Odi et Amo: The Fashion Bubble has Burst!

Wednesday, January 14, 2009

The Fashion Bubble has Burst!

There's been much ado in the press the last few weeks about the impending collapse of the retail business -- particularly the luxury retail business. Stores like Neiman Marcus are laying off hundreds of employees and Searle is the first (and probably not the last) of luxury retailers to file bankruptcy. Designers are suffering as well as Bill Blass filed for bankruptcy last week (after a buy-out) and Chanel laid off hundreds of its part-time workers. While I bemoan the loss of yet more jobs, I am inclined to say "let them die". Many retailers cite weak holiday sales on top of an already depressed 2008 and/or the credit crunch as reasons for their recent woes. I have another theory: The fashion bubble has burst -- People are no longer willing to spend gobs of cash on outrageous, impractical and even outright ugly clothing. And the sad part? Retailers don't seem to have gotten that message yet. Sure, they've cut (labor) costs, but they don't appear to be adjusting the merchandise at all. Faced with abysmal year-end numbers and a recent reduction in work force, Neiman Marcus appears unrepentant. They continue to peddle clothing that costs the equivalent of the average American's monthly salary. And quite frankly, I'm not sure you'd be getting that much for the money. I'm all for "high fashion", but in a world where Sex & The City is starting to look like an overindulgent (and quite possibly reckless) fantasy, what are you telling potential customers when your new arrivals for Spring 2009 are still horrifically overpriced and either (a) completely ridiculous, (b) completely impractical or (c) boring? What it's telling me is that NM is out of touch. And in this market, out of touch is tantamount to out of business.

Here are a few examples.

Exhibit A: Ridiculous

Dolce, dolce, dolce! To me this is so 2004. I see Carrie Bradshaw romping (pun intended) down the street in this get up with some giant woven hat. And we all would've seen her in it and laughed and thought to ourselves "oh, Pat Fields...you crazy kook". But to market this today -- at a pricetag of $3095 -- is a bit offensive. Even if you don't have a complete revulsion to "rompers" on adult women as I do, isn't 3 grand a smidge ridiculous to spend on one outfit? And this is hardly the LBD you can "wear everywhere".

Exhibit B: Impractical

I think I get where Stella McCartney was going on this dress, but I think she didn't quite have enough material to get there. The top looks like it could use a good yank upward to avoid the dreaded saggy-boob look and yet I fear any adjustment would result in some indecent exposure. As it is, you can't sit down in it. I'm pretty sure only the likes of Gwyneth Paltrow can pull this off (and she barely did anyway). Once you mention the $2595 pricetag, I'm beginning to question Stella and NM's sanity. Who's the target audience? Recession-proof exhibitionists?

Exhibit C: Boring

Sure, this is nice -- but it's so, so simple. These pieces could be easily found at a fraction of the cost at H&M, the Gap, J.Crew, etc. Sure, they might not be as impeccably made, but should quality construction really run you $205 for a white tee shirt, $3530 for a white leather jacket, and $605 for white jeans? For those with an aversion to arithmetic, that means the total cost of this outfit is $4340 (before any applicable sales tax). That's completely insane. It's tantamount to burning money.

So I say, let the market run it's course. Retailers who can't catch on to the growing demand for attractive clothing at reasonable prices should go the way of the dodo bird.

From the International Herald Tribune (emphasis added):

Rather than trying to keep the machine running by pumping out high-price hand bags, watches and other goods, he [Alain Nemarq, the chairman of Mauboussin, the prestige jewelry firm] proposed the unthinkable: the entire luxury industry should slash prices. "We need a return to reason, decency, discretion, beauty and creativity — in other words, to true values," Némarq said. (Mauboussin has lead by example. It has sold its one-carat diamond solitaire "Chance of Love" ring for about $14,500, roughly a third less than its normal price, and its lower-end 0.15-carat diamond ring was priced at $895, Némarq said.)

For the sake of their employees, I hope that other luxury retailers follow suite and listen to Nemarq's sage advice. If not, then I suppose we'll be in for a lot of great going-out-of-business sales.