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The pulse of fashion. The power of beauty.

Spotlighting the trendsetters in fashion and beauty retail.

Although 2024 was a challenging year for retailers, we saw strong growth across the beauty and wellness sector and unwavering resilience across our fashion client base. The early warm weather in 2025 has resulted in positive trends reported across our client base and consumer spend data.

Isabella Clough

Co-head of Fashion and Beauty, Retail and Wholesale, Barclays Corporate Banking

Based on our long-standing relationships with our clients, we’re confident retailers across the fashion and beauty sector will continue to demonstrate their ability to make the most of new opportunities this year, continually adapting to the evolving consumer behaviours.

Melissa Pendlebury

Co-head of Fashion and Beauty, Retail and Wholesale, Barclays Corporate Banking

15.1% year-on-year increase in pharmacy, health and beauty spending in April 2025.
3.6%  Year-on-year increase in clothing spending in April 2025.
46% of those surveyed now consider health and beauty products to be essential purchases.

Beauty is looking good as spending increases

Our consumer spend research1 reveals a strong performance from pharmacy, health & beauty products with sales up by 12.2% year-on-year (YoY) in Q1 2025. This means it’s outpacing overall consumer spending growth of 0.5%, while fashion sales were also up 0.7% over the same period.

Graph for webpage - Monthly year-on-year change in spend for Retail and Fashion & Beauty sub sectors

Is consumer confidence improving?

  • Starting the year off on a high, overall retail spending grew 1.2% YoY in January. This suggests that retailers had a relatively strong seasonal sales period this year, perhaps due to cost-conscious shoppers taking advantage of promotional deals.
  • Our research reveals that consumer confidence has improved in 2025 so far, with overall retail spending growing by 6.8% YoY in April.
  • However, this renewed confidence remains relatively fragile. Karen Johnson, Head of Retail and Wholesale, Barclays Corporate Banking, says: “Consumers are being careful with their discretionary spend, and this is impacting the fashion sector in particular, with less YOY growth seen, as it’s usually something consumers can rein back on when there’s uncertainty.”

Social media impact

  • E-commerce is still outpacing in-store shopping growth in the fashion and beauty retail sector. Online spend on pharmacy, health and beauty grew 32.5% in Q1 2025 compared to Q1 2024, while in-store spend on the same categories grew just 1.4% in the same period.
  • Online marketplaces continue to transform retail, with younger consumers increasingly favouring pre-loved clothing, plus other fashion and beauty products, on platforms such as Vinted and Depop.
  • It’s important for retailers to consider consumers of the future, who look likely to be influenced by social media channels more and more. In our consumer confidence survey, 19% of all consumers said they have been influenced by social media to make a purchase, rising to 40% for Gen Z specifically.

Beauty and wellness boom continues

  • The 12.2% YoY growth seen in health & beauty spend in Q1 2025 continued in April with a 15.1% YoY growth, reaching a 37 month high.
  • It’s possible that this spending trend is connected to the fact that 46%2 of consumers consider health and beauty products as ‘essential’ – and are reluctant to cut them from their shopping lists.
  • Several of our clients attribute this upturn to the influence of social media promotions along with the ease of social media purchasing. These results also suggest a continuation of the trend we observed last summer, with cost-savvy shoppers turning to health and beauty dupes to obtain better value for money.

Time to target the 50+ segment?

  • Our data shows that consumers in the 65+ age group increased their spend by 10.3% on clothing and footwear in Q1 2025 compared to Q1 2024, while younger consumers (16–24 year olds) reduced their spend on clothing and footwear over the same period by 8.3%.
  • Similarly, spend on pharmacy, health and beauty products increased by 17.8% in the 50-64 age group, the highest spend increase of all age groups.
  • These findings are perhaps unsurprising. Karen Johnson, Head of Retail and Wholesale, Barclays Corporate Banking says: “Those aged 50+ often have less debt and more funds to spend. But how much of that is spent on themselves versus their children and grandchildren?”

