New York Fashion Week is here again, only now the semiannual bacchanal of fantastic excess and hard-nosed haggling takes place amid a weakening economy and spreading insecurity. The fashion tribe has to be wondering: Will anyone buy our $10,000 dresses and $3,000 handbags?
For many of the designers and retailers who swarm Bryant Park during Fashion Week, the answer is chilling. Even Vogue, the bible of the spend-anything aesthetic, is bannering "Value-Conscious Chic, When to Spend, Where to Save" on the cover of its September issue.
"There are some people out there still buying clothes, but it's a smaller pool and there's more competition," says Araks Yeramyan, 34, who has been showing her ready-to-wear collection, Araks, at Fashion Week since 2006. "This is the first time where I'm really getting scared."
No wonder: Showing under the tents is hugely expensive.
"It's a fortune — $28,000 just for the tent!" exclaims Mara Hoffman, 31, best known for creating memorable frocks for Sex and the City. "It totals maybe $70,000 for everything — it's nuts."
Plus, sponsorships have dried up, Yeramyan reports; now the fashion companies have to pay for alcohol, catering, makeup and hair styling for the runway shows. "I can't have the same markup, because if we used the same price that we pay for some fabrics from Europe, customers would freak out," she says.
But few designers, established or up-and-coming, can afford to sit out Fashion Week. "It's an investment in brand awareness," says Hoffman. "It gets press, it reaches potential customers, it really helps your sales."
Fashion needs all the sales help it can get these days. "Buyers are definitely skittish and price-conscious," says designer Rebecca Taylor, 38, a 10-year veteran of Fashion Week. "People are not buying as many things as they once were, and what they're buying is versatility — like a T-shirt that is beaded so they can wear it with jeans or black pants."
Aware of their customers' anxieties, buyers for department stores will be looking to buy deep rather than wide, says Nicole Phelps, executive editor of Style.com, the online home of Vogue.
"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."
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."