The recession has already spawned its own language of buzzwords, as if the right combination of meaningful letters whispered in the consumer's ear will suddenly unlock her wallet: there's "investment" fashion, "green" fashion, the "new vintage." (That one sold out, so perhaps Stefano Pilati's on to something.) "Ethical" fashion. We're told there will be "slow" fashion, to match our slow food. There's the fantasy that we'll all start making our own clothes, and the competing theories that we'll have more of our clothes made in America — or that we'll continue having more made overseas.

What this confusion of language speaks to is the underlying truth that this recession will permanently change the apparel industry — and the profound uncertainties that still cloud what those changes will be. How we dress, how we shop, how we are marketed to, where our clothes come from and who makes them are all up for reconsideration. The propagation of inanities like the concept of "investment" dressing is just evidence that even most industry experts are only grasping at straws, like the rest of us.

Cathy Horyn was asked to speak on fashion and the economy last week at an event for Citi's Women & Co., a $125-a-year members-only women's professional organization run by the bank. Horyn's speech, a "trimmed" version of which she later posted to her blog, and then chased with more thoughts yesterday, amounted to a kind of fashion state of the union.

Horyn gets down to business by assessing the state of fashion before this recession began — and noting how it's different than past periods of economic instability. The downturn of the early 2000s, she argues, barely registered in fashion (in 2001, consumer spending actually increased). The late 90s and the early 2000s, taken together, were a period of remarkable consolidation and expansion in the rag trade. As Horyn explains,

This was the era when luxury groups were being formed — when Saint Laurent sold out to Gucci, when Bernard Arnault hired John Galliano and Marc Jacobs to shake up Dior and Vuitton respectively, when Prada made a bid for global power by buying Jil Sander and Helmut Lang, and when PPR eventually took control of Gucci...This shift from a largely craft-based, family-owned culture to a brand management culture mirrored what was happening in the financial markets, in the explosion in the art markets, and the excitement surrounding new architecture, particularly in countries like China and Dubai. Dress codes and divisions of all kinds have been breaking down for years — we scarcely notice when someone mixes high-low elements. But the late 90s and early 2000s saw fashion's ivory tower crumble a little more as designers became ardent marketers — selling the image rather than, in some cases, the clothes. In 2001, Marc Jacobs brought out the Vuitton bag splashed with Stephen Sprouse graffiti. It was followed by the Murakami bag, along with those indelible, digitally enhanced advertising images by the photographers Mert and Marcus. These designs were plainly creative, but the point is these bags were not precious objects. They expressed perfectly the blending of art and commerce, and insolence over elegance — a mood also conveyed in the ironic images of the photographer Juergen Teller, who for more than a decade has created Jacobs' ad campaigns for his own label, including the one of Victoria Beckham as a commoditized celebrity in a shopping bag.

So the recession of 2001 did not throw anyone off the rails.

In many ways, Louis Vuitton is the perfect embodiment of this grading-down of luxury. Until the 80s, Louis Vuitton was just another nice French handbag brand, perhaps known for quality and definitely known for high prices, sure, but not a "fashion" brand with much season-to-season variance, and certainly not a true "luxury" one either. Its coated-canvas monogram wares were widely available and sold in department stores like any other high-end bag; for nearly 20 years, handbags were even made under license for the U.S. market. Then that all changed: Louis Vuitton restricted the sale of its bags to its standalone boutiques, and started aggressively associating its bags with luxury and status through advertising. Naturally, the company raised its prices, which only raised its cachet. But the Speedy 30 that was sold off the shelf at Saks in 1980 is still fundamentally the same bag that runs $700 at Louis Vuitton's own store today. It was a triumph effected with marketing and precious little besides; the bags did not noticeably change or actually become more "luxurious" in their trip up from "good brand" to "luxury brand." But we bought them anyway. Now the deal isn't looking so good.

