As the big three U.S. automakers await to hear their fate on a requested bailout from the U.S. government and Citigroup teeters on the verge of bankruptcy, it now seems that the fall of Lehman Brothers, Bear Stearns and other corporate casualities was just the beginning of what is likely to be a global economic meltdown of epic proportions.

With this as the backdrop, a reader recently wrote in to ask about the prospects for aspiring job seekers in the fashion industry more generally. Others have been wondering how some of the emerging businesses that have come to the fore in recent years are faring.

The short answer to both questions is that things are extremely tough out there, but there is always opportunity for innovators.

Even in the best of times, starting a fashion business is a risky proposition, with failure rates well above 90%. Add in the challenging mix of a tough credit environment, plummeting consumer confidence, rising unemployment and a general cloud of uncertainty, and the prospects for running a fashion business begin to look decidedly gloomy.

It is not only small retail and fashion businesses that are suffering. Even some of the big boys have seen tough times in recent months. One need only note that Neiman Marcus’ revenues fell 27.6% in October 2008 versus the same month last year.

But this too has had a follow-on impact on small design businesses, who lack their own retail distribution and therefore rely on department stores and specialty boutiques to get their products to market. Most emerging fashion businesses are only just beginning to feel the impact of the downturn now as department stores have been cutting back orders for Spring/Summer 2009, and cutting out some brands altogether.

As for fashion industry jobs, many companies have instituted strict hiring freezes across the board. At Condenast, news of an across-the-board 5% cut of all magazine staff has been leaking onto the Internet. This is in addition to a 5% budget cut and the compression of several titles including Men’s Vogue. Many European luxury brands have also got hiring freezes in place.

However, all is not lost. Even in times of economic crisis (or perhaps, especially in times of economic crisis) true innovators who deliver exceptional value will be rewarded. A buying director of an internationally-recognised fashion retailer told me that the companies that are suffering the most are the ones that don’t have a unique point of view. She pointed to many of the L.A.-based contemporary brands whose products are interchangeable, except for their brand labels.

On the other hand, she said that design-led businesses offering competitive price points, like Camilla Skovgaard and 3.1 Phillip Lim, continue to perform. It’s not a coincidence that both of these brands produce their product in China to achieve the quality/price relationship that consumers are increasingly expecting.

On the high-street, there are successful innovators too. American Apparel (leaving CEO Dov Charney’s dodgy tactics and questionable personal behavour aside) continues to experience soaring retail sales because of its unique positioning and easy-to-manage product assortment that has struck a chord with aspiring hipsters around the globe.

In the fashion job market, digital media experts who understand the fashion world are being hired by major brands and retailers that are finally looking to the Internet seriously as a distribution channel.  The Internet, by several accounts, is continuing to provide growing revenue streams in the luxury and fashion space. And, as advertising budgets are cut back, its wide-reach at relatively lower costs than say, a page in American Vogue, means more investments may be made in company websites and cost-effective online marketing initiatives.

Perhaps the one positive thing about recessionary periods is that they do foster innovation and creativity, as opposed to allowing people to rest on their laurels or ride others’ coat tails. This video runway show from Jean Charles de Castelbajac, in cooperation with Lego, for example, has become an Internet hit. Incidentally, his business was just saved from bankruptcy by Atlas Design Group last week.

Yesterday at Phillip Lim I heard a videographer complaining "There’s no one here, and whenever someone does show up, they bring them out at the last minute so I can’t shoot them."

Many fashion brands may have been built on the dreams created by out-of-this world haute couture collections, but today, for many brands, this desire is built on the image of celebrity, which can arguably reach more people than the Haute Couture shows ever will. Celebrity is the new Haute Couture. Or, better said, celebrity now plays the dream-weaving and marketing role that Haute Couture has played in the past.

However, in a week when the front rows were supposed to be dripping with celebrities, the paparazzi at New York’s fashion shows were left wanting. Yes, pop star Rihanna made several appearances, as did Angie Harmon, but it seemed the biggest A-list stars had given New York Fashion Week a wide berth.

Until yesterday.

Red carpet darlings Keren Craig and Georgina Chapman of Marchesa scooped the surprise celebrity appearance of the week when a very pregnant J. Lo arrived at the brand’s tableau presentation for Autumn/Winter 2008.

In recent years, Marchesa has become a household name that has graced the same pages as Dior and Valentino, leveraging a media industry that has been built around celebrity fashion. The upstart brand was first propelled to fashion nirvana when Rinee Zellwegger appeared in a Marchesa dress for the premiere of Bridget Jones in London, and since then has regularly dressed major stars for awards shows, film premieres and star-studded events around the world.

We had already left by the time Jennifer Lopez arrived at Marchesa, but Style.com reports that a huge media horde had gathered to mark the occasion as she made her way into the Chelsea Art Museum.  The designers’ hearts must have leapt with joy. They had now managed to make up for some of the missed opportunity to beam images of their red carpet dresses around the world when the Golden Globes were canceled in January. The ongoing Hollywood writers’ strike has brought awards season, the stars’ and Marchesa’s normal stomping grounds, to a virtual halt.

Later on Thursday evening, Gucci threw a party to celebrate the opening of its New York store, with Madonna as their guest of honour and a huge supporting contingent of the Hollywood and fashion A-list. The stars finally came out of hiding.

But for those not interested celebrity sartoria, you’ll be glad to know that Marchesa was well worth the trip to the Western fringes of Manhattan for the collection alone. It was impeccably executed and the standout look was the delicate armour of a black dress that was perplexing and alluring at the same time, as in, how did they manage to construct that?

The model wearing the dress, one Georgina Stojilkovic, must have read my mind because she asked if I wanted to touch the dress. I managed to resist the urge to do just that as my mind wandered to other questions, like who would be the lucky celebrity to wear this look? And, who would be able to pull it off?

© 2008 Copyright Imran Amed – The Business of Fashion

In the heart of New York’s garment district in the same building on 39th Street, two of the city’s most exciting young talents have been busy putting together the collections that they unveiled on Sunday. And, what a great showing for both Peter Som and Phillip Lim, who both delivered what their many fans were expecting…and more.

Peter, of course, has just sold a significant stake of his business to retail private equity house NRDC and has been confirmed as creative director of his alma mater house Bill Blass.

This was his finest collection yet and one of the strongest of the entire New York collections, having perfected that fine balance for his clients who move fluidly from uptown socialite events in the day to downtown parties at night. Tinsley Mortimer, the socialite of young socialites, was sitting right in front of me and was explaining to the media hordes why she integrates Peter Som into her wardrobe. He’s got his finger on the pulse of what these young women want and it was clear from all the excited whispering in the front row that this collection is going to sell like hotcakes.
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For his part, Phillip turned out a bold collection in a stunning setting at the New York Public Library, complete with a circular catwalk. The collection had a decidedly more edgy feel, appealing to the ‘classics with a twist’ style that his (male and female) followers love. Irina Lazareanu opened the show with a classic khaki trenchcoat paired with a new shape for shorts. Classic men’s coats came down (or rather, around) the runway in primary colours of red and yellow in shorter cuts. Also on show were Phillip’s collaboration with  Birkenstock, where he has taken a staple of granola style and made it urban and sophisticated.

Peter Som – Spring/Summer 2008

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