rates to ~30% for 90 days) offers a brief pause, but the broader landscape remains volatile – with a baseline 10% U.S. tariff on most imports and the risk of new “reciprocal” tariffs on others.

Nearshoring to Mexico and CAFTA-DR nations is gaining traction, but comes with trade-offs: higher costs, capacity constraints, and inconsistent duties (e.g., 25% on some Mexican imports). While CAFTA-DR’s share of U.S. apparel imports dropped from 9.6% to 7.6% in early 2025, FTA utilization rose from 73.8% to 81.1%, suggesting brands are becoming more adept at extracting value from the agreement, even as overall volume dips.

India is also emerging as a key alternative sourcing hub, combining mature capabilities with geopolitical alignment. However, expanding there at scale means navigating regulatory complexities and ensuring high standards for quality, ethics, and compliance.

The rush to diversify must not come at the cost of integrity. As brands enter newer or less mature markets, ethical labor, environmental compliance, and human rights must remain non-negotiable. AI-powered supplier vetting and third-party audits can support this vigilance – safeguarding reputation while enabling agility in an increasingly fragmented global sourcing environment.

2️⃣ Merchandise Planning Remastered: Precision, Prudence, and Predictive Power Become Standard

The traditional, often rigid, seasonal merchandising calendar is proving increasingly ill-suited to an era defined by extreme uncertainty. Success now hinges on embedding a new level of precision, prudence, and predictive capability into the planning process:

  • Hyper-Responsive Pricing and Promotion Strategies: With acute consumer price sensitivity—over half of consumers are willing to switch brands due to significant price hikes —and volatile input costs, AI-powered dynamic pricing tools are transitioning from innovative options to essential instruments.
  • AI-Driven Predictive Forecasting as a Baseline: In a fluctuating economic climate, achieving high forecast accuracy (where AI can offer up to a 20% improvement or even cut errors by up to 50% as McKinsey suggests) is vital for optimizing inventory, minimizing markdowns, and understanding nuanced shifts in demand elasticity.
  • Strategic Assortment Curation and Inventory Management: A more discerning approach to assortments is emerging, often characterized by a “less is more” philosophy that prioritizes core items, proven sellers, and higher-margin products. There’s increased caution regarding highly experimental lines until consumer demand patterns stabilize. On-demand manufacturing and agile hybrid fulfillment models are also being actively explored to reduce upfront inventory risk.
  • Adapting to the De Minimis Revolution: The definitive elimination of the de minimis trade provision for direct shipments from China and Hong Kong (with new effective duties around 54% for these individual postal shipments) fundamentally alters the cost structure for ultra-fast fashion and D2C brands relying on this channel. This necessitates new pricing, global logistics, and potentially U.S.-based warehousing and fulfillment strategies.

3️⃣ Technology as the Indispensable Engine: AI, DPC, and PLM

In this complex, data-intensive, and rapidly changing global environment, technology is no longer merely an enabler of efficiency but the critical engine for adaptation, resilience, and sustained competitive advantage.

➡️ Artificial Intelligence (AI) – The Strategic Intelligence Layer:

AI’s role is expanding far beyond initial applications. It is now essential for:

  • Sophisticated Risk Modeling: Integrating and analyzing diverse data streams related to trade policy volatility, geopolitical shifts, macroeconomic indicators (including credit conditions and consumer sentiment), and even climate-related disruptions to provide predictive risk assessments.
  • Advanced Demand Sensing and Consumer Analytics: Moving beyond historical sales data to interpret real-time market signals, social media sentiment, and nuanced shifts in consumer behavior and purchasing power.
  • Supply Network Optimization and Simulation: Enabling dynamic management of complex global supply networks, simulating the impact of potential disruptions, identifying optimal alternative pathways, and proactively reallocating resources.
  • Enhancing Sustainability, Transparency, and Compliance: Leveraging AI for verifying material provenance, tracking ethical compliance across multi-tier supply chains, and accurately calculating and reporting Product Carbon Footprints (PCFs).
➡️ Digital Product Creation (DPC) & 3D Design

The urgent need for speed, cost reduction, and sustainability makes DPC and 3D design technologies indispensable. As demonstrated by industry leaders like Perry Ellis (who reportedly reduced physical samples by 50% and shortened product development calendars by two months through DPC), these tools radically diminish reliance on physical prototypes, slash material waste and shipping costs, and facilitate faster, more collaborative, and iterative design processes.

