PARIS, OCT. 20 -- It wasn't the hemlines but the headlines that rocked the fashion crowd here today. New York's record stock market plunge "may not affect how we buy clothes over here, but it may affect selling the clothes," said Ernest Marx, head of Saks-Jandel, as he arrived for the Guy Laroche show with his dog on a leash. "I think it will eventually hurt the working class but I am not sure our customers will be affected."

According to Marx, the fashion business has continued strong during recession years. "People seem to treat themselves to clothing at such a time," added Val Cook, vice president of Saks-Jandel.

Garfinckel's Chairman Neal Fox, who is also president of Raleighs, hopes Monday's 508-point drop in the Dow Jones industrial average was just a "temporary glitch. There is always a psychological impact, especially with people of wealth who see a big change in their worth on paper," he said. He's worried, too, about the decline of the dollar over the past year, which, with rising costs for fabrics and labor, has pushed prices up as much as 20 percent. "The era of throwaway clothes is over. The focus on quality and fewer items is the ongoing trend. People want to be practical but still have fun and whimsy," Fox said.

Inside the tent, before the start of today's Ungaro show, Lewis Koppelman, a vice president of I. Magnin, and other retailers were besieged with questions about business plans. "Women have been doing a lot of buying and have closets full of clothes," Koppelman said. Now clothes have to be new and exciting before they will be willing to part with $3,000 to $5,000 for a dress."

As if on cue, the lights in the tent dimmed and the spotlight brightened the runway. Ungaro's first models opened the show in very short, tight skirts with easy-fitting jackets and roomy coats -- decidedly feminine shapes in a mix of masculine black-and-white prints. From then on there were continual outbursts of applause, particularly for the ingeniously draped and knotted tight dresses in prints and the brightly colored silks and jerseys. To underscore the importance of draping, even the chairs set at the top of the runway were draped and knotted in white muslin.

By the time Ungaro's gala dresses -- printed and draped, short in front with cascading ruffles to the back -- came down the runway, the crowd was on its feet cheering. It was clear that retailers had, at least for the moment, forgotten the stock market.

"He knows who his customer is and what she wants to wear -- wonderful prints and short, sexy clothes," said Koppelman. "I didn't think about the stock market once after the show began."

But clearly, everyone had to be thinking about short hemlines. Some of Ungaro's dresses for evening were as short as bathing suits, barely covering the crotch. They were among the shortest dresses in Paris this season. While stores applauded them, most had in mind to order them in a longer length.

"Those women who want liposuctions on their knees will have to go a little higher for spring," Cook said. Though she admits she hasn't had the nerve to wear some of the skirts she has shortened most drastically, Cook thinks short skirts will continue to be increasingly popular in Washington. "Once the eye gets used to them, women will want to wear them," she said. "Besides, if you want to look modern, you don't have a choice."

Short skirts were a continuing theme of Valentino's masterly presentation at the Louvre courtyard Monday evening. Valentino, like Ungaro, is among the best selling of all the designers, and he too makes very feminine clothes, although his style is far more tailored than Ungaro's, and this time he uses a lot of shorts.

Valentino opened his show with short tartan jackets matched with short animal-patterned skirts in sheer wool. He clearly likes the mix of crisp menswear fabrics and soft fabrics. He has used animal prints before, and now mixing them with other prints -- like a menswear glen plaid jacket over a tiger-print short wool dress -- works extremely well.

While he likes fitted clothes, jackets with flyaway backs and tent shapes are a recurring theme in Valentino's collection. Skirts are mostly very short, and he often replaces the skirt with culotte shorts.

Valentino's use of up-and-down hems is a sure sign that longer hems are in the air -- although only in the air. When they begin to inch back, they may start as dipping hems or handkerchief hems.

Up-and-down may well characterize what will happen with the stock market next. Meanwhile, June Weir, executive fashion editor of Harper's Bazaar, was projecting a change in styles in the audience of the Ungaro show. "Just from last night to today there are many more women here wearing pants," observed Weir. "The stock market is already having its effect."