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That retail is in the doldrums is anything but breaking news. By now, the industry is all too familiar with the drumbeat of downbeat headlines: Chapter 11 filings, multimillion-dollar losses, job cuts — all while excess inventory continues to grow and markdowns spread.

This story first appeared in the April 27, 2009 issue of WWD. Subscribe Today.

But at last look, people weren’t wandering the highways and byways of America naked. So someone must be buying something, even if in significantly fewer quantities than before. Surely there’s at least one positive angle out there.

“We’re all aware of the economy,” said Ken Downing, senior vice president and fashion director of Neiman Marcus, which is among those reporting losses and declines in same-store sales. “It’s not like we just woke up yesterday and opened the store. But there are some bright, shining moments.”

And he’s not just blowing sunshine. As the truism goes, when the economy tanks, lipstick sales soar. The phenomenon, known as the Lipstick Effect, dates back to the Great Depression and has provided bright spots in otherwise dull retail landscapes. Meanwhile, Estée Lauder chairman Leonard Lauder added credence to the economic indicator when he coined the “Lipstick Index” post 9/11. The square root of the concept is an easy, feel-good item that offers a quick and affordable fix.

And while the notion extends beyond cosmetics, lipstick, it seems, still fits the bill, particularly Guerlain’s Rouge G de Guerlain ($45), according to Bergdorf Goodman and Neiman Marcus.

What else is selling in this definitely depressed moment for retail and the economy? WWD asked various retailers and designers (many of whom curiously declined to participate) for their Lipstick Effect items. Read their lips:

Ken Downing, senior vice president and fashion director, Neiman Marcus: “The new lipstick is shoes. Customers have really been responding to statement shoes that are supersexy and aggressive, from Tory Burch to Christian Louboutin, Manolo Blahnik and Christian Dior. It’s the feel-good piece of the season. The Tribute [the sky-high platform sandal] from Yves Saint Laurent has been very popular with customers in the black patent or the luggage leather. Also from Christian Louboutin, there’s a multistrap nude patent. The nude shoe is such an amazing idea, because it goes with everything. Of course, everything old is new again. Lipstick is selling. Actually, one of the most popular ones is the new Guerlain Rouge G, the red lipstick.”

Margaret Brinckerhoff, vice president, general merchandise manager of retail, Donna Karan International: “We’re doing very well with boyfriend jackets in both lines, DK and DKNY. The boyfriend jacket for DKNY retails for $445, and the collection, which was not the same jacket by any means, is $2,895. They’ve been the top performers so far. The DKNY Cozy has been like our Lipstick Effect all year round. They range from $160 to $195. It can be worn a minimum of 12 different ways. It has such versatility.”

Linda Fargo, senior vice president, fashion office and store presentation, Bergdorf Goodman: “Our clients are definitely reaching for items to either make them smile, make them feel fierce and sexy or make them feel calm and comforted. The point is, [their purchases] all make them ‘feel’ something. There’s a love affair with shoes, especially if they’re extraordinary and over-the-top, such as Balmain, Jimmy Choo and Alaïa. Fringed anything from Phillip Lim, the ‘It’ item master. The secret-agent-worthy Rouge G lipstick from Guerlain, and Cire Trudon’s Carmelite candle, which is inspired by the mossy stones of a peaceful convent — take me there!”

Julie Gilhart, senior vice president and fashion director, Barneys New York: “We have been selling a lot of scarves, bags and shoes. Basically, like lipstick, one can wear any of these items every day if one wants. The interesting thing is they are not classic ‘basics.’ Scarves are ones with unusual prints and colors. Handbags are like Proenza Schouler’s PS1 bag, stylish, functional, not seen everywhere and available in great colors. Shoes are in special colors like Manolo Blahnik’s pointed-toe suede pumps in teal. The important idea is to buy quality and style that will last a long time. The thing about lipstick is it only lasts for a while, and then you have to buy more!”

Liz Rodbell, executive vice president and general merchandise manager, Lord & Taylor:
“The costume jewelry business is really strong. It can add a lot to someone’s wardrobe, and it’s not a high-entry price point. Everything that we’re selling has color to it, and a lot of the looks that are selling are bohemian with sea beads, whether it be in bangles or layered necklaces. R.J. Graziano has done a grouping of necklaces for us that can be nested. We have some great-looking bangles from Kenneth Jay Lane. The story is really the color and the price range is about $30 to $60. The other thing that has come out strong is footwear, like last year’s gladiator but embellished with studs, chains, sequins and stones. There’s a Michael Michael Kors that zips up the front and a little jelly shoe from L.A.M.B. by Gwen Stefani.”

Scott Schramm, senior vice president and general merchandise manager, fashion, Henri Bendel: “Accessories typically have been recession-proof. We’ve been seeing amazing results within our Henri Bendel accessory collection. Cocktail rings — the workmanship is amazing, and you get bang for the buck with 100 pavé crystals on a ring for $78. We can’t keep them in the stores; they fall in the category of things that make you smile. Again, within our HB collection, our enamel bangles come in great colors, as well as signature stripes. Those retail from $68 to $148 and have been amazing all spring. The best thing happening in apparel right now is in the T-shirt category, mostly jeweled T-shirts by Young, Fabulous & Broke. It started during the holiday period, and it just continues to fly.”

Jenna Lyons, creative director, J. Crew:
“We’ve seen a huge surge in people buying multiples of jewelry, whether it be a pickup little cocktail ring or a bunch of pearls to layer together or a bigger statement piece. Especially with our price points, it’s an easy buy. We start anywhere from $45 all the way up to $150 for pearls. The other thing that’s been kind of fun is we took some of our ballet flats to $98 [from $128], and that’s become an ‘Oh, wow! An Italian-made shoe for under $100.’ Obviously we’re taking a slightly lower markup on it. When something is under $100, it’s a quick pick-me-up and becomes less of a thought process. We also have one little T-shirt called the Cupcake T. It’s basically a soft little tank with all these little funny asymmetrical ruffles all down the front, and it’s been phenomenal.”

Jack Calhoun, president, Banana Republic: “In today’s economy, accessories are a fashionable, easy and affordable way for women to feel good and update their wardrobe. Right now, our customers love our lightweight cashmere-blend scarves, python belts and statement jewelry.”

Marka Hansen, president, Gap brand: “This spring is all about color and fresh, bright clothes that make people feel their most optimistic selves. Our customers have responded positively to our new spring cardigan — at just $44 and in 22 colors, it’s an affordable and versatile way to mix up your wardrobe.”

Sari Sloane, vice president of fashion merchandise, Intermix:
“It’s really about pieces that are fun and playful and optimistic-feeling. Denim is doing really well in distinct styles like tie-dyed and distressed. We have sequined tees from Gryphon in exclusive colors that do great because they are a good price point yet are such a statement. Jumpsuits are also a big hit, because they are an instant outfit. As for accessories, headbands are huge as well as hats. We also found a great reaction when we launched Andrea Lieberman’s new collection A.L.C. Women want something new and fresh. Again, women are looking to make statements and feel good at the same time.”


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