The Party's Over
Fashion, it seems, has gone out of fashion. Companies are reporting record losses for the first half of 2009, several are filing bankruptcy -- the most high profile being the French couture house of Christian Lacroix, and fashion magazines are in a panic over the drop in ad page sales. So Diane von Furstenberg, the president of the Council of Fashion Designers of America, held a summit of sorts in New York last week with leaders of the industry, including Vogue editor Anna Wintour, to rethink Fashion Week, the semi-annual trade-show-like event to present new offerings and drum up hype. Instead, the meeting turned into a strategy session to figure out how to stop plummeting sales and profits during the current economic recession.
There were several conclusions. Von Furstenberg argued that the period between the fashion shows and when the clothes reach the stores was too long and wants to reform the show system. Fashion designer Donna Karan declared that the practice of early delivery to retailers was the problem. Who wants to by a bikini in March or a mink in July? As a result, Karan said, consumers wait until sales to shop, and companies and retailers lose the huge mark-up that equals bigger profits. Wintour suggested following the French model of having a government-fixed day when retailers can start price reductions, but this was quickly shot down as price-fixing and illegal in the United States. "Is that something we can change?" asked Wintour. "We have friends in the White House now!"
Finally, von Furstenberg addressed the elephant in the room: "Everyone had been too greedy," she said, "and everyone thought the party was forever."
Indeed, they were, and they did. During the 1990s, business executives, most with no previous experience in fashion, began to buy up small family businesses and turn them into corporate conglomerates. The executives saw the growth potential in the brands by targeting a new audience: the increasingly wealthy middle market consumer.
The executives "renovated" the houses by hiring media-hyped young designers, spent billions of dollars on deliberately shocking advertising campaigns, dressed celebrities -- some paying six-figure sums to the celebrities to wear the items, introduced fashionable lower-priced logo-covered accessories, rolled out thousands of stores that are as ubiquitous and approachable as Benetton or Gap, opened outlets to sell leftovers at bargain prices, launched e-commerce sites, and ramped up their share of duty-free retailing.
To raise the profit margins that much more, many of the companies quietly began to use lower quality and less costly materials and move their manufacturing to developing nations, where labor is vastly cheaper, and they switched from individual handcraftsmanship to more cost-effective assembly-line production. Most of those brands hid the fact that their products were no longer produced in Italy, France or Britain -- the only countries, executives insisted publicly, that has the "culture" to produce luxury handcraftsmanship. Simultaneously, the companies raised their prices exponentially: the average luxury brand handbag is marked up 10 to 12 times its production cost; clothing as much as 20 times, sometimes more.
Most importantly, they shifted the focus of the advertising from the product itself to the logo stamped on it, thus changing the reason consumers buy fashion, from what it is to what it represents. As a result, the luxury industry exploded -- it grew to a staggering $200 billion a year in sales -- and luxury fashion brand owners and shareholders have gotten staggeringly rich. In 2007, Bernard Arnault, head of Moët Hennessy Louis Vuitton-LVMH, a publicly traded group of more than 50 luxury brands, was named by Forbes to be the seventh richest man in the world.
That's all changed in the last six months. After nearly two decades of getting fleeced, the middle market consumer has wised up and stopped buying. In part, because the recession has curbed unnecessary spending, and consumers rightly see fashion -- particularly luxury fashion -- as ephemeral and unnecessary. But also, consumers have taken a good look at what they are getting -- massed produced clothes and accessories, often shoddily made, for thousands of dollars -- and realized that as the prices have increased, the quality has decreased. "It's junk," Tom Ford told me. "And it's getting junkier all the time."
Greed has killed the fashion industry, just like it killed the automobile industry, the banking industry, the music industry and all the others who are in a panic now and holding summits and asking their "friends in the White House" to fix their problems. When integrity becomes the leading principle in business again, only then will we be able to right our economy, and our lives.
Dana Thomas is the author of Deluxe: How Luxury Lost Its Luster, published by The Penguin Press.
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Donna Karan stuff has been crap for years! The first time I could afford to buy a Donna Karan suit and realized that the skirt was not only unlined but not cut straight, I vowed NEVER to waste my money on Donna Karan stuff.
Fashions have become unattractive and hard to wear in the last few years too.
Just look around at average people struggling to wear low cut skinny jeans and whorish lingerie tops.
Or those designer track suits with the rear ends stretched out and sprung.
It ain't pretty.
Tailoring has all but disappeared as well, probably to make clothes cheaper.
I don't think anyone looks very good anymore, it's a shame.
Ms. Thomas, I had read your book and I just want to tell you how much I enjoyed and learned from it. I've never been into fashion, but my mother, who was and still is a very stylish woman, always said it's possible to be fashionable without paying a lot of money for the "luxury" brands on the labels instead of the quality of the clothes.
Make good clothes at reasonable prices and people will buy. Seriously, when did 300 become a reasonable price for a dress or a shoe? Another thing I noticed is that some stores that are supposed to be less expensive have gotten a little crazy, if I wanted to spend100 on a dress, I wouldn't be at H&M.
