04/06/05 by Mark Tier
To a mere male such as myself – especially one who wears something comfortable until it literally falls apart – there has never been any logical reason why women’s fashions should change so dramatically from one season to the next. Yet a new women’s fashion trend can spread like wildfire. Whether inspired by a Paris designer, or by a movie star or teenagers in California, Brooklyn or Tokyo wore, somehow the new style becomes the “in” thing to be seen in, and in no time at all you see it everywhere.
“Why” becomes clear when you view the fashion business through the lens of reflexivity: behind each new fashion trend is a new belief about what looks good. The profitability of billion-dollar companies isn’t just shaped by but is based on ever-changing beliefs.
If a company is caught with inventory of clothes that are suddenly out of fashion it has to write them off. To avoid that, lead times between ordering, production and sale are continually tightened. Today, clothes are made in small batches in China or Mauritius or Bangladesh and air freighted to retailers around the world. So if a retailer or manufacturer guesses wrong, his loss is small.
Women’s fashion buyers are like Wall Street gurus trying to ride the next trend. How well they read the opinion of the market determines their company’s profits. And (as on Wall Street) there is never a guarantee that someone who got it right today will repeat their success tomorrow.
The only constant in the women’s fashion industry is that what women like to wear this season they probably won’t want to be seen dead in a year from now.
Consumers, buyers, retailers, designers and manufacturers are engaged in a circular and never-ending guessing game of who’ll be wearing what when and what will be “in” and “out.” The result: a constant state of change, of disequilibrium – the natural state of an industry that is purely reflexive in nature, ruled entirely by beliefs or opinions.
Sign Up for The Daily Reckoning e-letter and receive a chapter from the new Financial Reckoning Day... FREE!
We Value Your Privacy.
