The trend: Fashion brands are expanding into new categories to futureproof their businesses amid uncertainty.

• Gap Inc. tapped industry heavyweights Reed Krakoff and John Demsey to lead its forays into accessories and beauty, respectively—a sign of the retailer’s grand ambitions beyond apparel.
• Reformation launched its first jewelry line in early September, with items priced between $98 and $348.
• Balenciaga introduced its first fine fragrance collection earlier this month, which includes 10 scents that retail for $320 each.
• Alo Yoga will release a line of luxury bags made from leather and suede—and containing a crystal for “intention-setting”—in late September, with prices ranging from $1,200 to $3,600.

The strategy: The timing of these expansions is notable given that many brands—including successful apparel companies like Levi Strauss—are paring down their selections in response to tariffs and uncertainty. But for Gap, Reformation, Balenciaga, and Alo, the time is right to branch into categories where spending remains resilient, or where there are untapped opportunities.

For Gap and Balenciaga, that means pushing into a beauty category that is highly saturated as players across the price spectrum vie for a piece of the lucrative market.

• Gap is betting that a lower price point—and Demsey’s experience at MAC Cosmetics—will encourage shoppers to add fragrances, hair mist, and body wash to their carts. Those higher-margin products could help offset costs from tariffs.
• Balenciaga, on the other hand, is hoping that rising demand for ultra-luxury scents will help the brand recover from slumping sales. Prestige fragrance sales increased 6% YoY to $3.9 billion in the first half of 2025, with gains in units sold and average selling price, per Circana.

For Alo and Reformation, their brand extensions are an opportunity to win a greater share of wallet from their customers.

• Adding jewelry to Reformation’s assortment allows it to offer “the full look”—including clothing, shoes, and handbags, CEO Hali Borenstein told Business of Fashion. Accessories are one of the fastest-growing categories for the brand, expected to generate $100 million in annual sales in the next three years.
• Alo, meanwhile, sees the growing convergence between wellness and luxury as an opportunity to burnish its own high-end credentials. But it remains to be seen whether even brand devotees will pay top dollar for its pricey offerings.

Our take: As spending trends shift, fashion companies are trying to shift with them. Pushing into resilient categories like beauty and jewelry may look promising on paper, but success is not assured. Brands face considerable competition from companies with more experience, and convincing customers that new offerings deliver quality and value can be a challenge.

Those that expand into new categories should follow the examples of Gap Inc. and Reformation. Both companies are relying on veteran expertise—Krakoff and Demsey for the former, ex-Givenchy designer Clare Waight Keller for the latter—to guide their extensions, which complement their existing selection. By comparison, Alo’s push into a category—and price point—that isn’t typically associated with athleisure could be a harder sell.