As New York Fashion Week kicks into high gear, everyone from the designers in their ateliers to the retail executives in the front row and perhaps even the models on the runways has one word on their minds beginning with the letter "r" — and it isn't the color red. It's recession.
Suddenly consumers, that engine of the American economy, think it's unfashionable to spend money. The credit markets are tight; the stock market is dyspeptic; major U.S. financial institutions are having to turn to China and the Middle East for
financial lifelines; oil prices continue to flirt with $100 a barrel, and the once-mighty dollar now looks like a 99-pound weakling against the euro and the pound.
No wonder retailers and industry executives are nervous. And since a presidential election is in nine months, many are questioning whether America is headed back to the boom times of Bill Clinton and Ronald Reagan or the "malaise" of Jimmy Carter.
And since the last major recession was 20 years ago — when Erin Fetherston and Rodarte's Laura Mulleavy were age seven, Lazaro Hernandez and Jack McCollough were each eight, and Rachel Roy was 13 — WWD decided to do an informal survey of leading (and older) American industry executives who have weathered prior downturns for their tips on how to get through the tough times ahead.
Here are some of their strategies and suggestions:
Leonard Lauder, chairman of the Estée Lauder Cos.
"This is the fourth recession I've been through — and each previous recession was unique in its own way. I think this is as much as recession of economics as it is a recession of confidence. The root cause is that most people saw their nest eggs — the value of their homes — decrease and in many cases evaporate. They still have money, but they don't have the house money to fall back on and give them confidence in the future. The only advice I can give is be confident, and follow Mrs. Estée Lauder's advice, which she gave at the end of the Great Depression: 'There is no such thing as bad business. Business is there if you go after it.'"
Michael Gould, chairman and chief executive officer, Bloomingdale's
"Bloomingdale's will continue to take prudent risks, continue to explore new merchandise, new resources, and continue to ratchet up our desire to have new receipts on a regular basis. What this climate says to us is that there is a ton of business to be done. If you look at our conversion rates, we have such enormous opportunities. We have many new programs rolling out this spring — new loyalty programs, intensified clienteling. In this climate, you can not win by playing a defensive game. We have pushed our business more upscale and will continue to do that. The climate says you may not treat all your children [businesses] equally, but treat them all fairly. There are a number of businesses we will continue to intensify. We had a terrific '07. We will stay the course with our brand strategy — to be more upscale, less promotional, and provide a better in-store experience and more Bloomingdale's DNA for excitement."
Elie Tahari, chairman and ceo of Elie Tahari Ltd.
"I've been in this industry for over 30 years and I've seen the market fluctuate many times. In a challenging business environment, it's not enough for the customer to simply just 'want' something — she needs to get more out of her clothing in order to truly justify the spending. She also needs to feel emotionally compelled to buy a certain piece — to feel the overwhelming desire that she has to have it.
"For the Elie Tahari brand, we've always designed special pieces that are also versatile and timeless. This has helped us sustain our customer through economic downturns as she knows that what she is getting will last, but also that it will make her look and feel her best. Survival is about staying true to your customer and your brand even in the face of financial uncertainty. Cultivating brand loyalty from the beginning is the key to maintaining a thriving business in any market situation."
Andrew Rosen, ceo, Theory Ltd.
"The retail business will continue to grow in 2008, but less so then what we have seen in previous years. We can still expect for the consumer to buy clothing; however, their purchases will be focused on products that are worth spending or even splurging for.
@deciem is all about transparency and approachability. At this year’s WWD Digital Beauty Forum, the brand's co-CEO @nicolakilner said talking to customers directly about the ingredients in products and how they work is key. #wwdsummits #wwdbeauty
‘We didn't know how relevant our film would be when we were making it. When Steven [Rogers] wrote the script Trump wasn't president, class divide in America wasn't as evident as it is now, though it was present. The Time’s Up movement hadn't began and the way we look at women and treat women who speak out — thankfully that is something that seems to have shifted in the last year. I think we just need to continue making art that provokes the conversation and do what we can,’ said ‘I, Tonya’ actress @margotrobbie. Head to WWD.com to see all the celebrities who walked the red carpet @bafta #timesup #wwdeye (📸: Neil Hall)
Gemma Arterton is joined on the @bafta’s red carpet by Eileen Pullen and Gwen Davis, the two women who started the fight for the pay-gap. ‘They represent a normal person speaking out for what is right. Speak out, we will listen and anyone can speak out,’ said Arterton. #eebaftas #timesup #wwdeye (📸: David Fisher)