➡️ Advanced Cloud Product Lifecycle Management (PLM) Systems

Modern, cloud-based PLM platforms serve as the central nervous system for today’s fashion enterprise. They are essential for ensuring data integrity, fostering seamless global collaboration among design, development, sourcing, and merchandising teams, enhancing supply chain visibility and traceability, and enabling the rapid execution of sourcing and production pivots demanded by the current environment.

4️⃣ The Evolving Fashion Leader: Architects of Resilience in an Age of Ambiguity

This era of profound disruption calls for a new paradigm of leadership and a significant evolution in professional roles, particularly for merchandising experts – a key focus at industry gatherings like PI Apparel Merchandise Planning New York. The traditional art of merchandising, while still valuable, must now be powerfully augmented by the science of data, technology, and strategic global awareness.

The modern fashion executive and merchandiser must increasingly function as a strategic orchestrator, demonstrating:

  • Deepened Financial and Geopolitical Acumen: A sophisticated understanding of global economics, the intricacies of international trade policy, currency risk, and the far-reaching implications of macroeconomic events like sovereign credit rating downgrades.
  • From Predictor to Scenario Architect: The ability to move beyond attempting to forecast a single future to skilfully modeling multiple complex scenarios and developing robust contingency plans for diverse trade, economic, and geopolitical outcomes.
  • Mastery of Resilient Value Networks: A strategic focus on designing, building, and managing adaptive, multi-nodal global value networks, shifting from an emphasis on linear chain optimization to holistic ecosystem resilience.
  • Champion of Data-Driven Transformation & AI Literacy: The leadership to drive the enterprise-wide adoption, integration, and effective strategic utilization of advanced analytics, AI tools, and digital platforms.
  • Decisive and Agile Leadership Under Pressure: The capacity to make informed, high-stakes decisions swiftly and confidently, often navigating ambiguity with imperfect or rapidly evolving information.

Looking Ahead

The strategies explored here in Part 2, mark the foundation of fashion’s transformation. But strategy alone is not enough.

In Part 3, I’ll distill these insights into a set of actionable imperatives – the essential building blocks of an antifragile fashion system. From operational resilience to ethical clarity and ecosystem collaboration, I’ll explore what it truly takes to lead through uncertainty and shape a stronger, more intelligent industry on the other side.

Part 3 will be released on Tuesday 3rd June…

Sources

McKinsey & Company, AI-Driven Operations: Forecasting in Data-Light Environments, 25 Apr. 2024
Bloomreach, The Merchandiser Reimagined: How AI Is Changing the Role
Syrup Tech, AI in Footwear Merchandising: Advancing Flexibility and Profitability
Techpacker, How Artificial Intelligence is Revolutionizing the Fashion Industry
Marketsy.ai, AI and Fashion: How AI Is Revolutionizing the Fashion Industry
Logistics Viewpoints, Amazon and the Shift to AI-Driven Supply Chain Planning, 26 Mar. 2025
PYMNTS, Walmart Develops AI Assistant That Helps Merchants Source Products
Alvarez & Marsal, Global Shift: Taxing De Minimis Imports and E-Commerce Strategies
Maersk Insights, Navigating 2025’s Geopolitical Supply Chain Landscape
BoF x McKinsey, The State of Fashion 2025

For a full list of citations and further resources provided by the author, please contact us or reach out to Richa directly.

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Editors' PickPeople & LeadershipSupply Chain

Part 1 – From Trade Shock to Strategic Shift: Why Fashion’s Old Playbooks No Longer Work

by Richa Agarwal
written by Richa Agarwal

Editor’s Note: This article is the first in a three-part series by Richa Agarwal examining how the 2025 tariff environment and broader economic disruption are reshaping the global fashion industry. Here, in Part 1, Richa explores the macro forces at play – from trade policy upheaval and economic volatility to shifting consumer behavior and sustainability crosswinds – and how they are rendering long-held operating models obsolete.

In Part 2, Richa will outline the strategic transformations now underway – and in Part 3, she’ll distill the road ahead into a set of actionable imperatives, offering a blueprint for antifragile value networks.

The Storm Hits: A System Under Siege

The global fashion industry is currently navigating a perfect storm; a confluence of disruptive forces testing its foundations like never before. As a seasoned veteran of the apparel and footwear sector, I’ve witnessed numerous market cycles, but the current environment – characterized by extreme trade policy volatility, significant U.S. economic headwinds including a recent credit rating downgrade, and persistent geopolitical instability – presents a challenge of unprecedented scale and complexity.

