Fashion is often criticized for being frivolous, but a recent study from New York University found that fashion can play an important role in the economy.
The study used the example of Michelle Obama, who has recently become a fashion icon, with blogs like Mrs. O following her ever choice.
The study found that not only does the first lady’s clothing choices increase sales of items she wore, but also increases their stock prices. David Yermack, professor of finance and business at New York University's Leonard N. Stern School of Business, performed a year-long analysis of the economic impact of Obama's apparel selections (Oliver & Yeo, 2010).
He found that one appearance in a brand’s item by Obama could increase the manufcaturer’s stock price by up to $14 million.
He found that one appearance in a brand’s item by Obama could increase the manufcaturer’s stock price by up to $14 million.
Obama made 189 public appearances between November 2008 and December 2009 and wore items from 29 publicly traded companies, including J.Crew, the Gap, Saks Fifth Avenue and Target. Those companies raked in an estimated $2.7 billion as a result of Obama's donning their apparel, according to Yermack's results (Oliver & Yeo).
The same stock price increase was also found when the first lady visited Europe (Oliver & Yeo).
Obama’s clothing choices also spur sales for the brands she chooses. After 18 largely-publicized appearances by Obama, the designers whose clothing she wore experienced a 2.3 percent jump in sales, compared to the average .5 percent gain that a company usually sees when it announces a new celebrity endorser, according to Yermack's results (Oliver & Yeo).
Surprisingly, Yermack does not believe other celebrities have the same impact, perhaps because they may be paid to wear certain items, while Obama is not. Even the fashionable French first lady, Carla Bruni, does not have the same impact, possibly because she usually wear high-end Dior. Part of Obama’s influence seems to stem from her price-accessible choices, choosing items from stores like Target, J. Crew, and Talbots (Oliver & Yeo).
Besides being able to spur the economy, Obama’s fashion aids in diplomacy. On the Obamas’ recent trip to Asia, Michelle Obama wore Indian American designers and referenced Indian designs. Thus although Obama did not wear a sari (Stancati, 2010), she showed a desire to use fashion to help gain acceptance.
What do you think of fashion? Are you amazed with Michelle Obama’s fashion power?
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Sources:
Oliver, M. and Yeo, S. (Nov. 8, 2010). The Midas touch? Michelle Obama's fashion choices move markets. ABC News. Retrieved November 10, 2010 from http://abcnews.go.com/GMA/michelle-obama-fashion-choices-influence-stock-market-nyu/story?id=12083501&tqkw=&tqshow=GMA.
Stancati, M. (Nov.9, 2010). Michelle Obama’s fashion diplomacy. The Wall Street Journal. Retrieved November 10, 2010 from http://blogs.wsj.com/indiarealtime/2010/11/09/michelle%E2%80%99s-fashion-diplomacy/?blog_id=149&post_id=7615.
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