Fashion Industry is Hit Hard by the Economy

The Current Situation
We are currently in an economic crisis, but you don’t need me to tell you that. You have heard about the bailouts for the auto industry, banks, etc., but what we haven’t heard much about is how the economy is affecting the fashion industry.

The fashion industry is a $200 billion industry in the United States alone. New York City’s fashion industry alone, provides 175,000 jobs and $10 billion in total wages, according to Fast Money. So, while some may think banks and the auto industry are the only two huge industries struggling….think again. According to an article written by Eric Wilson, a fashion writer, for the New York Times.....

"On Tuesday, a group of designers, including Philip Crangi, Justin Giunta and Malia Mills, met with the Council of Fashion Designers of America to propose a “declaration of designers.” Stung by steep markdowns imposed by retailers, they are creating a white paper of sorts for dealing with the economic climate and a strength in numbers response to the stores."

Designers are beginning to worry about other less-known designers copying their ideas, so they could make money of the designs. The whole concept of selling the same item at a cheaper price than your competition is playing a role in the fashion industry today.

The concept has been prominent for a while, but with the economy the way it is, it is no surprise to see an item such as a fake ugg get sold at a higher rate than it would have before the economic crisis. People are even posting articles on the Internet about how you can spot fake uggs.

It makes a lot more sense for a consumer who is losing his or her job, but still wants to buy a boot that keeps your foot warm and looks good at the same time, to buy a knock-off of an item. It looks the exact same, but just doesn't have the label, so to many people, it makes sense to buy the item of the lesser value.

Here is a video that pokes a little fun at the bailout.

Stocks Dip
One indication of the economy faltering is the fall of the Stock Market. Stocks continue to drop as the economy hits every industry. Some of the main stores, such as Macy's and Nordstrom's provide a perfect case analysis of this economic situation.

Macy's is a store shopped at by people all over the world. If we look at its numbers over the past year, its high of $27.08 a share came on May 2, 2008, which was before the economic crisis really started to hit hard. Currently, it is at $13.23, which is significantly better than its low of $5.07 that occurred on Nov 20, 2008. These numbers show us that Macy's has indeed been hit hard by the "recession."

The second store to look at is Nordstrom's. It's high of $38.65 came on May 19,2008, while the low of $6.61 occurred on November 21, 2008. Once again, we see the month of May as a positive month for the economy, while November was a negative month. Currently, Nordstrom's is sitting at $22.50 which is significantly better than 45 days ago, when it was near $12.

These two stores prove that the economy has been hitting the fashion industry hard, but if the upward trend of the stocks are any indication, the industry might be on its way to recovering. I mean, we can only hope, right?

Italian Fashion Industry Bailout

The focus of the economic downfall has mostly been on the United States, but another country hit hard by the economy is Italy. The Italian fashion industry recently became upset when it saw the Italian government approve a stimulus package of about $2.54 billion to help the auto and domestic-appliance sectors. Seeing that the fashion industry was being ignored, Mario Boselli, Head of Italy's Chamber of Fashion, became irate. He said.....

“I can understand helping the automotive industry but wouldn’t fashion deserve the same, if not more, consideration than the furniture industry?”

The reason Boselli became so upset about the fashion industry not receiving any bailout money is because the fashion industry in Italy employs approximately 80,000 people and has 30,000 distribution companies.

The First Lady to Help the Fashion Industry?
The most popular man in the world is a man named Barack Obama. Yes, Barack Obama did become the first African American to be President of the United States, but he's not the Obama that the fashion industry is talking about.

Michelle Obama has become the most popular woman in the industry, ever since Obama became a serious contender for the presidency. Every fashion pundit analyzed her dress, makeup, hair, etc.

Now, you might be wondering how Michelle Obama relates to the fall of the fashion industry.....the answer is simple: she is a presence everywhere and can use clothes to transmit a message. One wouldn't expect the first lady to be wearing something from J.Crew, but she does. And every single time Mrs. Obama wears something, she can promote it to the rest of the United States.

Click here for a slideshow of Michelle Obama and models who wear her clothes

So, as simple as it may seem, one woman can wear American clothes to promote American fashion, and in turn, save the American fashion industry.




For more reading on the Fashion Industry and the economy:
Obama Style Watch
America Fashion Looks to Michelle Obama for Boost
NY Times Fashion
NYSE
Italian Style

Jane of Tarzana

THE STORE OPENS

Jane of Tarzana is a clothing store opened by Peggy Sella in September 2008. She opened the store in hopes of providing customers with a place to shop that has clothes that are not only trendy, but also can be bought at a cheaper price. Peggy talks about why she opened the store.



All the clothing at Jane is priced under $100. Here is a list of some of the items sold at Jane, with their prices, in addition to a slideshow of the items listed below.

• Colorful dresses $52
• White shorts $38
• Handbag with zebra stripes $78
• Green handbag $88
  
• Brown sandals $54
• T-Shirts $18
• Denim Jeans $54
• Strapless pink dress $68
• Bracelets $15
• Earrings $8-$28

Create a Free Slideshow

LOCATION OF THE STORE/CLIENTS AT JANE
The store is located in the city of Tarzana in the San Fernando Valley. The city is located near more wealthy cities such as Calabasas and Westlake, so the customers range from middle class to upper class. According to the 2000 census, white people consist of 79% of the population in Tarzana. The actual location of the store is in a shopping center approximately three blocks from the popular intersection of Reseda Blvd. and Ventura Blvd. There are a number of stores in the shopping center, including a sporting goods store, a sushi restaurant and a hair salon. Peggy talks about the customers who come to her store.



The actual address of the store is 18735 Ventura Blvd. Tarzana, CA. 91356. Here is a package about the store.



THE STORE'S SUCCESS
It is currently the end of April and the store is still doing well. I have been the store a few times and whenever I go in, there are a lot of people walking in and out of the store. In addition, I always seem to know someone when I walk in. This shows that the store is just one of those places you can go and see people you haven’t seen in a while. Peggy talks about why the response to the store has been “amazing.”