Willowy US economy spells trouble for local talent
Australian designers were forced to tackle one of the toughest selling environments in "many years" during the recent New York Fashion Week showcase, a leading luxury marketing expert has claimed. Five local designers including Alice McCall, Toni Maticevski, Kit Willow, Aurelio Costarella and Michael Angel took their latest spring/summer collections to the trade event, which ran from September 5 to 12.
Unity Marketing president Pam Danziger, who has consulted for upmarket labels such as Gucci, Yves Saint Laurent, Stella McCartney and Balenciaga, said many would no doubt target the lucrative department store sector - a sector currently suffering under the weakening US dollar.
"The department stores are where you pick up your biggest profits - you'd have to sell to 50 to 60 smaller boutiques to match that market and for an emerging label that's going to be very hard to manage," she said. "Unfortunately, it's a tough area right now."
Department store operator Macy's Inc, which also owns the upmarket Bloomingdales chain, last month reported a 1.4 per cent decline in quarterly profit and slashed its earnings forecast for fiscal 2009. The company warned cutbacks in US consumer spending could further push sales down further its stores.
"The fact is the luxury consumer today is resistant to spending money," Danziger said. "Do they have less money? I don't think so. I think they feel less wealthy because of the overall negative feeling about the economy in the United States."
The luxury marketing consultant said securing new department store contracts for upmarket labels such as Maticevski and Willow would now be more difficult than ever.
In an interview with US trade publication Women's Wear Daily in July, Australian designer Jayson Brunsdon admitted conditions in the US market were "pretty bad" and confirmed his stockist base had halved from 60 to 30.
Danziger said the forecast for the next 12 months was not any rosier. A recent Unity Marketing poll of Americans earning an average income of $204,800 found over half of the 1,024 respondents would spend less on luxury than they did a year ago - this is atop a 20 per cent decline in spending for this year's second quarter.
"On a more positive note, one of my research projects found that where a product is manufactured has very strong connotations for the luxury consumer," she said. "This is good news for labels that want to tell a quality Australian story."
By Assia Benmedjdoub