Fashion Week Meets the Weak Economy

"Retailers will be looking for young designers, where they can make discoveries and buy clothes more affordable to the shoppers," says Phelps. "Shoppers are going to want investment pieces built to last — really, really signature and stand-out pieces, rather than a wide variety of pieces by many designers."

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Cindi Leive, editor of Glamour, predicts that heavily beaded-and-sequined "Dynasty-inspired looks" are over. "There's been a turn away from the extreme, in-your-face over-opulence, when the whole point of an outfit was to say 'I've got more money than you can shake a stick at,' " says Leive. Once, the fashion industry cared mostly about the ultra-rich, the people with incomes in the millions who are largely unaffected by a sputtering economy. But now fashion appeals to a mass market — people with incomes way south of millions who become more resistant to buying when the economy goes south.

Pam Danzinger, CEO of Unity Marketing, which tracks luxury consumers, regularly surveys people with incomes of $100,000, and since last year there has been a sharp drop in confidence and the average amount spent.

"They're spending less because they don't feel as confident," she says. "In marketing, perception is reality. These people could buy a $3,000 handbag, but they're resistant to spending so much because they don't feel as flush as a year ago."

The established super-high-end fashion houses, such as Chanel or Louis Vuitton, have deep-enough pockets to survive and maybe even pick up market share, says Milton Pedraza, CEO of the Luxury Institute marketing research firm. "The young designers trying to swim upstream in a competitive marketplace, they're doing Fashion Week with Scotch tape and glue."

Paradoxically, despite the economy, Fashion Week is bigger than ever, and fashion editors, both print and online, are preparing to cover more collections and designers than ever before.

"Fashion shows have become a huge marketing tool, so (designers) can't really cut back on that," says Patrick McCarthy, editorial director W and Women's Wear Daily. "It looks like there will be at least as many shows this season as last year and maybe even a few more."