Two weeks before U.S. Thanksgiving on a sunny
Saturday afternoon, a typical young professional Manhattanite cruised the Fifth
Avenue shopping strip of iconic U.S. department stores and international
designer brands. Her self-consciously casual outfit betrayed her as a fashion
magazine demographic bull's-eye: Chloé sunglasses, a fur-collared Theory
Sweater coat, New Balance sneakers with jeans and a Gucci logo tote. She worked
her way up the avenue, stopping in and taking a thorough tour of the plush
chrome and glass floors of Gucci, Louis Vuitton, sweeping back out empty-handed.
She crossed the street to Henri Bendel, where she finally purchased some
cosmetics at the Stila counter.
If in New York, the capital of conspicuous
consumption, the lipstick index holds true -- i.e. that, as Estée Lauder
research has sought to show, sales of lipstick are a sign of a recession with
women avoiding more expensive items -- then the fashion world is in the process
of being humbled. A Canadian who has visited the city on Thanksgiving weekend
for the last half-dozen years found evidence contradicting favourable reports
about retail for Black Friday weekend, so named because with November and
December often accounting for 40% of the year's sales, it's the point in the
calendar when stores finally make it into the black. The visitor said he had
become accustomed to seeing two lanes of Fifth Avenue blocked off to accommodate
the overflow of pedestrian traffic on the busiest shopping day of the year. This
year sales people bleated, "Things are better now that you're here."
Downtown, a leather boutique in SoHo, the
shopping area hardest hit by its proximity to the World Trade Center, had
spelled out on its window a pitch for comfort clothing at a discount:
"Nervous? Cold November? Remember December: Safety in Shearling Sale 30%
off." Unfortunately the unseasonably warm weather would prove to compound
already bleak results, particularly in New York.
In the year-end round-up, sales figures, not
fashion's arbiters, will tell the ruthless truth about what's in and what's out.
The new year will bring business casualties on golden miles everywhere. Canadian
retailers were told by their designer suppliers that business was down 50%
during fashion week in Milan, where spring orders were made. High-end emporiums
such as Bergdorf Goodman cancelled all remaining orders immediately after the
Sept. 11 attacks. With such retailers doubling orders from specialty niche
designers producing expensive garments from far-flung corners such as Ireland,
and then cancelling them, the impact is widespread and imperceptible until it
becomes cumulative, like trees falling in a forest.
Bergdorf Goodman was the first big-name store
to go on sale in New York, an across-the-board frenzy in late October,
unprecedented in mid-season. Its parent company, Neiman Marcus Group, whose
array of luxury goods in their mail-order catalogues have included a submarine
in the recent past, reported a 54% plunge in profits for the quarter ended Oct.
27.
With stores offering deep markdowns to lure
shoppers, reports of an increase in sales are misleading.
Gucci, which derived almost a quarter of
sales from the United States before Sept. 11, laid off 130 employees at its U.S.
operations, about 14% of its work force there, which does not include cuts that
have taken place to sales staff at its stores. For the third quarter, Gucci
Group net profit was more than halved from the previous year to US$56.2-million.
Meanwhile, LVMH Moet Hennessy Louis Vuitton, which owns a significant number of
designer labels including Christian Dior and Givenchy, have issued a string of
profit warnings in recent months.
Prada also embarked on an acquisition spree
that propelled it to luxury-goods-conglomerate status in only three years. It
recently completed the sale of its quarter stake in the Italian baguette and fur
house Fendi to LVMH, as its debt had swelled to US$1.1-billion. The company
expects its 2001 sales to be flat against last year's, when it generated sales
of US$1.39-billion.
Tom Ford, the marketing and design guru of
Gucci and Yves Saint Laurent, told a recent fashion industry conference in Paris
that he doesn't know the future holds. People will either turn away from excess
and flamboyance and logos or, conversely, "an exuberance" may emerge.
For the moment he foresees a kinder, gentler fashion, a continuation of the
anti-globalization sentiment and a return of the personal. The representative
from LVMH saw "the quest for pleasure as absolutely natural to humanity.
Vanity and narcissism are great assets to the fashion industry," he said.
"Luxury is part of us and is a necessity." For the shrinking few who
can continue to afford it. - by Serena
French National
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