The stock market crash of 1973 and the long period of stagflation that ensued, as Horyn remarks, is a formal pendant for the current economic situation: a Wall St. crisis that spurred a recession in the "real" economy. But within the apparel industry, too much has changed to allow for any direct analogy between then and now:

In the mid 70[s], fashion was also a relatively small, familial world, with manufacturers forming relationships with stores through expert buyers, and styles evolving slowly. In 1975, a widely popular style was the quilted Chinese jacket, no doubt influenced by the opening of diplomatic relations with China. I am reminded of a conversation I had years ago with the comic Sandra Bernhard, who told me that when she began to do stand-up, she would include as part of her act a reading from Women's Wear Daily's pages. That's how strange and remote the fashion world seemed — those socialite names sounded exotic. By contrast, in the past decade, fashion has become a marketing tool for all kinds of non-fashion products, from stylish cell phones to boutique hotels. And, for better or worse, it has transformed urban neighborhoods, like the Meatpacking District in New York or South Congress Avenue in Austin, Texas.

So what is next? And what are the issues on the table, according to Horyn?

[T]his recession is different. Just about every luxury group and upscale retail chain has reported declines, and no category, with the exception perhaps of watches, is performing very well. Private investment in fashion companies is virtually non-existent, and there is very little acquisition activity. Of course, part of the problem is over-capacity — there's just too much stuff around.

That's not strictly true; certain luxury categories are performing well. Hermès leather goods division — the sector of the company that sells $50,000 crocodile handbags with a three-year waiting list — experienced a 21.7% jump in sales during the first quarter of this year. (It's the expensive but comparatively lower-priced goods, like watches and perfumes, that aren't doing so well for the French brand.) But other luxury companies are deeply troubled. Harry Winston and Tiffany's both just released quarterly results that were marked by steep losses.

Horyn sees the industry facing challenges along two primary axes. For one, there will continue to be steep growth in consumer spending in emerging markets, like Asia and South America — especially at the high end of the retail continuum. While the recession might be stalling luxury spending in Japan, it won't stop growth in China and India. It can't. At the couture shows in Paris this January, the happiest man around was the consultant who helps introduce wealthy Indian women to the designers and advises them on which pieces to buy. (And by "piece," we are talking here of $75,000 dresses.) These consumers will be predominantly under 35, and they will want "real" luxury — not $4,000 Prada it-bags that only hold any allure for a season. There's a reason they're going to the Paris couture collections.

As for the rest of us? Horyn thinks the designers that will be successful over the coming years and after the recession will be those who cast off "history-minded" dressing and think instead of, wait for it, the future.

It involves thinking of the consequences of technology, and relating these changes more imaginatively to how we dress, how we shop — the design of stores, the potential of online magazines and stores. A "sartorial consciousness," to use Quentin Bell's term, is not limited to moral indignation; it also applies to the raw materials, the energy sources, and labor practices used in making a garment. "Green fashion" will become more and more important, and young consumers in particular will expect to see innovation and experimentation in this area — the kind they see in proposals for wind-powered skyscrapers and carbon-free transportation systems. Indeed, I am somewhat surprised that a big luxury group has not had the foresight to create a separate eco-brand of high-quality garments, with a casual yet sophisticated aesthetic. We've seen a number of niche labels, but not one that draws on the brand power and advertising reach of a luxury group.

Perhaps that's exactly what LVMH is thinking in acquiring Edun, and bringing its tremendous marketing resources and distribution network to bear on the organic cotton, sustainably-made fashion line.

Horyn's closing remarks I'll give in full:

a great many people in the fashion world would share the photographer Horst's view that "fashion is a universe full of art and excess where no one thought of the outside world," even though that statement was made about the late 1930s. This may be why many designers do not know how to fully relate the Internet to fashion — imaginatively. I mean only that it took radio roughly 40 years to reach 50 million people, while it took the Internet just 4 years to reach the same number of people.
This is the dynamic that fashion must embrace in the coming years in order to be truly creative and relevant. It's great to talk about "slow fashion" and the value of handcraft in informing our imagination. These qualities will still be important, as Paris is, but imagine the other system of thought that revolts and finally breaks free of the old world.

