“Chin up” might seem like a fairly lame response to the deepening recession, but fashion insiders insist a little optimism is essential to offset the media’s round-the-clock coverage of the gloom-and-doom economy.
Perhaps building on the momentum of Barack Obama, whose presidency was sold on hope and the promise of change, fashion types are trying to execute their own administrative shake-ups. There is no denying the scale of this decidedly uphill battle. Deflation is a brewing threat, credit lines are being tightened, the 7.2 percent unemployment rate is the highest it’s been since 1993, energy prices are on the rise again, job security is as predictable as a lottery ticket – and that is just a sampling of the new realities with which consumers are grappling.
Sunless and severe as that might sound, a few intrepid designers and business owners are forging ahead with novel pitches and products. Their ideas range from the pragmatic, such as Freehands’ new iPhone-friendly gloves, to just plain fun. To fight the winter blues, the Mall of America is offering Minnesotans who spend $150 or more in its stores or restaurants two free passes to the mall’s indoor amusement park. The Irvine Co.’s Fashion Island in Newport Beach, Calif. has torn down a 30-year-old Macy’s store to make way for an 138,000-square-foot Nordstrom that will bow in spring 2010. Orlando Fashion Square, a 150-store shopping center, held a four-day inaugural sale that ended Jan. 19. Marketing director Dave Ackerman said, “It ties in with the optimism of the new administration coming in and hopefully a new day for the economy and the country.”
Many are taking stock of the lessons of recent months and even farther back. Emmanuelle Linard, a 20-year veteran with Li Edelkoort’s Trend Union forecasting service, said, “One thing we [have] learned is that while the world might not be any better, our perspective will have to shift from fear to joy. Trend Union believes in optimism as a necessary attitude for 2009,” she said.
After all, fashion has been through similar dark times. As Christian Dior’s president and chief executive officer Sidney Toledano recently noted, “Don’t forget that Mr. Dior and the New Look came after the war. It was an optimistic collection.”
There are those industry executives who contend a different viewpoint is what’s needed. Burt Tansky, chairman, president and ceo of Neiman Marcus Inc., voiced definite views about just how much misery loves company earlier this month at a forum hosted by Financo. Frustrated by the lack of spending by the rich, he lowered the boom on the media. “The media thrives on bad news. They started early in the year. It was negative and harmful,” he said, explaining that stories telling consumers where to get the best bargains didn’t help luxury spending.
And husbands aren’t helping the cause either. “Husbands used to say ‘Enough.’ Now they say, ‘Don’t even think about it.’” Tansky said.
These times are prime for self-reflection, according to Envirosell ceo and “Why We Buy: The Science of Shopping” author Paco Underhill. “The fashion industry has gotten so wrapped up in itself and has not kept up with what its customers’ needs are,” he said. “Getting back down to the services it can provide — that people can afford and use — is a very necessary part of our new world.”
Simon Collins, Dean of Fashion at Parsons The New School for Design, has said there is opportunity for brands with a genuine point of view and real direction.
But some designers soldier on. Late November wasn’t prime time for store openings, but the perennially upbeat Cynthia Rowley didn’t blink about unveiling one in Charleston, S.C.
“What do they say? ‘When the going gets tough, the tough get going.’ At this time, I’m encouraged to be even more inventive, and I’m given the opportunity to take more chances and do things that have never been done before. We’re all already outside of our comfort zones, and experimenting with new product categories, new territories and new strategic alliances only promotes creative and innovative thinking,” she said. “Optimism is a core value of our brand. I feel like everything we do has that spirit.”
Giorgio Armani clearly has a similar attitude, pressing ahead with the opening next month of his 43,000-square-foot megastore on Fifth Avenue in New York. Armani admitted the timing wasn’t great, but recently said of the store and its decor, “I was determined to send out a clear message of change, interpreting the current trend for mixing genres and juxtaposing items in different price brackets.”
Freehands founder Josh Rubin was equally undeterred about his company’s launch last fall and is close to selling all of the first season’s 20,000 units. Freehands are gloves with flipback fingertips that allow wearers to take calls, text, e-mail and snap photos. Rubin, who is also the founder and editor in chief of Coolhunting.com, said, “Yeah, things are challenging, but there still are opportunities. Even when the economy is down, you can still find something to design that is new, better or appeals to consumers’ needs.”
Rob Plaza, senior equity analyst with Zacks Equity Research in Chicago, thinks it would behoove the fashion industry to reference Depression-era chic. “Not to be too cynical, but they could look back historically at what people were wearing in the Great Depression. But people today don’t want to look too extreme or too dour,” he said. “It’s a tightrope for the fashion industry. People don’t have money to spend, but they still have to design something that people will look for or are willing to buy.”
