New York Fashion Week: The Upside Of The Weak Dollar

Yes, the economy is stagnating. And yes, even rich people are nervous about spending money. But is it all bad news for U.S. designers? Maybe not. Several of the big names -- Marc Jacobs, Zac Posen, Oscar de la Renta -- do some if not all of their manufacturing in America. Yes, really. That means that their costs are significantly lower than the brands that have to manufacture in Europe. (Bearing in mind that almost all the luxury brands buy their fabrics in Italy, in euros.) As retailers from across the world sit in showrooms all over New York this week matching their budgets to their orders, it would seem to make sense to stock up on the U.S. names. Earlier in the week, we spoke to some of the experts in New York to find out what, if any, was the upside to the weak dollar. They were, Alex Bolen, the C.E.O. of Oscar de la Renta, Robert Burke who runs his own consultancy and formerly was the fashion director at Bergdorf Goodman and analyst Dana Tesley. I knew that the influx of foreign shoppers helped prop up pre-Christmas sales, but I didn't know it propped them up so much that Oscar de la Renta is now considering opening on Sundays. (His traditional American customers shop during the week, after those famous lunches, natch.) You can see the video here. During the week, I've been grilling everyone I can on the subject. The head of men's wear at a major U.S. department store chain who didn't want to be named, told me that he was buying more from American brands for the reason I suspected -- they are cheap in comparison to the imports. But Averyl Oates, the buying director at Harvey Nichols, said it wasn't straight forward from her perspective. When she buys U.S. brands, like Marc Jacobs, Donna Karan and Diane Von Furstenberg, she buys them from their showrooms in Milan in euros. She did the math on her buys and found she buys 50 percent of her stock in pounds, 40 percent in euros and only 10 percent in dollars. And since the euro has been gaining against the pound, those companies are all about 20 percent more expensive for her than they were before. But then we got stuck. If the U.S. brands are manufacturing in dollars and selling in euro where is the excess going? Are they making money on the exchange rate? Or am I missing a trick. To be honest, I don't know. And she doesn't know. But there are two days left of shows and mingling, so I'll try to find out. □