Recessions and T-Shirts

Thursday 13th of November 2008 03:40:51 PM

Recessions and T-Shirts

Retailers of polo shirts and high couture have the same problems right now. How do you prepare a business to endure through a recession? With a rapidly declining economy, clothing, textile and fashion businesses are looking at ways to make their companies strong enough financially to survive difficult times ahead.

The key seems to lie in implementing marketing strategies that attract customers while cutting costs through product design. There are a number of ideas that are being suggested including: 1) increasing worker productivity by reducing the amount of non-productive pay for annual leave, 2) reducing worker tax rates, 3) getting international patents on products to preserve design rights, and 4) developing a customer strategy designed to promote value.

These suggestions came out of a roundtable discussion held during an Italian convention which focused on “Fashion and Luxury in a Difficult Market Context: Which Strategies?” Though the topic concentrates on fashion, the fact is many of the ideas for surviving a recession apply to all retailers including those selling sweaters or discount clothing.

The UK worker generally makes more annually and gets more time off than the Italian worker in the clothing industry. The Managing Director of the Prada Group said, “The tax rate cut for workers, in exchange for a five day reduction in annual leave, is the right solution for pushing consumption.” The group, which included Moretti Polegato who is the founder of Geox, also discussed the need for global financial regulators to implement controls to prevent an economic disaster such as the current one from happening again. The Managing Director of Gianni Versace, Giancarlo Di Risio, said a good marketing strategy is to target developing countries such as China or India.

There was general agreement the best marketing strategy is to make the consumer feel as the value of the product is more than what is charged.

(c ) Image by Daniel Jaeger Vendruscolo, www.sxc.hu/