But if we do indeed fall off the cliff, how will retail be affected, and in turn, the fashion industry?
The worst case scenario: A decrease in spending means a decrease in store sales, which means a decrease in wholesale orders, which means a decrease in cash flow for designers, which means we could end up right where we were in 2008/2009. Meaning, a ton of discounted clothes, a ton of brands going out of business, a ton of advertising budgets cut, resulting in the loss of a ton of media jobs. Pretty dreadful.
Hopefully it won’t come to that. (What can I say, I’m really excited about my new job and don’t want it to go away.)
“I don’t think fiscal cliff will cause that era of depression once more in retail,” says Brian Sozzi, a former retail analyst who is now the chief equities analyst at NBG Productions. “But, in terms of what went down with retail inventories, styles, markdowns, cautious tones by executives it’s a good benchmark to use when pondering the first half of 2013.”
Sozzi also believes it’ll affect the actual fashion going down the runways in February. “If all you know what breaks loose (pressured profits, focus on lean inventory levels, product chasing) rest assured New York Fashion Week will be showcasing more somber colors and basic-type looks (trendier stuff will again be a turn off to the consumer, they will be trying to get the most bang for their buck).”
So there’s that. I feel a little bit better now.
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