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Defining Moments: Money, Honey

Baraged with news of bankruptcies and closure of boutiques, retailers at fashion shows tried to figure out how to buy under the most trying circumstances.

Appeared In
Special Issue
WWD Collections issue 04/13/2009

Baraged with news of bankruptcies, including Fortunoff, Searle, Mervyns, Harold’s and Steve & Barry’s, and the closure of boutiques like Linda Dresner, Georgina and Tracey Ross, retailers sat at fashion shows trying to figure out how to buy under the most trying circumstances many say they’ve ever experienced. Consumers, it appeared, had gone on strike.

This story first appeared in the April 13, 2009 issue of WWD.  Subscribe Today.

By early March, the Dow Jones Industrial Average had plunged below 6,600, its lowest point in nearly 12 years; the U.S. unemployment rate hit 8.1 percent for February, its highest rate in 26 years. Major stores were suffering monthly sales declines and worrying about cash flow, and cost-cutting at the retail and wholesale levels had become standard operating procedure.

Talk at the shows was clearly focused more on cutbacks than hemlines. Neiman Marcus and Saks were each cutting staff. Factoring companies were weighing whether to approve orders at Barneys New York. Two veteran fashion executives departed: LaVelle Olexa, senior vice president and fashion director at Lord & Taylor, and Michael Fink, vice president and fashion director at Saks, both victims of the downsizing at their respective chains.

Stores— many of which slashed fall budgets by 20 percent— had plenty of cause for concern, since there was no indication of how much worse business could get. The big question: whether to commit thousands of dollars to designer fashion if the luxury customer isn’t shopping.

“Everyone’s very cautious. It’s a difficult time to be spending money on a buy,” said Lori Hirshleifer Sills, vice president of Hirshleifer’s, the highend designer boutique in Manhasset, N.Y. “I don’t know what will happen this spring.”

Christina Makowsky, owner of the Georgina shops in Manhasset and Hewlett, N.Y., called it quits and closed her stores at the end of February. “I don’t feel comfortable. People’s mind-sets are changing and my mindset is changing. I’m going to take a time-out and reevaluate retail.”

Nevertheless, most designers took the attitude that the show must go on. They presented fall with conviction, while trying to cut expenses where possible. Show budgets, invitation lists, catering and model costs were all chopped.

“A lot of companies are definitely cutting budgets and there’s a tendency to cut the superfluous. Shows are simpler, with less scenography and with fewer seats,” said Bib Terenzi, founder of Spec. Entertainment, a New York-based production firm. “Many companies are cutting catering budgets— and Champagne may not be offered.” A new austerity also swept New York Fashion Week, as evidenced by McDonald’s McCafé, which provided mainstream coffee to Bryant Park showgoers.

Designers in Paris were obsessed with greenbacks, too. From faux money on the runway at Jean Paul Gaultier to cardboard houses on models’ heads at Bernhard Willhelm, designers channeled economic woes in many not-so-subtle ways. “It is all about sex and money,” Gaultier stated of his collection, hammering home the latter theme with a sound track that included Money by Pink Floyd, with cash registers ringing in the background, and Money (That’s What I Want), a 1979 cover by The Flying Lizards, whose emotionless delivery also sounded at Stella McCartney: “The best things in life are free, but you can give them to the birds and bees. I want money…” “Crises and crises all over the news, sending everybody’s mind spinning,” said Willhelm, where models wore blinders made of a dollar bill here, a 5 pound note there, and several wore hats meant to represent the ghosts of their houses. Foreclosure chic?

Guests at Jean-Charles de Castelbajac took The Flying Lizards theme to heart, scrambling to scoop up the cascade of dollar bills featuring President Obama, scattered by models in the finale, as if they
were genuine.

While trekking to faraway (and likely cheaper) places was the major beef of editors this season, runway photographers’ major grumble was lighting. The use of everything from daylight-only to multiple spotlights meant lighting was problematic almost everywhere, reflecting budgets reduced by almost a third. The bigger the houses, the more drastic the cuts, according to runway maverick Alex de Betak, who said runway producers were working hard to scale back size without jeopardizing quality. While previously, houses would stage a runway show, an after party or another event, the industry motto became “fewer and better. In the luxury world that we’re in, it’s better not to do something than not do it well,” said de Betak.

Stella McCartney held her usual after-show party, but with a palatable difference: free beer instead of bubbly, while those hankering after Champagne had to pay 10 euros, or about $13, a glass.

The celebrity quotient at the shows dropped off considerably this season, too. “If people were having to make the decision on head counts, maintaining their work room and sales associates, or cutting ad pages, it seemed to be very low on their priorities— or not even on their priorities— to fly in a movie star for $200,000,” said publicist Paul Wilmot.

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