What They Have Will Do Just Fine

As noted previously, current economic circumstances are spawning a sea change in attitudes and behavior. Unlike during the downturns of 2001 and 1990, Americans are adjusting their spending habits to a new, more permanent state of malaise.

Whether it is because they don't have jobs, have much less in their pockets than they used to, or are worried enough about the future that they want to have more in reserve, consumers are increasingly looking to cut back, trade down or buy second-hand.

Many are also accepting another notion: what they already have in hand will do just fine. Reuters offers us the latest on this emerging trend in a report entitled "In Recession, Ladies Recycle Last Year's Dress."

Last year at this time, Kathy Johnson and her husband travelled to London and Paris, where she spent about $2,000 (1,336.72 pounds) on a shiny, red Louis Vuitton shoulder bag and a matching charm without much thought.

This year Johnson, who runs a tech advisory firm with her husband in the San Francisco Bay area, is recycling older dresses to save money.

"I'm thinking 'Maybe I'll just sneak in last year's dress and nobody will notice,' and I'll just accessorize it a bit differently," said Johnson, who expects to attend several holiday parties this year.

"I try to make it a little more about what I need on an everyday basis, rather than spending a bunch of money on something I'll just wear once or twice," she said.

Johnson's logic is likely to be played out across the country this season as U.S. consumers cut spending amid the worst financial crisis since the Great Depression.

That is terrible news to department stores, boutiques and apparel makers, who tend to get a boost when the fashion-conscious splurge on clothes for office holiday parties and New Year's festivities.

U.S. retail chains just posted the worst October sales results in more than three decades, prompting the International Council of Shopping Centres to pare its already grim forecast for holiday season sales. It now expects November-December sales to rise 1 percent, from a prior view of 1.7 percent.

What is more, a recent survey by executive search firm Battalia Winston Amrop found that one-fifth of U.S. businesses are not having 2008 holiday parties, effectively passing out pink slips to women's "little black dresses."

That could hurt department stores like Nordstrom <JWN.N> and Macy's <M.N>, already struggling with sharp monthly sales declines, as well as women's apparel stores like AnnTaylor Stores <ANN.N>, Talbots <TLB.N> and Chico's FAS <CHS.N>, which owns the White House Black Market chain in addition to its namesake stores.

"I think (consumers) are going to be very loath to buy anything," said Wendy Liebmann, chief executive of consulting firm WSL Strategic Retail, which researches shopping trends.

As for herself, Liebmann guessed that she will feel the need to be festive during this gloomy holiday season.

"But I know there's a very wonderful corner of a very wonderful closet of mine, which has absolutely fabulous stuff in it that I haven't worn for some time. So I know I will be shopping in that corner."

"But if (people) do feel they need an affordable little treat ... there are a lot of places women feel very comfortable buying used, pre-owned or excess inventory products."

According to her most recent poll, about 51 percent of women had bought second-hand clothes, and Liebmann expects that to increase as times get tougher and more people realise that some used clothing stores sell vintage designer dresses.

TJX Cos <TJX.N>, an off-price retailer that buys excess merchandise at below wholesale prices, has outperformed in recent months as shoppers look for bargains at its TJ Maxx and Marshalls stores.

"We often talk about the resiliency of our off-price business model, and we are seeing that resiliency benefiting us in this difficult consumer environment," said TJX CEO Carol Meyrowitz in a statement last week.

LIFE GOES ON

A spokeswoman for Goodwill Industries International, which operates more than 2,000 second-hand stores across the U.S., said sales have increased nearly 7 percent over the first nine months of the year. More specifically, she said store managers in New York City -- the epicenter of the Wall Street meltdown -- were noticing new faces in their shoppers' midst lately.

Another discount avenue that is growing in popularity is sample sales, where fashion companies aim to unload excess goods at deep discounts. They have traditionally been held in cities like New York or Los Angeles, but a number of companies have emerged that now do the same thing online.

