The Democratic Party's landslide victory in the midterm elections has marked a significant turning point for the global fashion and luxury sectors. With Democrats flipping control of both the Senate and the House midway through President Trump's second term, the market responded with immediate enthusiasm, seeing the Dow Jones rise by over 1,500 points, or 2.8%, on Wednesday morning. This political shift comes after a period defined by Republican-led policies, including 2025 tariffs that disrupted supply chains and ongoing conflicts in the Middle East that drove up inflation and energy costs.
To discuss these developments, Hildy Kuryk, interim CEO of the Council of Fashion Designers of America (CFDA), joined Vogue Business global director Nicole Phelps at the Vogue Business Global Summit in New York. The conversation highlighted a paradoxical economic landscape: while consumer sentiment hit record lows with 36% of voters citing inflation as their top concern, luxury spending in the United States remained robust. Major conglomerates including Hugo Boss, Kering, Zegna, and Hermès identified the US as a key growth area. Ermenegildo "Gildo" Zegna noted a 14% increase in the Americas region, while Hermès reported an 8.8% rise in North America during the third quarter.
Kuryk emphasized that the election results represented a repudiation of the current administration and its handling of affordability, rather than a purely progressive wave. She pointed out that Democrats successfully expanded their reach into rural areas, securing historic wins such as the first Black female governor, the first Latina governor in Texas, and the first Muslim senator. Despite these political changes, Kuryk cautioned that the US remains a deeply divided nation, making future predictions difficult. The immediate focus for the industry is on how a Democratic Congress will oversee executive actions, particularly regarding tariffs which do not require congressional approval but may now face increased scrutiny.
Looking ahead to the holiday season and beyond, the consensus among leaders is one of cautious optimism. Kuryk noted that while the top fifth of households continue to drive spending, the median household remains anxious about prices. Consequently, brands are urged to communicate their value directly to consumers who are wary of costs. The election also brought attention to emerging regulatory issues, with AI data-center moratoriums passing in many states, potentially impacting manufacturing and production strategies.
As the industry prepares for the 2028 presidential cycle, Kuryk advised designers to maintain focus on their creative work and customer relationships rather than getting distracted by political noise. She highlighted that the CFDA will continue supporting businesses through upskilling programs and AI partnerships. Ultimately, the challenge for both parties in the coming years will be demonstrating tangible improvements in Americans' daily lives, a factor that will likely influence future consumer behavior and investment decisions in the fashion sector.
Sources: Vogue.