I have always been astounded that Anna Wintour holds the position she does. The essence of being fashionable is NOT to let other people dictate what you wear! For the past several years, magazines like Vogue or InStyle have been 'uppricing' the clothing and accessories they feature, inserting the idea into young women's heads that yes, a $600 purse is totally reasonable, you NEED this article to start college in the fall. EVERYONE worth knowing wears $1000 heels - just ask Anna Wintour! If you are a movie star or an heiress and can drop that kind of money on this season's purple python bag, then go for it. But come on, people! Most american girls never COULD afford those things and they knew it and the fashion industry knew it too, but just kept on milking that well. And now it has run dry. I feel bad for the everyday employees in the garment district- the cutters and seamstresses, etc. who will be out of jobs because we are tightening our now- more-affordably-priced belts. But I have a lot of trouble summoning up any sympathy for Anna or Donna or Marc Jacobs or Nannette Laopore. They knew what they were doing all along- or they were so COMPLETELY out of touch with the mainstream american market that their ignorance has cost them dearly. At least Dianne von Furstenburg had the grace and the guts to say it out loud to her clueless colleagues.
I try very hard not to buy stuff made in third world countries, especially China. The very idea that, for example, a well-known purse manufacturer now has their purses made in China instead of the USA completely turned me off to the product. Why should I pay top dollar for a purse made by slave labor in China? The knock-offs are probably being made by the night shift. How do these manufacturers expect people in this country to buy these products when the jobs are all being exported? Made in China? No thanks!!
Fashion wasn't the only industry to over-reach, not by a long-shot, or a close-up, either.
I am past the point where trendy clothes mean much, always preferred well cut, quality classics anyway. Really don't see a point in flashing around a (prominently branded) designer handbag either, when it has all become about how much money was spent for it. If anyone can have one, where is the so-called status there? AND it might very well be a knockoff.
When fashion magazines entered the realm of science fiction I stopped buying them.
Tom Ford was so right to say, "it's junk, and it's getting junkier all the time."
Jeez it's just clothes. I guess it's too easy to hype them endlessly. I remember when there were no such thing as supermodels. With the internet and all customers realize how overpriced (and similar) big name designer brands are and they aren't necessarily 'all that'. Then reading the labels and seeing most of em are made offshore. Then there's all those stories about how designer garments are made in slave conditions sometimes using children as labor. You'd think by now the 'fashion industry' would get the message, but apparently it's taken till now.
I love being a guy. Pair of khaki trousers, short-sleeve pull-over shirt, Bass Weejuns / no socks and I'm ready for work or the golf course ... add a white belt and I'm a used car salesman. ;-D
".......When integrity becomes the leading principle in business again......."
Might as well say "when pigs fly!"
".......When integrity becomes the leading principle in business again......."
Perfect.
In the old days, there was an idea, a product, a community, a group of people working to produce a product that was respected and admired. Profit wasn't the end result and people comprised the entity.
Now, there is no value in the product beyond the profit margin and there is no loyalty to the company and the company declares they will not offer ANY loyalty to the employee and that profits are the only item of value.
All of it will be temporary. Not meant to last. As is our lives in the America we once knew. Just a fading memory of legends of art and fashion replaced by crap but hyped like it's quality.
Integrity ? Integrity was murdered by greed. Greed is a murderer.
Thanks, Dana, for an expert's take.
My take:
Too many designers; too many young designers whose experience has yet to catch up with the hype; too many designers too into themselves; too many fashion houses; too many outlets; tween and early twenties something saturated market; cheap, poorly made clothes at outrageous markups.
Not least -- so a separate line -- tween and early twenties sales associates with no fashion background or training or any idea how to relate to the customers who are old enough to have the money to spend.
The high-end and designer stores in my area used to have incredible high-end clothes; now they have high-end price tags on cheap, poorly constructed seasonal offerings. An insult. Bottom line. You are right. Greed. Pure and simple.
And, oh yes, the fashion magazines? A reflection of the industry. I can't believe Anna Wintour's comments. How did someone who makes such naive comments end up as an editor of one of the top fashion magazines? Editors need to relate as well -- not be too into themselves.
An intelligent editor could play a huge role in leading the industry back to fashion.
part 2
Also, handmade, homemade and revamped is quite the rage with the younger set. My daughter, a teen fashionista, actually picked out some fabric for me to make her a bookbag for school, shops Value Village for her jeans, wears Threadless Tees, and buys vintage belts off ebay. She thinks she is the cat pajamas, and so do I. Not one clothing purchase, for this, her senior year in highschool will be made at the mall. My point being that in my day, second hand and home made would have made me want to crawl under my bed, now my daughter and her friends think it is all the rage. This is a result, in my opinion of the mass market in fashion that is just much too much, and the over saturation of cheaply made clothes, My daughter and her friends often joke about not wanting to wear or look like anyone who wears "clothes made by slave children in China".
But it seems that your daughter and her friends are also cognizant of the fact that so much of the crap in the stores is made by low-paid children in China, which is a good thing. I rarely find anything to wear anymore made in the USA.
There is a lot going on right to cause the decline. First of all, the we are in a period of extremely uninspiring fashion. Maxi dresses? Are you kidding me? Flattering to no one over size 6 and 22 years of age. Baby doll and empire have been done to death. Leggings? Again? And who wheres those high heels I see in the stores and the magazines. Take a look at women on the streets of most major cities, you won't see a lot of towering heels, I promise you. How many "name" ultra expensive handbags does one really need anyway? And boho? Personally, I love it, but I am way way to old to base my wardrobe on it.
Secondly, with blogs taking over the territory of fashion mags, change now seems to really come from the ground up, with no need to get Anna W's approval. (note: I like Anna Wintour and Vogue). It is now acceptable and I mean really acceptable to wear thrift shop and consignment wear (just call it vintage). Also there is nothing in the shops that you can't find cheaper at anyone of the million places to discount shop, online or otherwise.
Comment to long, part 2 coming
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