Intense competition and short product life cycles in fashion retailing present a number of marketing challenges for retail firms in Kenya. In order to survive in this industry, it is vital for participants to develop and leverage core marketing capabilities. The purpose of this study was to analyze the relationship between marketing capabilities and firm performance in Nairobi, Kenya. The following three specific objectives were addressed. One, to identify marketing capabilities relevant in the fashion retail industry. Two, to establish the level of performance of firms in the fashion retailing industry and lastly to analyze the influence of marketing capabilities on firm performance in the fashion industry. Primary data was collected using questionnaires. The target population were 62 branded retail stores located in major shopping malls in Nairobi County. Descriptive statistics, correlation analysis and multiple regression analysis were used to analyze the data. Specifically, price management, product management, promotion capability and store image were the marketing capabilities examined for their influence on each of the four firm performance variables namely customer acquisition, customer loyalty, new product/stores and market share. Results showed that product management was significant in explaining customer acquisition, customer loyalty and new product/stores and insignificant in explaining market share. Store image was only significant in explaining new product/stores. Price management and promotional capability were insignificant in all cases. The findings generated from the study should provide marketing managers with an understanding of the relationship between marketing capabilities and firm performance in the Kenyan context and give them insights on which capabilities they should concentrate on in order to gain competitive advantage. This study only looks at one type of capability; marketing capabilities, future research should examine different types of organizational capabilities for example dynamic capabilities, organizational learning capabilities, inside-out capabilities, outside-in capabilities and assess their impact on firm performance. The study was conducted within a period of seven months running from November 2015 to May 2016.