If that's the future of fashion, I want to be there to see it. Provided it costs less than $700 for a canvas bag.

The Bigger Picture [On The Runway]
Bic Pic: Further Thoughts [On The Runway]

Related:
Green Fashion: Is It More Than Marketing Hype? [Fast Company]
Pilati Unveils YSL "New Vintage" At Barneys [WWD]
Rethinking Outsourcing In The Recession [Forbes]
Apparel Import Slump: U.S. Importing Much Less Clothing Because Of The Recession [South Florida Sun-Sentinel]
Dress For Less And Less [NY Times]
In The Bag: how Hermès Beats The Recession [ABC News]
LVMH Near A Big Stake In Bono Firm [WSJ]

Earlier:
"Investing" In Your Closet Not Recommended By Actual Investment Experts
New York Times Bets Against Anna Wintour, American Vogue

• Rumor has it that Jessica Biel's gonna be designing bags for squeeze Justin Timberlake's William Rast line. "Sources say she has already started sketching designs for a limited edition collection. Isn't it a coincidence how much hidden design talent there is in Hollywood? [Daily Express]
• "In times of uncertainty, I think the wrap dress becomes an even more important friend. It's flattering. And wrapping is a reassuring thing." Why yes, it is, Diane Von Furstenberg! [Newsweek]
• Naomi Campbell is doing a duet and music video with Indian star Ashkay Kumar - in Hindi. [VogueUK]
• Apparently Manolo Blahnik can take or leave Sex And The City. He's never seen it! [New York Post]

• Karl Lagerfeld unveiled the Christmas windows of Paris store Printemps, which feature "a fantasy troupe of articulated puppets named Coco frolicking in a garden of golden flowers." [WWD]
• "Each puppet is stylishly attired in a modern, almost space age take on the classic quilted Chanel suit and every puppet has Mademoiselle Chanel's iconic blunt fringed bob." [ElleUK]
• Speaking of moddles named Coco: "Not so long ago, Rocha was just your average Irish-dancing, nature-loving Canadian teenager." [WWD]
• "The first order of business for the new president will no doubt be to get America to hitch up its pants and give the economy a kick-start. It will be interesting to see if he can also get America to hitch up its pants, period." [NY Times]
• Breaking! "This week has seen Agyness Deyn on a fashion rollercoaster channelling a different trend or decade every day." [ElleUK]
• Cosmetics company Carol's Daughter will help address the severe shortage of celeb fragrances with "My Life by Mary J Blige." [WWD]
• Following K-Mart's example, Sears brings back layaway. Which, sadly, requires far too much foresight for the average holiday shopper.[AdAge]
• L'Oreal announces winners for the 11th annual L’Oréal-UNESCO Awards for Women in Science. [WWD]
• Oscar de la Renta's house is really nice. [Style.com]
• Jennifer Vendetti may be the one to discover the rest of us! "The New York casting director is known in the industry for her rare eye for finding the imperfect, but captivating, beauty in everyday people." [W]
• Check it: Hayden Hartnett's line for Target. Dig the umbrella. [Racked]
• Rachel Bilson's "style obsessions" apparently include Kobo candles, her own line. [Cosmopolitan]
• These "just douche it" ads are intended/likely to piss off Nike. [AdRants]
• Fashion darlings Rodarte win Swiss textile award. [WWD]
• Feminists, Catholics aren't thrilled about Boston College's Victoria's Secret collaboration. [UPI]
• Newsweek discovers that redefining our fashion priorities, recessionista-style, could be a good thing. [Newsweek]
• Modelinia, the new all-moddles-all-the-time site, is gearing up. [Fashionista]
• More on Helmut Lang's bizarre collaboration with Absolut, which is allegedly about "experiencing art" in new ways. Drunk? [BlackBook]
• New book on secret rebel Geoffrey Beene. "On the outside, the bespectacled, bow-tied Southerner appeared uptight and WASPy, but he was an enthusiastic early adapter of cheap chic (launching his lower-priced Beene Bag sportswear collection in 1971) and the promise of the Internet." We do like our contradictions! [Los Angeles Times]
• Kohl's and Nordstrom pessimistically cut their outlooks. [Reuters]
• Ouch, and Abercrombie's really hurting. [The Street]
• Get me Demarchelier! The legendary lensman started small: "I was 17 and living in Le Havre when my stepfather offered me a camera. I got hooked instantly. I learned the art of photography working in a small shop there, taking passport and wedding photos." [WSJ]
• Jay McCarroll hates the spotlight. Kinda. "But I guess the more I stand there and the more someone notices and writes, then I can have a beach house...I’m going to get to drinking now, okay?" [Observer]
• Apparently the hemline index is still relevant in Morocco! [Global Voices]

