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Fashion Designers On Pins & Needles
In the Downturn, Old Patterns Don't Fit

By Robin Givhan
Washington Post Staff Writer
Wednesday, September 9, 2009

The fashion industry is in crisis -- both financial and existential. Over the summer, designers and retailers gathered in New York for a come-to-Jesus, group therapy session in preparation for the upcoming spring runway shows, which begin Thursday. Industry veterans such as Diane von Furstenberg and fledgling entrepreneurs such as Chris Benz detailed their individual business needs, lamented the dispiriting recession, grappled with shifting consumer priorities and searched for relevance in a culture that has been forced to reassess its outlandish spending habits and addiction to high-priced status symbols.

"It reminded me of when I was at Parsons and September 11th happened and everyone was questioning their career paths," says Benz, 26, who's defying the philosophy that outsourcing is unavoidable. "Everyone in fashion was reminding themselves that it's an important industry; it employs so many people. It was nice to get everyone in one room. Fashion is super-competitive and it's nice to hear that everyone is going through the same process; it's the same emotions."

The soul-searching and hand-wringing that July day at the Fashion Institute of Technology were both urgent and prolonged because the current challenges facing the industry are so overwhelming and the stakes couldn't be higher. In New York (and then in London, Milan and Paris) designers and retailers will place bets on what consumers will want to buy six months from now -- Michelle Obama sheaths? 1980s harem pants? Something else entirely? -- and at what cost. A single bad decision could mean bankruptcy.

To improve their chances in the spring of selling the next new thing, the industry is doing everything it can right now to prep and thrill consumers, drive them into stores and persuade them to pry open their wallets and buy fall merchandise . . . at full price. To that end, New York's week of large-scale runway shows and modest presentations begins Thursday with Fashion's Night Out, an extravaganza of consumerism, philanthropy and showmanship that reaches into all five boroughs and beyond. It was the brainchild of Vogue editor Anna Wintour. To get the shopping started, she and designer Michael Kors will travel to Macy's in Queens -- thus appealing to everyone from Bergdorf blondes to outer-borough value-hunters -- to greet customers and autograph T-shirts created for the event. Stores will remain open until 11 p.m.; designers will sing, dance and schmooze; bands will play; drinks will be served. And, Seventh Avenue hopes, shopping will ensue.

"Anything the industry can do to draw excitement in stores is a real plus," says Michael Gould, chief executive of Bloomingdale's, which is one of the more than 700 hundred retailers that will be keeping late hours.

Similar events will take place around the globe in cities where Vogue publishes -- from France to Brazil. And here in Washington, stores on 14th and U streets NW, such as Muléh, Lettie Gooch and Redeem, will host special events and stay open until 11 p.m. or later in hopes of enticing customers to buy, buy, buy.

The industry cheerleading and introspection continues through the month. Beginning Sept. 17 at Tysons Galleria, local retailers will put fall 2009 collections on the runway. The three-day event, called All Access: Fashion, includes a by-invitation panel discussion about the future of luxury fashion and an appearance by "Project Runway's" Tim Gunn. All Access: Fashion was created by Washington marketing and public relations executive Aba Kwawu to promote her roster of fashion clients, all of whom are struggling to answer a few fundamental questions: "What do we do now, post-recession, when everyone is struggling to reinvent the dream? What do we do to get consumers excited to shop and to shop in season," instead of waiting for sales?

"We were spending based on perceived wealth and that's gone," Kwawu says. "Our values have changed."

Neither one night of cocktail parties and gifts-with-purchase nor one weekend of fashion shows and navel-gazing can fix all that is wrong with the fashion business. Retailers and designers know this. "Because the industry is so big, you can't change it all," says von Furstenberg, queen of the wrap dress and president of the Council of Fashion Designers of America. "But what you can do is to try and promote it and make it exciting."

The industry brought much of this crisis on itself by operating on a business model that became entrenched during the 1980s and '90s. During that period, personal savings steadily declined. Consumers were socking away less and less of their disposable income, as the "wealth effect" -- the overconfidence of rising affluence, based on capital gains and inflated home prices -- grew. But fashion's spendthrift heyday was an anomaly. There is no other period during which an economic trend has continued for so long, according to data from the Bureau of Economic Analysis.

