Mention the word recession to members of the fashion elite, and you'll get some colorful reactions. Among high-end retailers, a grim optimism is de rigueur. Burt Tanksy, CEO and president of Neiman Marcus, recently quipped: "Remember, when our customer tightens their belt, it's generally ostrich or alligator."
But even the rarified worlds of fashion and luxury are linked to the broader economy—and marketing lavish, often ephemeral goods is brutally challenging in the best of times. With banks tanking, bonuses vanishing, and retailer bankruptcies on the rise, peddling luxury in 2008 is no enviable task.
Here's a quick survival guide for how the American fashion industry will ride out these distinctly un-fabulous times.
1. Accessories will be everywhere.
Like jewelry, for example.
In a paper detailing predictions for the 2008 luxury market, consumer-trends analyst Pam Danziger of Unity Marketing deemed jewelry purchases less susceptible to market fluctuations. "Jewelry is unique among luxury goods because it offers the customer some perceived inherent value," she said.
Retailers and editors are keeping their fingers crossed that Danziger is right.
"We've shot more and more with jewelry," says Sally Singer, fashion news and features director at Vogue. "Jewelry can upgrade any outfit, and jewelry purchase values don't change as quickly as clothes, especially gold."
Other accessories—especially shoes and handbags—will continue to be big business for designers and retailers. Consumers might be skittish about investing in expensive, trendy apparel but will still give themselves a smaller designer fix with these products.
And designers—many of whom already make more money from accessories than ready-to-wear—will be looking for ways to further expand these lower-price-point lines of their brands.
2. Bon voyage, French couture; hello, Americana.
The disastrous state of the dollar abroad has made the importation of European collections prohibitively expensive in America, causing buyers to cut back on purchases from design houses overseas.