Aware that December retail sales were “as expected pretty bad,” Plaza said, “things are not going to turn around anytime this year. Trends have been worsening. If you didn’t have reason to go out and shop in December when there was all that deep discounting, then what reason are you going to have in January, March or May? The first half of this year is going to be worse than the holiday selling season. This year has already been written off.
“By the end of last year, people were taking pride in being frugal and spending less. They talked about going to the Goodwill store instead of a brand name one. That’s a lot to overcome,” he said.
A few entrepreneurs are finding ways to cash in on consumers’ cost consciousness. Trend Union president Jane Buckingham cofounded Handmedowns.com, an e-commerce site for used children’s clothing. “If regifting was last year’s trend, reselling is this year’s hottest new habit,” she said.
Former publicist Melanie Seymour Holland also considered consumers’ overstuffed closets before recently starting The Closet Dominatrix. Her business offers wardrobe purging, resale advice and closet organizing among other services. “I realized that most women, myself included, have too much clothing and too often fall victim to retail therapy. Why not really take a look at what one owns, what one buys and why hold onto items just because of sentimental reasons and or price?” Holland said.
Her business’ unexpected name has triggered one recurring question. “Of course, a lot of people ask if I bring a whip,” she said.
In the U.K., “Twiggy’s Fashion Frocks,” a clothes-swapping show, was such a hit last fall on BBC Two, that its Web site now provides step-by-step instructions for hosting a swap. Others capitalizing on the old-is-new trend include Londoner Jo Poole, better known for her business The Dress Doctor. For $380 a day, she will rework ill-fitting clothes to make them more of-the-moment. “Nobody is a standard size in every store, and it seems people have increasing numbers of underused items in their wardrobes,” Poole said. “I am also now getting requests from husbands who would rather buy a day of my services as a gift for their wives than the latest trophy handbag.”
These types of pragmatic and handmade cottage industries are right in step with Trend Union’s D.I.Y. outlook. Linard said, “We need to figure out how to undo our 20th century-acquired consuming ways.” To that end, “Consumers will work on narrowing down our real needs, and hopefully apply our new level of clarity to a more collective level. Cleaning up and creativity,” she said.
Stores’ bloated inventories reflect a supply-and-demand system that no longer works and needs to be cleaned up, Linard said. Plaza, the analyst with Zacks Equity Research, agreed. Business will not improve until something is done about the overabundance of stores, too much retail square footage and too much inventory, he said.
Adding to that difficult situation is consumers’ worrying about their job security, retirement funds, the volatile stock market, food inflation and the yo-yoing price of oil, said Planet Retail’s global research director Bryan Roberts. “It’s simple mathematics. All people have to do is to look at their bank statements to see their ever-diminishing disposable income. People are reluctant to borrow money as well. There is a powerful sense of trepidation in regards to people’s confidence in the economy and their own personal situations,” he said.
The fact that December sales at Wal-Mart, Family Dollar and Kmart outperformed those at Saks Fifth Avenue and Sears seems to be testimony to that, Roberts said. And a new administration might not necessarily be enough to encourage consumer spending. “We have had a few politicians in the U.K. who have tried to evoke a we-can-spend-our-way-out-of-this attitude, but if you’re even remotely concerned about your job you are not going to be spending. And it would be foolish for consumers to splurge with their credit cards,” he said.
Interestingly, though the average current credit card rate is 14.32 percent, a slight decrease compared with this time last year, many shoppers are being squeezed. Justin McHenry, president of Indexcreditcards.com, a Web site that compares credit card features, noted that in the past six months, “Many people have seen their credit card rates jacked up by issuers, even when they have missed payments or exceeded their credit limits [instead of simply having their cards canceled]. If suddenly consumers have to pay back debt in a hurry or at a higher rate, they may be less likely to make further purchases with their credit cards.
“You can’t expect consumers as a whole to say, ‘Let’s be optimistic and go buy some new stuff,’ if their real feelings are fear and uncertainty. There have to be some real signs that things aren’t as bad as the media has reported them to be before consumers will dip their toes back into the water,” McHenry said, adding that decent sales reports from a few public companies and anticipated improved performances could create a snowball effect, reviving stock prices and reassuring consumers about spending.
Regardless, some Seventh Avenue types are trying to maintain an air of optimism. At Adspace’s “Let’s Jumpstart the Economy in 2009” party earlier this month, Adspace founder Eddie Kreinik made one request of his 200 guests: to talk solely about good health, happiness and prosperity. A few days earlier, Weatherproof threw its annual winter party for out-of-town buyers. President and chief executive officer Frederick Stollmack shrugged when asked about the economy and noted everyone likes a party. “Now we need to be positive more than ever,” he said.
But good thoughts will only go so far, according to Scott Plous, Wesleyan professor and author of “The Psychology of Judgment and Decision Making.” “I think that many consumers are indeed affected by fears over whether the economy will worsen and, in my view, encouraging people to remain optimistic will only work in the long run if the economy improves.”