As global economic crisis hits all industries, a lot of fashion companies are also starting to fall into credit problems as well. This is because consumers usually slowdown or stop spending on clothes and accessories during times of recession. These last few months, there are various companies around the globe which has filed for bankruptcy.

Morgan

Recently, one of the big names in the fashion industry was added to the list of companies having financial problems. Morgan, the 40 year old French retailer company has declared their negative condition. This retailer has stores located in 57 countries and has reached its popularity peak in the 90s.

Several celebrities have modeled in its advertising campaigns – these include Carla Bruni, David Ginola, and Mischa Barton. The company is hoping for a take over but that still remains to be seen.

IT Holding and Chanel

IT Holding is parent company to Malo and Gianfranco Ferre. But currently, it is negotiating for a partnership deal together with an investor (Chinese) in order to help their finances.

Also, Chanel has just announced their plan to remove 200 jobs in their Paris office. This decision has come in the middle of recent concerns for this luxury label, followed by the announcement to cancel their planned events for “Mobile Art,” Chanel’s touring museum. Although Karl Lagerfield, Chanel’s label designer has said that this move was just an artistic choice.

Salvatore Ferragamo

Some fashion labels in Italy are holding emergency talks together with the Italian government and appealed to support their industry or at least lessen the effects of their financial slowdown.

But still, many big labels have to launch lines that are more affordable in order to entice costumers to bring out their wallets. In fact, Michele Norsa from Salvatore Ferragamo said that they can no longer sit and wait for their customers to enter the shop on their own.

Another recent shocking announcement was made by Betsey Johnson and Vera Wang – they said that they won’t be showing their collections for fall 2009 due in February because of the down turn in the economy. This move might be followed by other labels, since shows will cost them thousands of dollars if they pushed it on.

The industry experts are commenting that there might be a likelihood of smaller or more reserved shows following the trend set by many designers. Also, it appeared that the designs were also affected by the crisis because many shows showed only quiet colors and minimalist lines.

Prada

However, it is not all gloom and doom – now there are a lot of bargains that you can find (this includes as much as 40% off in Prada’s Milan stores). Since companies are luring customers back to their shops, many of them might find that 2009 is the year where the spending power of consumers return.

Many companies might focus on classic pieces that have longer shelf life. Moreover, there are predictions that 2009 trends will indicate that you can wear again some of the pieces from the past seasons. And by the time this crisis is over, it’s very likely that major players will again produce extravagant creations.

By: Benedict Yossarian

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