Monday, while share holders were panicking and downsizing quicker than you can say “NYC Fashion Week”, Wall Street (clad in Hugo Boss suits and Lanvin pant-suits, I would imagine) held their breathe as the market plummeted record lows since November 2008. If you watched CNNmoney.com as I was, you saw the Dow drop 650 points (eek!) as a result to the US losing its “AAA” credit rating. [For those who don’t know: Similar to a school’s grading system, the US no longer has an “A+” grade for repaying debts. But fear not! We still have a AA+].
Now, as my business-wise younger brother says: Market crashes are social phenomenon’s. Stocks are not based on a company’s value, but are worth the investors perceived value. And well, Aaron, I agree with you! Collectively we have created this problem. The market crashing is a result of a group pulling their investments, which makes their neighbors panic and do the same, and then their neighbors panic… and well you get it. After these bad moves, people begin to panic even more about not having money and refuse to spend it. Here in lies the problem: decline of economic activity leads to a recession! Merde!
With all this happening, some fashionistas might ask how this is going to affect them. Well for one, you may panic and curse those sparkly Miu Miu’s you just bought on credit. But for another, luxury firms are having an increasingly hard time marketing their products in a down economy. To promote revenue, brands will start with sales. Longer, bigger, and better! So my recessionistas, take advantage! Neiman Markus, Barney’s, and other great department stores are having more and more sales with great things at marked down prices. During the debt crisis debate, Zara had a massive sale, with nearly everything online for more than 40% off!
Because the value of the dollar has diminished so greatly compared to other currencies, European and foreign importation is extremely expensive and harder to afford. Many small boutiques and even large scale one’s have refrained from going abroad for new collections. According to an article in 2008, the Shopbop.com’s head buyer of designer collections cut Parisian designers from her list all together. And while you may feel empty without Paris’ newest and latest, doors are opening for up and coming American designers. And for the lucky few who can afford, the classic powerhouses like Missoni and DVF who have established themselves as heavy weights will prevail through recessions. For these houses it is not about pleasing the masses, but for their specific high end niche, willing to pay their prices.
And although many people are tentative to invest right now, your wardrobe may be something worth investing in. The price of gold is the most expensive it has ever been ($1,700 an ounce) and if you have it, you maybe holding on to some valuable pieces. Now is the best time to sell your gold pieces to those looking to invest in the precious metal. And remember that beautiful vintage Chanel bag you own? If you’re looking to get out of some hard times (and are willing to part with your bags) this is your ticket. Vintage designer and luxury goods are in high demand and those willing to pay, will pay! As strange as it seems, vintage or “discontinued” fine jewelry, handbags, and, even shoes can obtain a higher value than once paid. Their timelessness, rarity, and excellent quality will determine its value, and make excellent investment pieces. The best way to check this, is to take it to the designer’s retail store and get a quote. Stores like Louis Vuitton and Tiffany’s can examine your pieces for quality and value in the store.
Another good way to invest in your closet is to chose quality rather than quantity. Spending a little bit more on a quality piece that is versatile, yet stands the test of time will save you money over time. Rather than swiping your credit card four times a month at the $5 dollar bin, a few key and quality (but not necessarily designer) outfits every season can end up saving you hundreds (maybe even thousands?) of dollars a year! Now doesn’t that sound nice?
Lucky for the economy, the Dow went up a drastic 400 points Tuesday, helping to fix Monday’s rapid loss. You can always work a fluctuating economy to your favor, through capitalizing on sales or waiting until market prices for gold and silver reach profitable highs, among others. And another great thing to keep in mind before I sign off: economic activity (aka SHOPPING) puts money into the system promoting confidence among firms! Confidence=success in the business world, just as it does in fashion.
Happy Shopping! xoxo