DALLAS, Jan 8, 2008 / FW/ — A slow economy, an impending slash on interest rates, tighter credits and a general downslide of the luxury market, will the coming Fall 2008 season become the acid test for New York designers?
During the Spring 2008 fashion season, the New York catwalks were filled with ‘very safe silhouettes’ as designers tried to balance between economic viability and creativity, a reaction to a wavering U.S. economy.
For Fall 2008, the situation has become gloomier with high gas prices, a decline in home values and a holiday selling season that is far from being stellar. Although the U.S. economy was far from being robust since the dot com bust, the luxury market has remained steadfast.
According to reports, for the last decade, the luxury category has grown anywhere from 20% – 32%. In the U.S. alone, luxury is a $400 billion market. Authorities estimated that it would grow at a rate of 15% a year and would become a $1 trillion market by 2010. Yet, as 2008 rolled around, luxury fashion items are finding its way in the discount rack.
Last Sunday, the Boston Herald reported that designer handbags are being sold at a discount at department stores in the Boston area. The Herald also added that industry analysts observed that after a few years of heady sales, the designer handbag business is crashing, because in addition to the overall slowdown in retailing, the designer handbag market is oversaturated.
The Chicago Tribune echoed what the Boston Herald said while accompanying it with a gloomy forecast. In the article ‘2008 may test retail market’ the Tribune surmised “that as economic factors affect the luxury shoppers who once propped up consumer spending, retailers react to the slowdown by slashing prices.”
The same article also quoted Unity Marketing’s findings that the average amount spent by affluent consumers on luxury dropped 21 percent, to $12,142 in the third quarter from an average of $15,283 in the second quarter, marking the steepest decline since the fourth quarter of 2004.
These are the economic conditions that are facing designers who will be unveiling their collections in New York during the first week of February. Though year after year, the collections has always been eye-catching, it will be interesting to see how the designers will react to ‘less spending’ of their core clients.
Still, we have to remember that this is New York we are talking about, a very dynamic city that adapts fast to the situation. And, in these uncertain times, it is best to end with a song that defines the spirit of New York –
I’ll make a brand new start of it
In old New York
If I can make it there
I’ll make it anywhere
It’s up to you, New York, New York.
Illustration by Julien Fournie