Top Button is one such company, which said it is getting a boost as fashionistas become more bargain-conscious and the credit crisis forces some fashion brands out of business.

"We haven't seen a decrease in shopping," said Top Button co-founder Michael Feldman. "If anything, it's been a lot more." The company's original site TopButton.com has information about actual sample sales while a newer site, TheTopSecret.com, holds virtual sample sales.

A recent event featured Andrew Marc coats at 65 percent off retail. Feldman said they sold 1,200 pieces in five hours.

"People still have to go to parties. They may change their shopping habits ... but life doesn't stop," Feldman said.

That sentiment is being shared by executives at Ann Taylor, which usually sells many special occasion items like dresses, cashmere sweaters and party tops during November and December.

"Even in these challenging times, we still believe there will be parties, although they may take on a slightly different tone," said spokeswoman Maria Sceppaguercio.

For Laurice Rahme, founder and chief executive of boutique perfume-maker Bond No. 9, there may be fewer party invitations this year, but no drop off in shopping, especially when it comes to her favourite designer, Marc Jacobs.

"It just happened that his collection is terrific this year. I just have to have one (item from it)," Rahme said.

Comments

[roger]

Maybe just maybe people will learn how to use a hammer again,
or,cotton /tread & needle if they remember witch store sales it.
there is a possibility they will rediscover the knife for chopping
lettuce, yea possibilities unlimited....they could be all they
want to be....I'm so proud of my fellow Americans!

[poor boomer]

Funny I should read this today. One of the heels on the ONE pair of shoes I own has started to detach and I ended up with ouchy things (like pebbles) in my shoe. Sigh, time to replace it.

[rocky]

If you saw the movie "Cinderalla Man" a few years ago, you may remember the luxurious supper club scene. It was filmed in the restored Carlu Room in Toronto. The original opened in 1930 in a fashionable department store building owned by Toronto's once wealthy Eaton family. The building was supposed to be the first in a large redevelopment scheme planned for the neighborhood. Unfortunately, the Great Depression intervened. No major buildings were added to the area until Toronto's condominium boom hit the neighborhood a few years ago. The neighborhood never did catch on with the carriage trade. Lady Eaton was rich enough to divide her time between her estate in Toronto and her homes in France and Italy throughout the depression. Many other city residents relied on soup kitchens to get them through hard times. Eaton's department store chain went bankrupt c. 1990 and the current occupant (an affiliate of TJ Maxx) of the ground floor of the once fashionable store now sells low end merchandise.

[Slappy]

She has to "hope no one notices her dress is the same as last year"????

How about that I literally have NO casual clothes because my entire clothing budget is consumed by purchasing workwear at Men's Wearhouse?

I'm having a difficult time mustering much sympathy.

[Martin, the Netherlands]

This is truly horrible news, but I am confident that Ms. Paulson will already have drawn her husband's attention to the grave dangers this poses to the future of civilisation, and that Messrs. Paulson and Kashkari will shortly announce a Little Black Dress Funding Program, the amount of which is not to be disclosed since one simply does not ask a lady how much her dress has cost.

[Black Star Ranch]

...well, thank goodness advertising doesn't market to 58yo retired white guys - no new products/items there!...shorts, BSR polo shirt & tennies or flip-flops year-round. Nothing like an old grumpy white guy with a garden to "sail" the economy.....

[Abraham]

Poor Kathy Johnson represents what is bad with our country. She flies to Paris and drops $2,000 on some handbag without thinking twice. That's more money than many people make in a month. I could never spend that kind of money on a fashion accessory, all the while knowing that people are hungry, cold and sick. She is worried that people may notice she is wearing a dress more than once. Kathy, no one notices. You are self-centered. You have afluenza and the antidote will be when your tech advisory firm closes down. Kathy, I suggest that either you or your husband get a job somewhere else so all of your family's eggs aren't in one basket.