J. Crew sales figures, J. Crew stock prices, Hart Schaffner Marx bankruptcy
Pablo Martinez Monsivais/AP
First lady Michelle Obama, accompanied by daughter Sasha and Malia, gestures during the
inaugural parade in Washington

J. Crew’s Uptick: The “Obama Factor” or Recession-Conscious Fashion?

February 04, 2009 01:03 PM
by Anne Szustek
Days after the Obama girls wore J. Crew coats during the presidential inauguration, the retailer rose in both fashion and financial stock.

J. Crew and the Obama Push

On Jan. 23, the Friday following President Barack Obama’s inauguration, shares of fashion retailer J. Crew rose. The same day, Barclays Capital analyst Jeff Black was quoted by the Associated Press as upgrading the firm’s rating from “Underweight” to “Equal weight.”

J. Crew’s price-per-share rose 2.9 percent that day, closing the week out at $10.56.

Black pointed at planned clearance sales and a large sample sale in New York City as reasons for his more positive outlook on J. Crew.

The sample sale, held the following week in Manhattan’s Garment District, was indeed a hot event. Shoppers streamed in from around the Tri-State area, lining up the block to snap up overstock of J. Crew’s signature classic apparel.

The shoppers may have had a penchant for recession-conscious fashion. But another factor was at play in the sample sale hype—or at least for Jersey City, N.J. 10-year-old Taylor Thorne: the “Obama factor.”

"I thought it was really pretty," Taylor told the New York Post, mentioning the coat worn by Malia Obama on Inauguration Day. "It looked toasty."

The day after Barack Obama’s presidential inauguration, J. Crew’s shares went up 10.6 percent after it announced that it was the brand behind the girls’ coats and First Lady Michelle Obama’s green gloves. In addition, the servers on J. Crew’s Web site got jammed with people looking to snap up some inaugural style.

Related Topic: The Obamas’ fashion sense

Other designers associated with the newly minted First Family’s style have gotten recent accolades: Isabel Toledo, the designer who crafted Michelle Obama’s inaugural day outfit, is being honored with a window display at Barneys New York’s flagship store, courtesy of Simon Doonan, the chain’s creative director.

Michelle Obama also sparked buying trends during her husband’s campaign. Case in point: The $148 dress from mall store chain White House/Black Market she wore for an appearance on talk show “The View” reportedly sold out at some locations after the show.

The Obamas have also lent fashion credibility to their hometown, with Chicago-based labels Maria Pinto and Hart Schaffner Marx getting wear time by the First Couple. Suits from HartMarx, as the men’s label is commonly known, retail for some $1,500 in department stores—not exactly a price within every man’s grasp.

But on Jan. 23, Hartmarx Corp., makers of the men’s suit label sported by Barack Obama during the campaign, filed for Chapter 11 bankruptcy. The company had seen its credit lines axed and its stock “plummeted to pennies from last fall's $3 as its profits eroded in a brutal retail market,” wrote the Chicago Sun-Times. “Hartmarx shares, which were delisted from the New York Stock Exchange last November, closed at 16 cents.”

Background: Quality mid-priced fashion recession trend

Cash is running tight in the high-end apparel industry. Sales in the U.S. luxury fashion segment were down 27.6 percent year-on-year from December 2007 to December 2008, according to statistics supplied in a MasterCard report.

But consumers have been turning toward designer affinity lines for recession-chic stores such as H&M and Target, as well as to classic fashion pieces deemed to have more longevity.

As trepidation over the economy takes hold of personal budgets and weighs on the minds of consumers, the timeless ethos of preppy has taken hold of the retail apparel sector, as evidenced by strong numbers recently posted by clothing brands traditionally associated with classic style—or the preppy factor.

Obama family favorite J. Crew would debate its positioning as a mid-priced preppy clothing line, however. "I don't think we're moderate or luxury," J. Crew Creative Director Jenna Lyons told the Chicago Tribune. "We're not doing what Gap is doing, but we're not doing what Louis Vuitton is doing… We're trying to shed the preppy iconography of our past and associate more with classic pieces, the trench coat, the white shirt, the chino…We're taking something that's stodgy but making it feel more modern."

Reference: Fashion, U.S. economy guides


Most Recent Beyond The Headlines