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Will economic nationalism become fashionable?

This story first appeared in the March 30, 2009 issue of WWD. Subscribe Today.

As world leaders prepare to meet in London Wednesday for the G-20 Summit to discuss the global economy, protectionism in various forms is rearing its head from the U.S. to Europe to China. The debate has engulfed industries including textiles, cars and even Coca-Cola, and the question is whether fashion and luxury goods could find themselves caught up in the whirlwind.

Designers, executives and other industry observers played down the likelihood of the industry reversing its long march to globalization and pluralism, in line with President Obama’s about-face on the initial “Buy American” clause in the U.S.’ stimulus package, and China’s efforts to fight protectionism via a global acquisitions spree.

Still, the specter of fashion nationalism bubbled up recently in Denmark, where Prime Minister Anders Fogh Rasmussen sat in the front row at Copenhagen Fashion Week last month and full-page ads in the Dansk Daily distributed at the runway shows trumpeted, “Support your local designer, buy Danish.”

“It was targeted at a consumer audience,” said Eva Kruse, executive director of the government-funded Danish Fashion Institute, which ran the campaign. “It’s to say when you’re going into shops and buying clothes, when you have a Hugo Boss shirt in one hand and a Danish brand in the other, choose the Danish. Support the industry.”

The ad, which may also be placed in Danish fashion magazines this spring, sparked debate among Danish fashion players, with the Gallery trade show, which ran concurrent with the runway shows, threatening to pull copies of the Dansk Daily from its fair.

“This is narrow, really provincial thinking,” said Rasmus Storm, owner of the Copenhagen-based concept store Storm. “I completely understand people trying to protect their businesses, but at the end of the day, the guys who will survive this crisis are those who are forward-thinking, finding new solutions, who are doing a better job every day when they go to work. You can run ads, but at the end of the day, it’s about the product and the brand.”

Kruse claimed the ad’s primary goal is to encourage consumers to start spending again. “The home market is a big market for any brand, but for us this is a way of giving shopping a focus,” she said. “It’s to say, ‘Please go and spend some money.’”

Nationalism has also surged in Britain, with calls for British jobs for British workers, a British-themed issue of I-D magazine and the often jingoistic tabloid press throwing in its two cents on how to get the economy moving. In January, the Daily Mirror launched a “Buy British” campaign encouraging its readers to buy British goods ranging from Marmite spread to Imperial Leather soap to Fred Perry polo shirts.

The newspaper said local tycoons including Richard Branson and Alan Sugar are behind the campaign. “We must buy products that are made here…supporting a British firm creates work for someone,” asserted Sugar, who plays Donald Trump’s role in the U.K.’s equivalent of “The Apprentice” TV show.

 

 

Not So Easy

But the reality is fashion purchases are more complicated. “Buying clothes [made locally] is really a secondary consideration, except for those who are super politically or socially sensitive,” said Alexena Collins, a partner at London-based Brandsmiths, noting shoppers will likely consider cut, affordability, fashion trends and the occasion for which they’re intending to buy an outfit before they take provenance into account.

I-D’s March issue, Why Britain Is Great, came with 12 covers and was a salute to the country’s models and muses — past and present. Alongside the fashion shots, there were stories and Q&As with the likes of Twiggy, Kate Moss, Yasmin Le Bon, Alice Dellal, Grace Coddington, Stella Tennant and Erin O’Connor.

The introduction to the 110-page spread says there has never been a better reason to buy British — although that might just be rhetoric. The clothing in the shoot is a mix of British labels like Burberry, Giles, Kate Moss for Topshop, Mark Fast and Stella McCartney, but also Prada and Miu Miu, Versace, Loro Piana, Balenciaga and Yohji Yamamoto.

The Guardian’s weekly magazine subsequently shot Alexa Chung, the model-turned-TV presenter, in British fashions in the pose of a famous war production poster, “We Can Do It!”

“I think it’s unlikely that economic nationalism will filter through into fashion — I think women buy clothes irrespective of where they were made,” said Weekend Magazine editor Merope Mills. “But with our Alexa Chung shoot, we were trying to highlight the importance of fashion to the economy — and show off some of the great British brands in the process.”

The End of Globalization?

By contrast, Jeffrey Miller, a New York-based creative consultant, said the economic crisis could sound the death knell for globalization. “It was about gaining profit margins, and it wasn’t sustainable,” he said. “Instead, the future will be about using the resources that are right in front of you.”

Miller urged fashion companies to rely more on local artisans and manufacturing, while Americans may want to start buying American again. While the vast majority of clothes bought in the U.S. are made overseas, there are signs of a groundswell toward “Made in America” in at least one sector: men’s tailored clothing. “Shoppers are increasingly democratic,” Marty Staff, chief executive officer of men’s wear firm JA Apparel Corp., told WWD recently. “After price, Americans want to buy American.”

Others stressed fashion just doesn’t fit the nationalist mold — especially when Americans design for French labels, a German designer just signed with a Japanese fast-fashion retailer and firms source their products everywhere from Brooklyn to Beijing.

“I’d like to say that British buyers will gravitate to British designers, but it’s [in the] early days in the season,” said designer Anya Hindmarch. “Fashion is really such a global market. It’s a nice idea…but we need a free market, otherwise we’ll end up in a terrible muddle. We have to have free markets or we have a world that doesn’t trade. It doesn’t work in the long run. People want the bag they want. Fashion is about having something someone else doesn’t have. Food is an obvious one perhaps to buy locally, but not fashion.”

