In an email sent to members as well as a note posted on genart.org, founders Ian and Stefan Gerard announced today that Gen Art would be closing its doors, effective immediately. Facing recession-driven challenges, the hybrid nonprofit/for-profit organization cited the breakdown of a potential partnership as the ultimate cause of its demise:
During this challenging time we did everything in our power to adjust our business to these new business realities by cutting costs and seeking out alternative funding solutions. However when a major, new, corporate partnership unexpectedly collapsed a few weeks ago, we found ourselves without sufficient resources or time to overcome this sudden and substantial loss of revenue. The reality is that we had fiscally planned and relied upon the representations of this partner. Their decision had the unintended effect of pushing Gen Art over the edge. As of today we have halted all operations and had to lay off all staff.
Beyond throwing celeb-attended parties nationwide, Gen Art’s Fresh Faces in Fashion boosted the careers of then-emerging designers like Zac Posen, Philip Lim, Vena Cava, Sari Gueon, Chaiken and Rami Kashou.
Where does this leave up-and-coming designers and artists? The Gerards are somewhere between uncertain and cautiously optimistic:
We hope that where we have left off, others will step up to help fill the void.
From AFP:
German luxury women’s fashion label Escada declared bankruptcy on Thursday, contrasting with an upbeat mood after official data showed Germany had emerged from recession in the second quarter.
The company, which counts US actress Kim Basinger among its customers and whose clothes have been advertised by supermodel Eva Herzigova, employs 2,300 people around the world including around 600 in Germany.
“Management and employees hope the group will continue to exist,” a spokesman for Escada told AFP.
“Everything will depend on what form the bankruptcy will take,” he said.
The bankruptcy filing will be examined by a judge in Munich who will then appoint an administrator for the company. Negotiations with the company’s bondholders on a restructuring deal fell through earlier this week.
Another one bites the dust.
From The Huffington Post:
Fashion, it seems, has gone out of fashion. Companies are reporting record losses for the first half of 2009, several are filing bankruptcy — the most high profile being the French couture house of Christian Lacroix, and fashion magazines are in a panic over the drop in ad page sales.
So Diane von Furstenberg, the president of the Council of Fashion Designers of America, held a summit of sorts in New York last week with leaders of the industry, including Vogue editor Anna Wintour, to rethink Fashion Week, the semi-annual trade-show-like event to present new offerings and drum up hype. Instead, the meeting turned into a strategy session to figure out how to stop plummeting sales and profits during the current economic recession.
There were several conclusions. Von Furstenberg argued that the period between the fashion shows and when the clothes reach the stores was too long and wants to reform the show system. Fashion designer Donna Karan declared that the practice of early delivery to retailers was the problem. Who wants to by a bikini in March or a mink in July? As a result, Karan said, consumers wait until sales to shop, and companies and retailers lose the huge mark-up that equals bigger profits. Wintour suggested following the French model of having a government-fixed day when retailers can start price reductions, but this was quickly shot down as price-fixing and illegal in the United States. “Is that something we can change?” asked Wintour. “We have friends in the White House now!”
Finally, von Furstenberg addressed the elephant in the room: “Everyone had been too greedy,” she said, “and everyone thought the party was forever.”
The article by Dana Thomas (the author of Deluxe: How Luxury Lost Its Luster goes on to describe the transition of the major design houses from family businesses to conglomerates, as well as the decline in production quality (but not garment prices).
A lot of her criticisms leveled at the fashion industry are fair; however, to say that greed dictates the fashion industry as a whole is inaccurate. Plenty of mom-and-pop boutiques (my own included) have gone out of business in the last two years because they simply couldn’t afford to sell things at or below cost in a sluggish economy anymore. It would seem that government legislation and stringent pricing guidelines set by showrooms and designers are necessary to both reform and keep the fashion industry afloat.
