Already changes are happening throughout the industry.

A sign of the times: For his fall 2009 runway show, designer Graeme Black switched up his front-row lineup. He invited personal shoppers from stores such as Browns in London so they could see the collection firsthand. "The only way we're going to move forward is to connect directly with the customer," said Jonathan Reed, Black's business partner.

The Price-Value Game

Price is a function of how much shoppers are willing to pay for something, while value is a gauge of something's intrinsic worth.

It's a distinction that sometimes gets forgotten.

For example, Gap Inc.'s Old Navy unit faltered after focusing on relatively inexpensive basics without much fashion, said Christine Chen, principal, equity research specialty retail, apparel analyst.

And the stakes are higher than ever.

"In this environment, we are going to continue to see a bigger separation between those who are doing well and those who are not doing well," Chen said. "But everyone is going to suffer."

This puts designer and discounter in the same boat.

"As money becomes a critical issue, clients will become more cynical with regard to how they spend it," said Inacio Ribeiro, co-designer of ready-to-wear label Clements Ribeiro.

"The consumer is so well-informed today, they don't want to be told how to buy and they feel conned and manipulated by big flagship stores, and by the disproportionate margins the brands are making," Ribeiro said. "However, the consumer will welcome suggestions, and that is the way forward."

Fashion's reliance on ever-lower prices failed last fall, as sale signs shouting 60, 70 and 80 percent off attested. Value is making a comeback across the price spectrum.

"In all of our businesses at every single level, we have been focusing on value," said Tom Murry, president and CEO of Calvin Klein Inc. "The consumer is responding to great product, but it has to represent good intrinsic value. Even at our designer level, we have men's suits now at $1,095, and it used to open at around $1,600. Those suits are selling well at full price."

Last fall's price drops were so severe that suppliers from every corner of the industry are hoping retailers can hold their prices, even if they start at a lower level.

But that doesn't mean brands are trimming their price tags simply for the benefit of retail bottom lines.

Stores tried to extract sharper pricing from designers after the fall runway shows in Paris and Milan, but major houses such as Chanel, Prada, and Versace were holding the line.

Prices could be heading down for some time.

"Deflation is here to stay," said William Fung, global managing director of Li & Fung Ltd. The sourcing giant is budgeting for a flat 2009 as its customers are predicting 10 to 20 percent decreases in sales. However appealing the notion of deflation might be for consumers, it's bad for business. Profit margins are squeezed between fewer dollars flowing into the till on one hand, and the cost to make and market goods on the other hand.

Offering more value seems to be a way through.

"We have to get back to creating innovative product, concepts, and merchandising ideas to stimulate and energize the customer," said Andrew Rosen, president and co-founder of Theory. "You just can't get away with making clothes and expecting them to sell. You have to be good at what you do. Clothing is not just a status symbol anymore. There has to be a sense of relevancy to it."

The New Society

Kenneth Cole, who has long linked his brand to awareness of social issues, might find his marketing niche filled with more voices.

The fashion crowd, already in tune with myriad social concerns from women's issues to advocacy for AIDS research, might become even more active as the culture pays more attention to causes.

Donna Karan, for example, is trying to convey a sense of social consciousness through her Urban Zen concept.

"What does it mean to buy something?" Karan said. "I think that buying something will no longer just be for yourself. It's buying something with a conscience, how it affects the seamstresses, the fabric people, the manufacturers, the world at large. I think we were in an economy where it was all about ‘what I want,’ but with every purchase, there is a business and how you can make a difference in somebody else's life. If that shift happens, it will all of a sudden awaken the consumer to why they're actually buying something."

Luxury titan Bernard Arnault, chairman and CEO of LVMH Moët Hennessy Louis Vuitton, might also be getting into the eco game.

LVMH is said to have its eye on Edun, the eco-luxury label founded in 2005 by U2 rocker Bono and his wife Ali Hewson. The brand is an attempt to drive sustainable employment in developing economies through the production of organic fashions.

Last month, Arnault demurred when asked about his company's interest in Edun. "It's top secret," he said.

Fifty-five percent of consumers buy organic products, up from 49 percent a year ago, according to survey by WSL Strategic Retail. An increasing number of venues are offering consumers their organic fix. Among the latest: Target's new Loomstate brand is made from certified organic cotton, and Anthropologie will celebrate Earth Day this year with organic chefs and gardening events.

The Global Order

The financial crisis that began with risky mortgages in the U.S. has whipped around the world, making it even harder for retailers and brands to navigate international waters, where consumers and businesses have a rhythm of their own.

The headlong rush to open in developing countries has slowed along with the prospects for growth, said Antony Karabus, CEO of Karabus Management. "The growth rates are nowhere near as available as they were a year or two ago," he said. "It's not to say there are no opportunities. But it's not as obvious and it's not as slam-dunk as it used to be."

Karabus said it has also become harder to tap into the necessary capital to expand and that retailers would become more selective, going after a smaller number of big opportunities. "The execution is much harder in tough times," he said.

Michael Jeffries, chairman and CEO of Abercrombie & Fitch Co., told Wall Street analysts the retailer would continue its overseas expansion.

Abercrombie will cut the ribbon on flagships in Milan and Tokyo this year. Copenhagen will have to wait until next year. The firm also sees opportunity to add more Hollister mall stores in the U.K. "We will continue to approach our international expansion with the discipline that the current environment requires and will proceed at a pace with which we feel comfortable," Jeffries said.

Tiffany & Co. cut its store openings to 13 this year, down from 22 in 2008. But the expansion still has an international flavor. The luxe jeweler has stores planned in Canada and Mexico, as well as seven in the Asia-Pacific area and one in Europe.