Fashion in the time of recession
Frugal is the new black during the Great Recession, and that trend has dealt a harsh blow to the fashion industry.
It is especially difficult for independent brands that may not have the profit margins or visibility to help them ride out the recession, but some have managed to stay afloat.
From the Los Angeles Times:
But here in L.A., many small, independent brands are surviving (though sometimes just) by staying nimble, scrapping luxury-era business plans and rethinking what their customer wants, when she wants it and what she's willing to spend for it.
Aside from downsizing and making sure retailers pay for merchandise, many are diverting from traditional methods of promoting and selling their lines:
[Designer Gregory] Parkinson has also become creative when it comes to promoting his line. For example, instead of selling his collection through a traditional showroom (which typically acts as a sales intermediary for brands), he has begun showing his line directly to retailers in Paris, sharing costs with five other L.A.-based designers because "we were all fed up with showrooms. We wanted to cut out the middleman, who is no longer relevant."
Luxury brands also felt the squeeze. The recession finally jolted many brands like La Perla and Marc Jacobs to sell their products on the egalitarian Internet.
The difficulty of making a flat screen feel luxurious is one reason some brands refrained from selling products online, but for the final holdouts, battles with department stores pushed them over the edge.
Department stores ordered too much inventory for 2009 and were left with piles of unsold clothes when consumer spending declined. The stores slashed prices -- meaning less revenue for the clothing makers, along with a potential image problem when a $500 shirt sold for $200.
But it all comes down to whether consumers feel like buying. Marketplace's Jeff Horwich reports that the recession may be rewiring our brains to reinforce frugal behavior. How will retailers counteract that?