Designer Giles Deacon said he uses British silk weavers, but also Italian mills to create his collections. “I always want to use what is appropriate and right for each product,” he said. “I hope there isn’t a trend toward using only national products. It would be a disaster if everyone turned in on themselves.”

“I don’t think you can go backwards from global to local,” agreed Nathalie Rykiel. Though Sonia Rykiel has always represented the quintessential Saint Germain brand, it’s a concept made to travel, she explained, that’s as appealing to locals as it is to a woman in Dubai. “It’s about sharing values, an attitude toward life; not just clothes. There’s no way Sonia Rykiel would want to stick to the French market,” she said.

That doesn’t mean fashion isn’t viewed as important to national governments. After all, Obama insists on wearing union-made suits by Hart Schaffner Marx, while French economy minister Christine Lagarde was given pride of place at the Christian Dior show earlier this month — a seat next to LVMH Moët Hennessy Louis Vuitton kingpin Bernard Arnault. “It’s my expression of support to an industry which values a lot to the country,” said Lagarde. “We certainly want to support an industry that promotes craftsmanship and excellence,” she continued, noting that last year her ministry introduced tax credits to encourage companies in the design field.

Concetta Lanciaux, principle of Strategy Luxury Advisors, said the “return of the [local] tailor” could be one of the biggest trends to emerge from the economic crisis, citing a recent surge in demand for custom-made garments in Switzerland, where she lives. “Now instead of bringing in clothes to be repaired by tailors, people are bringing in fabric to be made into clothes,” she said, attributing the phenomenon partly to the fact that retailers are failing to deliver on several levels, such as fit.

Buying local will also evolve due to simple facts such as the cost of transportation, said Lanciaux. “Definitely there is less trust in globalization, or greater regionalization,” she said. “You can see today the needs of Americans are going to be different from that of Europeans or Asians entering a new economic cycle. However, the market is going to be about value for money, quality for less, and if global brands are able to meet that, the two trends will coexist.”

In Germany, Philip Beil, principal in consumer goods and retail at Munich-based Roland Berger Strategy Consultants, said any “Buy German” initiative would be “too loaded” historically. What’s more, “while there are strong German brands, the German consumer generally doesn’t pay attention to where they come from. Ninety percent of Esprit customers probably don’t even know Esprit is a German firm, and it’s the same with brands like Tom Tailor, S. Oliver or Betty Barclay.” (Ironically, Esprit was founded in California, and is owned by a Hong Kong-based firm, further exhibiting the complicated nature of fashion today.)

The one exception is cars: “Germans like to buy German. It’s a status symbol,” Beil said.

Siegfried Jacobs, deputy director of the German Association of Apparel Retailers (BTE) pointed to another historical argument against economic nationalism: In 1929, such protectionism and closure of markets actually exacerbated the effects of the Great Depression, he noted.

“We’re so globally cross-linked today that building artificial boundaries would be deadly. The markets have become more difficult, it’s true, but further barriers would only be to our disadvantage. You can’t turn back the wheel, at least not with a positive outcome,” he said, also pointing out, “There’s almost no clothing production left in Germany.”

The China View

China recently said it would reject protectionist measures in its domestic stimulus plan. “We won’t practice ‘Buy China’,” Vice Commerce Minister Jiang Zengwei said. The minister also urged other governments to promote free trade. “It’s impossible to meet a country’s market demand with only domestic products amid world economic integration,” he said.

Kenneth Jarrett, vice chairman of Greater China for communications firm APCO Worldwide, said since a large percentage of its gross domestic product is based on manufacturing for export, it is in the country’s best interests to encourage foreign countries to import Chinese products and services. “China’s textile and garment industry is a prime example of an export-focused industry,” Jarrett said. “Over 70 percent of the textile and garment products produced in China are made for export.”

Yet market access barriers for foreign companies still persist at national and regional levels in China.

Kunal Sinah, an executive director for advertising firm Ogilvy & Mather in Greater China and author of the paper “Chinese nationalism and its impact on brands,” said the “Buy China” sentiment would not materialize, particularly when it comes to fashion. “On the Internet, there is a lot of talk, and strong nationalist sentiment,” he said. “But does that sentiment translate into purchase behavior? That doesn’t necessarily happen. It’s fine for protesting, blogging and writing about it, but when the Chinese consumers spend money, they’ll go after quality, brand and price.”

Sinah also noted that aspirations drive certain product purchases in China. “For skin care and luxury, France reigns,” he said. “To the Chinese consumer’s mind, there is really no alternative to a Louis Vuitton bag as a status symbol.”

Patriotism has little traction when it comes to consumption in China. Moses, the political analyst, recalled that enthusiasm to purchase foreign brands ironically increased when the European Union imposed quotas on fashion imports several years ago. “Shops began to open and were filled with clothes that everyone knew were made in China,” he said, “[but] they had foreign brand tags on them so they were attractive.” Put another way, “when it comes to goods designed for consumer use, brands mean everything.”

In Japan, observers cited the dominant position of foreign brands.

“There is no movement for protectionism as for fashion products under this economic slowdown,” said a spokesman for the Ministry of Economy, Trade and Industry. “About 90 percent of the apparel traded in Japan is from overseas now, so it is not realistic to shift to protectionism. And generally speaking, because ‘Made in Japan’ products are more expensive, it is not always beneficial for consumers here to protect domestically made products. Instead, Japan takes more measures to export products to overseas in order for the industry to expand business.”

Kana Sasaki, investment analyst at the investment research information division of Mitsubishi UFJ Securities, said domestic products are good for shorter lead time to answer the consumers’ needs, but overseas brands are still very dominant. “People in Japan seek excitement in the fashion industry, which needs overseas brands,” she said.

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