The “tariff whiplash” initiated in early 2025 – characterized by a new baseline 10% U.S. duty on most imports, compounded by steep “reciprocal” tariffs on key sourcing hubs (with China, for example, seeing effective rates swing dramatically before settling temporarily around 30-54%), and the pivotal elimination of the de minimis provision for China and Hong Kong – was already reshaping our operational landscape.

Now, as of late-May 2025, these trade pressures are amplified by new economic realities, most notably Moody’s recent downgrade of the U.S. sovereign credit rating. This development, signalling concerns over national debt and fiscal stability, has sent jitters through financial markets, threatening to increase borrowing costs for businesses and consumers alike, and potentially dampening already fragile consumer confidence. The old playbooks are not just outdated; they are obsolete.

The New Mandate: Rethink, Rebuild, Respond

But within this perfect storm of tariff chaos, credit concerns, and persistent global uncertainty lies a stark, unignorable mandate: this is not merely a crisis to be weathered, but a powerful, if painful, catalyst for the profound evolution of the fashion industry. It’s an urgent call to accelerate the adoption of intelligent technologies, build radically resilient value networks, and fundamentally rethink how we plan, source, and deliver value in a new global era.

The Shattered Illusions of a Bygone Era

For too long, many segments of our industry operated on a model of hyper-optimized, lowest-cost sourcing, often heavily concentrated in specific regions. This paradigm, while delivering margin benefits in a more stable world, carried inherent fragilities – exposure to geopolitical shifts, a lack of deep supply chain transparency, and mounting ethical and sustainability pressures. The trade policy shocks of 2025, now compounded by broader economic anxieties, have shattered the illusion of that old stability.

The immediate repercussions are being felt across the board:

1️⃣ Intensified COGS and Margin Compression

Persistently high effective tariff rates—the U.S. average remains at its highest since the 1930s, despite temporary rollbacks on some China tariffs—continue to inflate the COGS (Cost of Goods Sold). This, now potentially combined with broader inflationary pressures and higher capital costs following the credit downgrade, places extreme and ongoing pressure on margins.

2️⃣ The Beleaguered Consumer

Tariff-driven price hikes, with apparel and footwear, projected by the Yale Budget Lab, to see sustained double-digit increases (14-16% for apparel and 15-19% for shoes in the long run), are now confronting a consumer base potentially more cautious due to wider economic uncertainties and the prospect of increased borrowing costs. Major retailers like Walmart have already signaled the inevitability of passing these costs on to the consumers.

3️⃣ Inventory Risk Reaches Critical Levels

The combination of volatile consumer demand, disrupted global supply chains, and uncertain cost structures makes inventory management a high-wire act. The risk of crippling overstocks or damaging stockouts is significantly amplified.

4️⃣ Sustainability’s Crossroads

While direct investment in ambitious ESG programs faces even greater financial headwinds, the economic pressures on consumers could inadvertently accelerate trends towards product durability, repair, and the already burgeoning resale market —sectors not directly impacted by tariffs on new goods. This aligns with the critical need for verifiable sustainability claims, moving beyond platitudes to leverage AI and granular Product Carbon Footprint (PCF) data for genuine transparency, as I’ve emphasized in my broader work.

The Road Forward

The disruptions of 2025 have shattered long-held assumptions and laid bare the vulnerabilities in fashion’s global value system. But if Part 1 has mapped the contours of the crisis, Part 2 is about the response – the strategic recalibrations, technology investments, and organizational shifts already taking shape.

t-2 sleeps til Part 2.

Sources

Frontier.cool, 2025 Tariff Changes: Impact on Fashion, Textiles & Manufacturing, 12 Apr. 2025
UPS Supply Chain Solutions, 2025 Tariffs and Their Impact on Global Trade, 12 May 2025
Yale Budget Lab, State of U.S. Tariffs: May 12, 2025
Wall Street Journal, What the U.S.–China Tariff Rollback Means for the American Economy, 12 May 2025
Just Style, Outlook 2025: What’s Plaguing the Apparel Supply Chain?
Fashion Dive, Nearly Half of Shoppers Are Concerned About Tariff-Related Fashion Costs, 13 May 2025
Anadolu Agency, US Loses ‘Top’ Credit Rating from 3 Major Credit Rating Agencies, 19 May 2025
Palmetto Grain, Stocks Set to Open Sharply Lower After U.S. Credit Rating Downgrade, 19 May 2025
Investopedia, A Trade Loophole Is Closing. Here’s What That Means for Your Online Shopping Costs

For a full list of citations and further resources provided by the author, please contact us or reach out to Richa directly.

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