The '80s were the era of conspicuous consumption: big shoulders, big hair, big Christian Lacroix poufs. The '90s saw the rise of status logos from brands such as Gucci and Prada. Luxury conglomerates grew bloated and every independent designer believed he could transform his name into a lifestyle megabrand. Design houses suckered consumers into buying $1,000 disposable handbags -- trendy satchels meant to be tossed away or tucked into one's California Closet -- at the end of a season. Venture capitalists threw money at designers with more personality than business sense. Retailers stuffed their shelves with merchandise that looked just like the merchandise overflowing the racks of the retailer down the street. And when it didn't sell in five minutes, they marked it down. Fashion became a business focused on entertainment, stock options, smoke and mirrors.

How did the fashion industry spiral so far away from its fundamental job of creating desirable clothes for folks to wear? It's simple, says von Furstenberg, who has also become the industry's unofficial shrink.

"You get carried away with your own" B.S., as she bluntly puts it.

In a Lather

The fashion industry is now in the midst of its own extreme makeover. Younger designers are taking the lead in finding new ways of doing business that can sustain the dream.

Juan Carlos Obando is relying on shampoo.

Obando is a Los Angeles-based, self-taught designer who learned his craft by deconstructing exemplary frocks by Azzedine Alaia and Chanel that he purchased at Decades, a vintage couture boutique in Los Angeles that supplies red-carpet dresses to the boldface crowd. Obando came to the fashion industry by way of advertising, where he developed a reputation as "the car guy," with campaigns for companies such as Toyota. He launched his collection four years ago, and on Fashion's Night Out, he will be giving salsa lessons at Barneys New York.

Obando's work is not based on trends but rather his own quirky, somewhat indulgent sensibility. For his fall collection, for instance, he created airbrushed white chiffon dresses that were hand-pleated and steamed, creating the illusion of a finely etched shell. It took three days to pin the fabric into place and four days to sew it. Obando has managed to cut the production time from a week to three days, and the dresses are priced at $9,000. "I refused to let these dresses go above $10,000," Obando says with obvious pride, for merely staying within a budget that's comparable to the gross national income per capita in quite a few countries.

Obando, 32, is a tall man with a charming manner, a medium build and dark hair that spreads across his head like a lush thatch roof. His laugh is more like a giggle, and that, along with his ability to describe a suit that sells for $1,500 as being at entry-level pricing, belies the fact that he is a savvy and serious businessman.

The designer works out of a 2,100-square-foot former soap factory in Silver Lake. He has four retail accounts and one of them is Barneys, to whom he delivered 21 pieces for fall. He has five employees, and everyone gets paid. (Small design houses often survive on the kind of free labor that would make the Teamsters riot.)

The clothing line, Obando says, "is 100 percent financed by hair care." Consumers, it seems, are more inclined to buy fancy shampoo for their tresses than fancy frocks for a night out.

Obando launched Number 4 hair care during his spring '09 show. Other designers have to go hat-in-hand to the likes of Redken or Aveda to get backing for a show. Obando is his own sponsor.

"I built Number 4 to be high-end. It has funny copy," says the former "Mad man" who knows nothing about shampoo but an awful lot about what motivates people to spend money. "It doesn't talk science. It talks vintage dresses."

As a result of this business savvy, Obando has to answer only to himself. For spring, his collection has been inspired by mid-20th-century America and the westerns of John Ford. (There are no chaps involved.) "It's about the big frontier and how the environment affected clothes as they went from the East to the West," Obando says. "We decided we wanted to wax chiffon and the first attempts were not pretty. Within six months we've used many washers and many, many dryers. And many, many have broken."

Obando is quick to indulge his passion. But he also recognizes that fashion does not need another designer-as-celebrity -- or celebrity designer. "We are in the service business. I have to service the clients," Obando says. In the time of Christian Dior, couturiers wouldn't even enter their client's home through the front door -- an observation noted by Vanity Fair writer Amy Fine Collins in her September story on the history of haute couture. Designers were considered vendors, not matinee idols.

