Fashion has not been this modern since Sex and the City

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After years of giving priority to casual over chic, fashion is back in fashion. But for how long?

The issue is more than fashionable. Many retailers have wrongly bet that consumers will continue to bend over in their tracksuits; they now have to decide whether the current revival of fancy dresses and smart suits is a flash after the pandemic – or heralds a renewed trend that will last for several more seasons.

Rising inflation and fears of a recession looming have hit retail hard. Chains, including Target Corp. and Walmart Inc., for example, are struggling with stock overcrowding as consumers have changed tastes or shrunk. But in the midst of a whirlwind, there is one bright spot: fashion.

On both sides of the Atlantic, customers are throwing out their loungewear and reaching for elegant dresses and blazers. Ralph Lauren Corp., Nordstrom Inc. and Macy’s Inc. reported an increase in demand for more elegant items. Rent the Runway Inc., a premium clothing rental service, was one of the few consumer-focused earnings this season that surpassed estimates and raised its guidelines as it saw more women rent daring clothing for special occasions.

“The black tie is until 2022 as the tracksuits were until 2020,” Jennifer Hyman, co-founder and CEO of Rent the Runway, told analysts last week.

The picture is similar in Europe. Inditex SA, whose strength is the interpretation of catwalk trends for mass audiences, recorded sales growth from May 1 to June 5 by 17% compared to the same period in 2021. So much for the fast fashion giant Shein Group Ltd. who killed Zara. Indeed, more refined clothing tends to favor premium sellers over cheap chic. It would not be surprising to see that Prada SpA and Kering SA Gucci and Saint Laurent will benefit when they report next month, as they generate 20% -30% of clothing revenue, according to Bernstein.

The swing of the pendulum towards beautiful clothes also has a wider echo. As silhouettes change, there is a need for new shoes – consider high heels, not sneakers. Even underwear is lifted. “Real clothes” require more structured underwear. This could give an extra boost to Victoria’s Secret & Co. This retailer recently halted a period of declining market share in bras, with a slight increase.

The main force driving this turn is that events have returned with revenge. People hang out in the evenings and on weekends. About 2.5 million weddings are expected to take place in the United States this year – the most since 1984, according to The Wedding Report. Add long-delayed parties and vacations, and that’s a lot of new gadgets.

Many people have not bought formal wear for more than two years. With so many customers suddenly replenishing supplies – and posting on TikTok and Instagram – it has become a collective experience, creating the biggest fashion buzz since 1998, when Carrie Bradshaw flaunted her striped panties in the original Sex and the City.

It helps that there are currently many wearable trends. The popularity of the dress has been growing for several years, but now it comes in a series of variations, including the return of the cover style, which experienced its last rush of popularity a decade ago. Prints are also on display, and there are countless to choose from, whether you want floating floral or geometric elements.

The bright colors have returned brilliantly, perhaps reflecting our optimism about life after the pandemic. This works well for dresses, but also for tailored jackets and pants – another trend that revives women’s clothing.

Men are not far behind either. Men’s clothing was the best category for Nordstrom in the first quarter of the current fiscal year. Even the suit shows new signs of life. Sales of suits by the British company Marks & Spencer Group Plc increased by 39% in May, compared to 2019, as its customers bought clothes for the upcoming wedding season. Hugo Boss AG’s formal wear business is still below pre-pandemic levels, but is recovering, which also reflects a return to offices.

Now the big question is: How long will good times last?

Christmas should be another opportunity to buy clothes, given that it is typically a fun season. This year could be even more stressful, following the break from Omicron in December 2021. And the backlog of special events – the Wedding Report predicts another 2.2 million weddings in the US in 2023 – means there should be wind in the back next year as well.

But other than that, the prospects are more uncertain.

Wealthier customers are leading the re-growth of spending on clothing. They are spent on travel, another big driver of wardrobe refreshments. But they are not immune to external pressures. U.S. luxury is closely linked to stock market wealth, and the S&P 500, which enters the bear market on Monday, as well as a sharp drop in cryptocurrencies, could undermine the confidence of top companies.

Consumers also have more options on what to spend. The decline in interest in clothing in the last decade has coincided with an explosion of new technology, restaurants and streaming services. Although Instagram was initially accepted by fashionistas, it also gave them competition, as it featured travel items, restaurants and cosmetics. Experiences will compete again for a share in people’s wallets, but it is not clear whether there will be the same level of innovation in the next few years. If not, it could mean more spending on clothes, shoes and accessories.

The continuation of new fashion trends is also necessary. After filling their closets this year, consumers will need a new incentive to shop. Petah Marian, founder of the consulting company Future Narrative, sees that fashion for a good feeling gives way to darker, sexy styles, characterized by corset, transparency and leather, while the mood changes to fun in a dark economic and geopolitical background. Miu Miu’s micro mini skirt may be a taste of things to come. We will soon see if this will look as good with customers as the range of affordable and timeless garments that have characterized this year.

After the wrong bet on tracksuits forever, retailers should be wary of another wardrobe breakdown.

More from Bloomberg Opinion:

• The target problem of oversupply should scare all retailers: Andrea Felsted

• Gen Z, Millennials and Gen X basically agree on WFH: Chris Hughes

• Do computers have feelings? Don’t let Google decide for itself: Parmy Olson

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Andrea Felsted is a Bloomberg Opinion columnist covering consumer goods and the retail industry. She used to be a Financial Times reporter.

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