Policies and parties.
This story first appeared in the August 19, 2008 issue of WWD. Subscribe Today.
Those will be the key themes running through the Democratic and Republican conventions over the next two weeks as the presidential candidates vie to indelibly stamp their messages onto the minds of the American people; the delegates and assorted hangers-on frolic the nights away, and the networks struggle to gain a nationwide television audience a fraction of the size of NBC’s coverage of Michael Phelps and his eight Olympic gold medals.
But in the most wide-open presidential election in 80 years, with no incumbent president or vice president in the race, the conventions are attracting more attention — and star power — than in decades. For instance, Fergie and the Black Eyed Peas, Kanye West and Leonardo DiCaprio are expected to turn out for the Democrats, while Kid Rock and Patricia Heaton will hit the Republican gathering.
Amid all the celebrations, however, the Democrats and Republicans have to tread a narrow path: celebrating Sens. Barack Obama and John McCain, while at the same time not appearing unmindful that consumers are struggling with rising unemployment, sky-high gas prices, the continuing war in Iraq and spiraling war in Afghanistan — not to mention a seeming ambivalence among many about either candidate.
While the two presumptive nominees have spoken endlessly about their visions, and sparred over them, the conventions mark the beginning of the final phase of the lengthy presidential race. During the next two weeks, the candidates and their parties are expected to use their election-year platforms to put flesh on some of the more vague policy statements Obama and McCain have been making during the primaries and beyond.
And fashion and retailing will read the platforms closely, since they are playing a higher-profile role in this year’s race than ever. The industry has been caught up in everything from vying to outfit the chic candidate wives Michelle Obama and Cindy McCain to, in the case of Wal-Mart Stores Inc., making front-page news for allegedly trying to influence employees’ voting.
Several Seventh Avenue designers are even teaming up with the Obama campaign and donating their efforts to a project aimed at glamming up the official campaign merchandise and making it affordable to a wider swath of Obama supporters.
“This election is going to be decided by women who make up the majority of the electorate — and this project is one of many ways the campaign is engaging our women supporters across the country,” said a spokeswoman for the Obama campaign.
Designers such as Derek Lam and Charles Nolan (who will attend the convention) are lending their names to the Obama cause and churning out a product line ranging from appliqué T-shirts to tote bags for the presumptive presidential nominee’s Web site. The merchandise, which will be manufactured in the United States, will be offered on the site next month in exchange for contributions to the Obama campaign.
Whether that gains Obama more support in the industry remains to be seen. Retailing has been one of the hardest-hit sectors in the economic downturn, as consumer confidence slides and the credit crunch deepens, caught in an alarming pattern of bankruptcies and consolidation. Boscov’s, a 97-year-old merchant based in Reading, Pa., was the most recent victim of the downturn, filing for Chapter 11 this month. The middle-market retail chain was the third retailer to file for bankruptcy in the past two months, behind Mervyns and Goody’s Family Clothing.
“What’s it going to take to get people back in the stores? What’s it going to take to get corporations to feel comfortable investing in capital expenditures? What’s it going to take to get business in general to move away from a hunker-down mentality?” asked Peter Gabbe, executive vice president and chief operating officer of Carole Hochman Design Group and chairman of the American Apparel & Footwear Association, outlining the concerns of the business community this election year.
While Gabbe said neither candidate has provided a clear-cut answer, executives will be weighing their policy positions in several key areas, from trade to taxes.
“I think this election juxtaposes two candidates with vastly different views of the relationship between government and business,” said Marick Masters, a business professor at the University of Pittsburgh. “Most immediately, it will probably be shown in the position they have on extending President Bush’s tax cuts. Businesses have lined up solidly behind extending those tax cuts,” which expire in 2010.
Democrats oppose extending the tax cuts, while Republicans support a permanent extension.
“That is one tell-tale sign of the differences between them,” Masters said. “But to a certain extent, there is the great possibility that the issues of taxes and spending cuts will be overshadowed by energy policy, which drives up the cost of doing business for retailers and others.”
Masters said soaring energy prices affecting consumer budgets were a big culprit that “really put the squeeze on companies like Boscov’s.”
