ECONOMIC CLIMATE AND DESIGN

The Present Economic Climate And Design/Fashion

The Present Economic Climate And Design/Fashion

Introduction

The whole world is facing global recession. The economy is slowing, the business environment is unpredictable and the consumers are getting increasingly diverse, informed, and technologically strong and demanding. The global meltdown has, in no way, spared the fashion industry. This industry, along with other textile products industry, is also feeling the pinch of financial adversity. Fashion is one of the world's most important creative industries. It is the major output of a global business with annual U.S. sales of more than $200 billion—larger than those of books, movies, and music combined. Everyone wears clothing and inevitably participates in fashion to some degree. Fashion is also a subject of periodically rediscovered fascination in virtually all the social sciences and the humanities. It has provided economic thought with a canonical example in theorizing about consumption and conformity. Social thinkers have long treated fashion as a window upon social class and social change (Abrahamson, 2009, 708).

Impacts of Recession on Global Fashion Industry

The trends all over the world are that of rising unemployment, credit squeeze and plummeting home budgets. Lavish spending habits have been replaced by very cautious closefisted consumer. One of the few items on which the consumers cut back in tough times includes apparels and fashion accessories. As such, many fashion companies have also started to fall into credit problems. In the last few months, various companies worldwide have filed for bankruptcy.

Many big names in the fashion industry are facing financial problems, many of whom have even declared their negative condition. Some of these companies are hoping for a take over.

Many companies are negotiating for a partnership deal with willing investors in order to help their finances.

Announcing of plans to remove jobs in regional offices has become more common news.

Many events, innovative plans are being cancelled.

Many fashion labels in fashion hubs like Italy are holding emergency talks with the government and are appealing to support their industry or at least lessen the effects of their financial slowdown.

Textile and clothing market

The textiles market experienced healthy growth rates during the past five years, peaking at 8.6% in 2004. However, the market is expected to experience much lower rates of growth during the forecast period, which can be attributed to the 2005 abolition of the Multi Fibre Agreement on Textiles and Clothing. This means there is technically now unrestricted access to the European, American and Canadian markets, leading to an influx of cheap Asia-Pacific imports affecting domestic textiles trade. The UK textiles market generated total revenues of $14.7 billion in 2004, representing a compound annual growth rate (CAGR) of 6.1% for the five-year period spanning 2000-2004 (Silverstein, 2006, 519).

In comparison, the French market experienced a CAGR of 2.1% during the same period. Market consumption volumes in the UK increased at a CAGR of 4.4% between 2000 and 2004 to reach a total of 1.6 million tonnes. The leading revenue source for the UK textiles market is the synthetic fibers ...