Brazilian fashion retail has been growing in 2025, driven by a favorable macroeconomic scenario and even climate – a reflection of changes in consumer behavior and market competitiveness, but it does not affect those players of all sizes the same way.
For Iago Souza, Equity Research analyst at Genial Investimentos, the macroeconomic environment – with increased real performance of the Brazilian, which increased by 3.3% in a year and hit R $ 3,477, and unemployment at the lowest level of the historic series – favored the major players in the clothing industry, which saw their sales increase considerably, despite the increase in and the prices of clothing and shoes – accumulating – that accumulates – High over 4% in the last 12 months, according to.
“This year the minimum wage had real increase and there was also readjustment in the salary of the servers. In addition, we lived full employment. All of this made the consumer buy more, extrapolating essential expenses with market and pharmacy, and acquiring clothes, which are discretionary items, but with a lower ticket than appliances – this consumption yes impacted by restricted credit,” he explains.
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Another point raised was the most symmetrical competitive environment in relation to fashion retailers cross borderslike the Chinese Shein. This is because, since August 2024 purchases from abroad of up to $ 50 have been in charge of import tax, usually the 20% rate – in addition to the ICMS state tax, which has been charged since 2023.
The measure, unpopular among Brazilian consumers and a constant order of representatives of national retail, fueled the recovery of sector sales, according to Edmundo Lima, executive director of the Brazilian Textile retail association (Abvtex).
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“Reducing tax inequality with international platforms, popularly known as’ blouses’ rate ‘, brought some improvement in competition conditions, partially recovering the competitiveness of national retail. This advance allowed the consumer to return to the domestic market,” he said.
In addition, the registration cold in the country, especially in the south and southeast, helped the performance of fashion retail. The arrival of autumn and winter are especially important for the sector, because they happen at a time of year with fewer special dates for retail, except Mother’s Day, and because the pieces sold, such as married, pants and boots, are more expensive.
The punctual arrival of a cold autumn and a harsh winter encouraged the demand for autumn-winter parts, expanding the average ticket in various categories. “At the same time, retailers adopted more adjusted business strategies, with segmented promotions, fast turn -up settlements and efficient inventory management, which allowed to meet demand with competitive prices without compromising margins,” Lima added.
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Not everyone
Fashion retail is extremely sprayed. According to estimates, the industry leader is Renner () stores, which has only 10% market share (marketshare). And the positive effects that impacted the major players of the sector in the second quarter, such as Renner, C&A () and Riachuelo, from Guararapes (), failed to reverse the high cost of credit, and end up losing sales to the largest, according to Iago Souza, from the genius.
“With the basic interest rate, Selic, at 15%, the cost of credit has shot. Retail needs financing for the turnover, that is, to maintain the operation, buy clothes, leave in stock and sell. And that was very expensive and inaccessible for small businesses,” says Souza.
According to a survey by Serasa Experian released in June, 7.2 million companies were delinquent in the country, representing 31.6% of active businesses, with 6.8 million were. Another fact that shows how difficult it has been to survive for small businesses is the number of requests for judicial recovery, which totaled 2,273 requests in 2024, an increase of 61.8% compared to 2023, and until February 2025, they totaled 184 requests in the year.
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“More recently we saw Zinzane asking for judicial recovery. It’s a traditional fashion retailer. If the costs are too high even for a company of this size, imagine for the smaller retailers. So what we observed, besides the positive factors we mentioned earlier, was the gain of the Market Share of small fashion retailers for the big ones,” he explained.
Expectations for the second semester
The expectation for the second half of 2025 of fashion retail is positive, according to experts. This is because the economic activity of the period is traditionally larger than in the first, due to the concentration of commercial dates, such as Black Friday and the holidays.
“In addition, speaking of fashion retail, spring-summer pieces are cheaper, which increases the volume of sales naturally,” explains Souza.
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Speaking specifically about the balance sheets of the 3rd trimester’s major fashion retailers, it is expecting them to show some annual slowdown due to the strong comparative base of the same period last year, as the high temperatures recorded in 2024, although they have harmed the second trimester sales (Outone-winter collection), helped the third (spring-summer collection).
“When we look at it, we see a more positive effect for the second quarter and a little more pressure at the beginning of the third,” Renner CEO Fabio Faccio explained in a recent company’s results conference conference.
Additionally, for Edmundo Lima the assertive sales strategies will be maintained in the third quarter. “Abvtex -associated retailers have been preparing with diverse collections, aligned with fashion trends and increasingly demanding consumer behavior, as well as maintaining competitive business strategies to support the sales pace observed in the first half.”
Still, according to Lima, the sector should remain “an eye on fish and the other on the cat”. “We remain attentive to macroeconomic factors such as high interest rates, persistent inflation and“.
IR exemption for those who earn up to $ 5,000: positive perspective for the sector
The income tax exemption for those who earn up to $ 5,000, which today has the potential to positively impact sales of discretionary retail.
“I believe the sector remains in evidence in 2026, especially if this exemption is actually approved. This will represent injection (consumer) in the sector vein. It is a very relevant theme for fashion retail,” concluded Souza.
