The cold January weather in Germany didn’t bother everyone. Many people bought jackets, scarves and hats. That was at least conciliatory for some fashion retailers. However, this cannot hide the problems in the industry. Thrifty customers, high costs, bureaucracy and increasing competition from Asian retailers: the list is long.
The Textile Shoes and Leather Goods Trade Association (BTE) draws a negative conclusion for 2025 – and is hardly optimistic about the future. The situation is particularly tense in brick-and-mortar stores. As an association survey shows, every second clothing retailer ended up in the red last year.
BTE President Mark Rauschen calls the development “dramatic”. There is a risk that existing stationary retail and supply structures will collapse completely. “The exit of our industries must be stopped.” He speaks of a “horror scenario”.
Online share of over 40 percent
According to BTE, stationary shops, department stores, food and online retailers will have sales of a good 57.1 billion euros with clothing in this country in 2025. In nominal terms, this corresponds to an increase of around one percent compared to the previous year. Adjusted for prices, however, there is a decrease of around two percent. The decline was even greater in the shoe trade, which had sales of almost 11.5 billion euros.
Things have been going significantly better in online business recently than in brick-and-mortar stores. The sale of fashion and accessories has shifted significantly online. More than 40 percent of sales already come from online trading. No other industry achieves higher sales online.
The drivers include online retailers such as Temu and Shein. The BTE estimates that the industry in Germany lost around three billion euros in sales last year due to the Asian portals. The providers are controversial. Sales representatives and consumer advocates criticize, among other things, low product quality, a lack of controls and unfair competition conditions. Many consumers still buy from Temu and Shein regularly, especially because of the low prices.
Stationary retail in particular is coming under pressure. In order to lure customers and be competitive, many companies rely on discount campaigns – even if they have to forego profits. The result in many places was a seemingly never-ending sale in the important end-of-year business, extending into January. One reason for this was full warehouses. The retailers need space for the new collections.
Better a vacation than a new jacket
A problem will also accompany the industry in 2026. Many customers shop cautiously and economically – especially when it comes to clothing. According to a representative survey by the retail research institute IFH Cologne, 45 percent want to spend less money on fashion and accessories in the near future. In other areas such as living and furnishing or leisure and hobbies, the values are lower.
“From a consumer perspective, fashion is increasingly perceived as a classic savings range,” says IFH industry expert Carina Habke. If money is used more consciously, then it is more likely to be used for experiences, leisure or sport. The reason for this is a growing awareness of sustainability and health. Many people preferred to invest their money in organic food, regional products or long-lasting purchases instead of regularly buying new clothes.
BTE Managing Director Rolf Pangels also assumes that consumers are more likely to save on clothing than on travel. “Vacation offers a break from everyday life and worries. Many people are increasingly looking for that at the moment.”
Prominent bankruptcies
Expectations for 2026 are correspondingly muted. According to a BTE survey of over 200 fashion retailers, a third fear a drop in sales of one percent or more. In the clothing industry, only about one in three companies expects a significant increase, and in the shoe trade only about one in six expects. The situation is tense for many companies. Zalando’s announcement that it would close a logistics center in Erfurt with 2,700 employees recently caused a stir. The textile discounter Kik announced in September that it would close unprofitable branches. How many is still unclear.
For others, the situation is threatening their existence. “Insolvency events in the fashion and clothing trade will continue to worsen in 2025,” says the head of Creditreform economic research, Patrik-Ludwig Hantzsch. The most recent prominent cases included the fashion manufacturer Gerry Weber, the shoe retailer Görtz and the fashion brand Closed. The shirt manufacturer Eterna also filed for bankruptcy. In January, the rescue of the insolvent men’s outfitter Wormland failed.
Hantzsch does not expect a trend reversal in 2026. Bankruptcies remained likely, particularly for companies with high branch density, tight liquidity reserves and missing or outdated profiling. The number of clothing retailers has been shrinking for years. In 2010 there were just under 22,900 companies nationwide; in 2025 there were only around 12,050. The number of shoe retailers fell from more than 5,000 to around 2,450 over the same period. A dealer can be an individual self-employed person or a larger company with numerous branches.
