Fashion Industry 2009
America’s economic downturn has had an undeniable impact upon the fashion world: not only are consumers buying less, they are also shifting their fashion allegiances to less pricy brands, and buying more clothes from discount merchandisers than department stores and boutiques. Consumers that once patronized Macys are now favoring Target: significantly, Macy’s Inc. has had to “eliminate 7,000 jobs, almost 4% of its workforce, and cut capital spending, reduce its contributions to its employees’ retirement funds and slash its dividend to preserve cash amid a severe pullback in consumer spending,” while the luxury store Neiman Marcus has cut about 375 jobs, or 3% of its workforce (“Macy’s slashing up to 7,000 jobs,” AP, 2009). When consumers cut back, especially given their former retail buying binge, they are more apt to scrimp on clothing, viewing it as a luxury item than utility bills. They reach into their closets rather than into their wallets. When they do buy clothes, such as school clothing for a growing child, they are more apt to go to Wal-Mart where temptations are less obvious than to the shopping mall: the second-largest owner of shopping malls in the nation, General Growth Properties Inc. filed for Chapter 11 bankruptcy in April (“Mall giant files for bankruptcy protection,” AP, 2009).
True, fascination with style remains. Of particular note is the new focus on the First Lady’s favorite brands, the middlebrow J. Crew, for example. J. Crew’s focus on clean, classic lines that can last forever has been one of the few success strategies in the new emphasis on low, low pricing. Even before the Obamas wore J. Crew to their inauguration, “Compared with most retailers, the company has stayed strong since the economic downturn began,” although its sales have dipped 6% — still better than the industry average (Gregory 2009).
But, not all brands have heard the call to slash prices. Retailer Abercrombie & Fitch, a ‘high end’ mall store, has bucked the trends of American Eagle and the Gap, stressing that cutting prices could cheapen its luxury brand image (McDevitt 2009). Yet most industry forecasters doubt that the impact of the recession will end anytime soon — most predict that things will not rebound until at least 2011. And even then, formerly carefree consumers may think twice before slapping down a piece of plastic for a $58 scarf at A&F.
Gregory, Sean. “Will Sasha and Malia Give J. Crew a lift?” Time Magazine. January 21, 2009.
“Macy’s slashing up to 7,000 jobs.” The Associated Press. MSNBC. February 2, 2009.
May 3, 2009. http://www.msnbc.msn.com/id/28979842/
“Mall giant files for bankruptcy protection.” The Associated Press. MSNBC. April 11, 2009.
May 3, 2009. http://www.msnbc.msn.com/id/30241564/
McDevitt, Caitlin. “How Abercrombie & Fitch is losing its cool.”
MSNBC. April 11, 2009. http://www.msnbc.msn.com/id/30155521/
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