The Midas Touch? Michelle Obama's Fashion Choices Move Markets
First lady's fashion selections affect retailers, stock market.
Nov. 8, 2010 — -- First lady Michelle Obama is hailed as one of the world's best-dressed women. From couture creations to off-the-rack ensembles, the clothes she wears fly off the shelves.
The designers whose creations are picked by the first lady not only experience a surge in popularity, but, according to the results of a study published in the November issue of the Harvard Business Review, their stocks can get a significant boost.
The study's author, David Yermack, professor of finance and business at New York University's Leonard N. Stern School of Business, performed a year-long analysis of the economic impact of Obama's apparel selections.
He found that her choices had a major influence on clothing markets.
"Each single appearance of hers could move a stock price by $14 million," Yermack told "Good Morning America."
According to Yermack's results, Obama made 189 public appearances between November 2008 and December 2009. During that time, she wore items from 29 publicly traded companies, including J.Crew, the Gap, Saks Fifth Avenue and Target.
Those companies raked in an estimated $2.7 billion as a result of Obama's donning their apparel, Yermack calculated.
J.Crew has been one of the biggest beneficiaries of the first lady's sartorial selections. Obama has sported outfits from the popular mall chain on several high-profile occasions.
The day after she appeared on "The Tonight Show with Jay Leno" dressed in a canary yellow outfit from J.Crew, traffic on the chain's website soared 64 percent. When she showed up at a cancer center in London dressed in a cream, hand-beaded cardigan and pencil skirt from J.Crew, the outfit sold out within hours.
Talbots, a brand struggling to change its frumpy image, also got a bottom line boost when Obama wore its $169-dollar dress for a photo on the cover of Essence magazine last year.
It's not just a specific label that can stand to gain. Stores that carry the first lady's favored brands -- such as Saks Fifth Avenue – also appear to benefit in the long run, Yermack found.