The challenge – or opportunity – for retailers is to find ways to appeal to consumers who love to shop in-store and also to those who prefer to shop online. The key is having your product available to customers where, when and how they want it.

Karen Johnson

Head of Retail and Wholesale, Barclays Corporate Banking

Technology is on the shopping list

Businesses are exploring the potential of artificial intelligence (AI)

Faced with the challenge of rising employment costs and the importance of customer experience, retailers are expected to increasingly invest in technologies like AI. Based on conversations with clients, it’s clear many are already working with AI. However, there is nervousness about being the ‘first mover’ in some AI applications until they are more proven. We’ve already seen some important uses for AI, including:

Rising employment costs are accelerating investment in technology – but to get it right, businesses should ensure they understand its real potential and can bring in people with the necessary expertise.

Isabella Clough

Co-head of Fashion and Beauty, Retail and Wholesale, Barclays Corporate Banking

Cyber security is a top priority

Given the recent retail industry cyber-attacks, it’s unsurprising that 70% of retail sector leaders ranked cyber threats among their top three concerns in our 2024 Retail resilience report. The sophistication of cyber-attacks has risen sharply in recent years, with the risk of catastrophic data breaches and IT system failures as a result of ransomware and email phishing scams.

When holding a fireside chat at our one of our fashion and beauty industry dinners, Justin Hampshire, CEO at TFG London highlighted: “TFG London is all too aware of this threat; we know of several retail brands that have been severely affected by cyber-attacks. We are taking this very seriously and already block external emails to our stores and have a dedicated 24-hour monitoring centre that checks for breaches.”

Fraud and cyber security resources

We have a wealth of resources available to help protect your retail business against cyber fraud. You can view our quarterly fraud webinars and take a look at our other educational resources on our Fraud Protection Hub.

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Market consolidation expected this year

Appetite for M&A increasing?

Based on conversations we’ve had with our clients, there appears to be a healthy appetite for mergers and acquisitions (M&A) activity in the fashion and beauty sector this year, with several businesses looking to strengthen and widen their offering. Recent high-profile deals have included Prada’s purchase of Versace4.

Many of those pursuing an M&A strategy appear to be targeting vertical integration and product, geographic and demographic diversification. Others want to bolster specific parts of their business, such as their AI capabilities or social media presence.

Supporting TFG London's acquisition strategy

TFG London is home to some of the UK's most iconic premium fashion and lifestyle brands, including Hobbs, Phase Eight, Whistles, White Stuff and Inside Story with each brand offering a distinct customer experience and style. Barclays has held a relationship with TFG London since it was established in 2015, and was Hobbs’ founding banking partner in July 1981.

The importance of obtaining support from key stakeholders was the big takeaway for Justin Hampshire, CEO, TFG London, stating: “Working closely with advisors and partners, including Barclays, who were already aware of our growth and acquisition strategy, was essential. It enabled a smooth, fast paced transaction - we’re delighted all round.”

The upsized £90m syndicated revolving credit facility put in place last year for TFG London, part of leading South African retail business, The Foschini Group Limited, is just one example of our commitment to supporting fashion and beauty retailers with their growth ambitions.

We talked to the Barclays team about funding for the TFG acquisition strategy and what was in store for the Group. The team was fantastic throughout, remaining supportive and proactive, and we completed the re-finance last year, with increased facilities to support our growth strategy. This loyal and dependable banking partnership has been vital to TFG, and we could not be more delighted with the support of Barclays since establishment. We look forward to reinforcing the solid foundation we have built as we look to the future.

Justin Hampshire

CEO of TFG London

£22bn Business Prosperity Fund

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How could we support your fashion and beauty business?

Our dedicated and experienced fashion and beauty industry specialists can help you navigate the opportunities and challenges facing the sector as you strive to realise your business ambitions.

We can provide a full range of transactional banking support and corporate financing solutions, including industry-specific credit support, cash management, payment and foreign exchange services and debt capital markets financing.

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