"The moment you lose touch with humanity," Obando says, "is the moment you lose the ability to influence it."

On the Make

The uneasiness in the industry -- now rising to the level of dysfunction -- dates back at least five years, when the war in Iraq, the SARS outbreak in Asia and the declining U.S. dollar created what former Gucci CEO Domenico De Sole called a "perfect storm" that hit the luxury business and caused revenue to plummet.

Retailers began turning on each other, with boutique owners complaining that large specialty stores slash prices of designer merchandise with the speed, gusto and tackiness of late-night TV pitchmen. In June this year, about 40 boutique owners from places such as Los Angeles, Seattle, New York, Washington, Charlotte and Birmingham, Mich., gathered in a Chelsea showroom for a powwow. The focus was on how to work as a group to fight back against the big corporations, to preserve the unique character of boutiques and prevent the fashion industry from becoming a discount business incapable of supporting iconoclasts or artisans.

These bread-and-butter concerns have been coupled with intra-industry debate over the lack of cultural diversity on the runway and how that failing affects consumers. That conversation was no less emotional than the panel discussions, testimonials and eat-your-veggies initiatives aimed at ridding the runways of emaciated models.

All of those disparate concerns have been brought to a head by the recession, which this spring led consumers to squirrel away more of their disposable income than they have since 1998. The 6 percent savings rate reached in May, when many people banked their government stimulus checks, was a far cry from just a few years ago, when every junior publicist and senior executive was going into Visa debt to make sure she had the right handbag and politicians were equating shopping with an act of patriotism.

Why would anyone launch a fashion business against such a backdrop?

Chris Benz believes he has the right combination of creative chops, business acumen and Type A-Virgo-self-directed-Montessori-schooling to be successful. Benz -- a slender, boyish young man with a sharp chin and scruffy mien -- moved to New York from Seattle for design school when he was 17. He skipped his senior year of high school, returning only to attend his prom dressed in a Prada suit from a discount shop.

He worked at J. Crew, where he designed the bridal collection, and at Marc Jacobs. By the time he launched his signature collection for fall 2007, he had experienced the yin and yang of the American fashion industry. "J. Crew is very vertical. It was really about learning how clothes sell," Benz says. "Alternatively, at Marc Jacobs, it was fashion for fashion's sake."

Benz's sportswear, priced at $250 to $2,000, is a mix of peacoat preppy, pencil skirt, uptown chic and fluorescent downtown cool -- all in service to a collection that is adamantly wearable without being banal.

Contrary to the conventional wisdom that it's more lucrative to manufacture overseas, Benz produces his entire collection in New York's ever-shrinking Garment District. "It's slightly more expensive production-wise," he says, "but we make up for it by being more focused." The proximity to his manufacturing means that he can keep a watchful eye on quality, make changes faster and avoid the many complications that arise when a designer's factory is thousands of miles away and he doesn't have the manpower to send an emissary to keep track of every detail. The trick, Benz says, is to keep it simple. "I never wanted that trajectory of the major brands. We didn't want to do shoes and accessories."

"There's such a 'Project Runway' frenzy with fashion," Benz says. "You have to put your blinders on."

Shop Till . . . Who Drops?

A recent story in the trade journal Women's Wear Daily noted that 12 percent of all fashion companies won't survive the recession. Twenty percent of them will have to abandon their lofty lifestyle dreams of becoming a behemoth corporation akin to Polo Ralph Lauren, with its own paints, bed linens and restaurant.

The entire industry is having to regroup, reboot and reinvent. Fashion's Night Out is intended to remind consumers of the pleasures of shopping. But it will take much more than a single evening to convince them that it is a pleasure worth the price.

This season in New York, more than 200 designers will unveil their spring 2010 collections on catwalks, in tableaux vivants and over cocktails. Whether they are waxing and washing chiffon or engaging in the time-honored tradition of putting their own eccentric twist on a classic, they will have to contend with an entirely new economy and a whole new mind-set.

"At a time of crisis, you have to work harder. They have to look at their company. I always joke, we needed a laxative. There was too much of everything," von Furstenberg says. "We need to give better value and better product.

"You have to stand for something."

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