The phrases ‘financial meltdown’, ‘slowing global economy’ and ‘credit crunch’ are becoming all too familiar in headline news articles across the globe. It is impossible to not hear or read news about the financial and property sectors succumbing to (what feels like) the end of the world. Deep recession fears, high unemployment, and stagnant growth seem to be the buzz phrases of this month.

So I guess it was only appropriate for me to join in the hype of catastrophe and try to relate it all to the world of fashion. Fashion as we know it is the world of airy, fairy goodness where anything goes. Critique, trends and celebrities ultimately shape the world of fashion – which at first glance, have absolutely nothing to do with the world of regulated financial systems and alike. However, as we delve deeper into the world of airy fairy goodness, we realise that fashion, like any organised system, is based on people wanting it, and people creating it. This people, is more commonly referred to supply and demand – the fundamental principle behind economics.

So hold up, what am I trying to say here? Fashion = Economics?? Huh? Well I guess what I’m trying to point out is that this ‘economic slowdown’ will ultimately have impacts upon the fashion world. Without the nitty gritty details, assuming the world ends tomorrow and financial markets collapse (further), us buyers/demanders (the everyday individuals who shop) will ultimately have far less money to spend on our favourite fashion labels/items, thus reducing expenditure on such luxury items. Because we spend less, retailers who usually sell the stock suffer, therefore reducing their orders next season. This inturn reduces the demand for the fashion labels to produce as many garments/accessories which then reduces their incentive to create an extensive range as they don’t want to experiment into untouched waters to protect their reputation.. Phew.

Yes I know there are about a million assumptions in the thought process my supply chain but I think it can be considered a fair enough interpretation of what may come.

Unfortunately, my predictions have already begun to come true, with Australian iconic designer label Lisa Ho, ditching the zero to hero label Mad Cortes in a matter of under 24 months. Lisa Ho purchased a 51 percent stake in the much anticipated label in 2006, only to announce in October 2008 that she would no longer be backing the label due to poor performance. Now your probably thinking that this sort of thing happens a lot, and I’m guessing that it does. But it does leave some concern when a label with such high regards falls to back to earth with such a thud. Karl Lagerfeld (designer of Chanel) was one of the first internationally acclaimed designers to endorsed the label, and Lisa Ho bought into it, yet still Mad Cortes has hit the biggest hurdle in its short-lived history.

Without a doubt, there is such a thing as fashion becoming too niche. Lisa Ho herself has admitted that Mad Cortes was so niche that there was a ‘very limited market for it’. So it leaves wonder into the next few seasons for some of the major national and international labels – how extensive will the ranges be? Will they be conservative? Will there be many new flagship namesake stores? Only time will tell…. let us hope the world does not crash on our shoulders tommorrow.

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