“The price of energy reduces people’s disposable income and raises the cost of doing business,” he said. “Merely buying and shipping things becomes more expensive.”
Where McCain favors a multipronged approach that includes more offshore drilling in the U.S., development of alternative fuel sources and nuclear power expansion, Obama favors fuel efficiencies, an intense focus on developing alternatives such as wind and solar power, a cap and trade system and limited oil drilling.
“Sen. McCain’s ‘Jobs for America’ plan includes keeping taxes low, providing incentives for innovation, for new technology, addressing the problems of high energy prices by providing relief from the federal gas tax, making sure that we have lower energy prices in the long run by pursuing an ‘all-of-the-above approach’ to long-term energy security that will help free us from a dependency on foreign oil,” said a McCain spokesman.
Obama’s campaign did not respond to calls for comment on the issue.
Global trade is another issue the candidates will continue to debate because it is one of the top consumer concerns in the polls. Apparel firms, which imported $95.6 billion in goods in the last year, are warily watching Obama, who on the hustings has been more skeptical about free trade than McCain, an ardent free trade advocate.
“The whole trade industry has a lot riding on this election,” said Frank Kelly, an industry consultant and a former vice president of international trade compliance and government affairs for Liz Claiborne. “I think you want a president who won’t be a protectionist, and the fear is that the Democrats and Obama are very much leaning that way. You want someone who is going to realize that goods being imported into the U.S. are one of the main factors that boosts the economy. Whether Obama will do that or not if he wins is the big question.”
The flash point between importers and domestic textile producers — an issue certain to confront a new president — is a three-year bilateral quota agreement with China that restricts 34 categories of apparel and textile imports and is set to expire at the end of the year.
“Extending China safeguards [in some form, such as monitoring] is a top priority for the industry, particularly looking at what happened when China safeguard quotas came off certain categories [in 2005], where they increased 65 percent,” said Anderson Warlick, chief executive officer of Parkdale Inc., a Gastonia, N.C., yarn producer.
Warlick, who is also chairman of the National Council of Textile Organizations, said he does not put much stock into what the candidates say about trade on the campaign trail, but he did take exception to McCain’s self-prescribed label as a “free trader.”
“Most of the time when you sit down with someone and ask them whether they think free trade is giving China’s companies opportunities through subsidies to compete against you or whether they think currency manipulation is free trade, they say ‘no,’” said Warlick. “I would love [McCain] to define what free trade is.”
Warlick said the industry will stress with any administration that seeking stronger enforcement and action against illegal trade activity is not “protectionist,” but rather a right to which U.S. producers are entitled under existing laws.
Gary Ross, global vice president of the supply chain for Avon Products, cited opposition to the China import monitoring initiative as the biggest priority issue on the industry’s list.
As to which candidate would favor importers’ position on the issue, Ross demurred, but acknowledged McCain’s position as a free trader and characterized Obama’s position on trade as “mixed.”
Obama has not addressed the industry’s issue and McCain’s spokesman declined to comment.
Another issue poised to gain steam in the election debate is that of unions and their initiatives.
The issue surfaced recently in a Wall Street Journal story that quoted several unnamed Wal-Mart employees who said the company held meetings with U.S. store managers to discuss a pending bill known as the Employee Free Choice Act. The act would make it easier for employees to unionize, and Wal-Mart managers allegedly warned employees that if Obama wins the presidency, he would likely push the bill through Congress. Obama is one of the sponsors of the legislation.
U.S. labor groups filed a complaint with the Federal Election Commission on Thursday calling for an investigation into allegations that Wal-Mart violated election laws by warning employees to vote against Obama for president because of his support for the legislation, which allows a card-check system to determine whether workers want to join a union, instead of a closed-ballot election.
A Wal-Mart spokesman said, “Our policies are clear and we have communicated to our associates that, if anyone representing our company gave the impression we were telling associates how to vote, they were wrong and acting without approval. We believe that, if the FEC looks into this, they will find what we’ve known all along: that we did nothing wrong.”
Mark Levinson, chief economist at UNITE HERE, said, “From the labor perspective, probably the most important issue is the Employee Free Choice Act and, as indicated by the Wal-Mart situation, this will be a big issue in the election. This could in a way define the Obama presidency if he wins.”