That rings true.
But it also means that the business of fashion is, in truth, not all that high-minded, but a contact sport. Stores stay close to their customers and are usually led by them. Right now, it seems shoppers might have led at least some retailers into a jam.
The numbers for fashion haven't jived with the broader picture for some time -- although a mixed reading on July sales showed the two trends might be converging and Thursday's rout in the stock market got everybody's attention. A 500-point drop in the Dow Jones Industrial Average does that, doesn't it? U.S. unemployment remains above 9 percent, gas and food prices are high, consumer confidence is waning, stock markets are extremely volatile, consumers reduced their total expenditures in June for the first time in a year and Europe is in the midst of a debt crisis.
Still, profits have been on the rise in fashion, sales have gained somewhat and the industry spent much of the year trying to get back to life as usual following the financial crisis. Although some specialty store companies, such as the Gap Inc., have been hit hard by higher cotton costs, much of the industry seems to think lower inventories and higher prices should help alleviate their cost issues. It remains to be seen what happens this back-to-school season when everybody tries to raise prices at once.
Robert Taubman, chairman, president and ceo of Taubman Centers Inc., which operates 26 retail properties, summed up the overarching attitude nicely last month.
"I don't see undue pressure in the retail community," Taubman said. "There is a lot of conversation about cotton prices and labor prices in China. Will they be able to pass on to the consumer those costs, and what does it do to their margins? Luxury tenants are doing really well. They are passing on price increases. The more discount value opportunity [is] doing great and in the middle, at least in our shopping centers, we are doing just fine."
But cracks have appeared.
Sales growth at PPR and LVMH MoÃ«t Hennessy Louis Vuitton slowed in the second quarter as consumer confidence amid luxury consumers fell dramatically. Pam Danziger, who surveys high-end consumers as president of Unity Marketing, noted, "almost 70 percent of our sample say that the recession is not over."
If low-end consumers are fretting over their utility and grocery bills and the stock market spooks high-end consumers, things could get much worse for chains that were too eager to get back to life as usual or believed too much of their own PR.
Their strategies to chase growth overseas might be sound, but their tactics to boost sales at home might leave them holding the bag if the second half isn't as strong as hoped.