• Keeping alive the fashion industry's carefully-cultivated reputation for bitchy pettiness, current Yves Saint Laurent creative director has his former boss Tom Ford in the Times mag: "Tom is talented but not gifted. That's the way he managed the business. Tom would say: 'We can't do this silhouette because she looks fat.' Or, 'Oh, no — women don't like this fabric; we can't use it.' That mentality was something to learn but was so far from my way of thinking." In sum, Ford "didn't challenge women." [WWD]
• How many times does she have to say it? Dita Von Teese is committed to glamor! "People always think I just hang around in jeans or a tracksuit, and I’m like, Well, no. I’m sitting here right now, having just rolled out of bed, wearing a vintage slip. I don’t have any makeup on, my hair is probably a disaster, but that doesn’t mean I’ll put on jeans and a T-shirt because no one’s looking." [BlackBook]
• In one of the oddest collaborations we've run across this week, model Erin Featherston is teaming up with LU Biscuits, described by Fashionista as "the little crackers with chocolate boys on them." We're "collaborating" with a chocolate-chip muffin right now. [Fashionista]

• If you can't see Helmut Lang's mixed-media sculpture, "Alles Gleich Schwer,"in Germany, you can catch it on the web. We're guessing as conceptual, un-cuddly as his clothes. [Men.Style]
• Don't worry about the environment: fashion is on it! "The Be EcoChic campaign, which raises awareness of environmental issues, is raising its fashion profile on Sept. 4, when it kicks off its global launch with a group runway show at the Museum of Natural History in Manhattan. Designers including Donna Karan, Ralph Rucci, Carmen Marc Valvo, Christian Cota and Vena Cava have contributed looks that feature sustainable, low-impact or recycled fabrics, while women with environmentalist cred — including Mary Richardson, the wife of Riverkeeper’s Robert F. Kennedy Jr., and Laura Turner Seydel, daughter of Ted Turner — will walk in the show." [WWD]
• Normally recession-proof L'Oreal challeneged by the "flare-up in the price of raw materials and energy." [WSJ]
• Apparently being in Japan Fashion Week is really hard. [WWD]
• How hard is it to don silk pajamas? Playboy has launched an online style guide for men. "As it is a patriotic year with the Olympics and an election, I wanted to focus
  the playboy.com fall style guide on an Americana theme," said fashion director Joseph DeAcetis." [WWD]
• If you're wondering why the Project Runway models are always flaking, maybe it's because the gig sucks. Daniel's auf'd model dishes on the unpaid, ten-hour ordeal that is a day in the life. [NY Mag]
• A Canadian retailer has pulled its catalogues after customers complained about the unhealthfully thin models. "Simons department store has pulled its back-to-school catalogue from seven stores in Quebec after complaints the models in the book were too thin. The family owned company, which dates back to the 1840s, received more than 200 complaints from consumers denouncing the rail-thin models wearing the Simons Twik brand." Now if only fashion would take notice... [WWD]
• It seems like these stats are always changing, but as of today, luxury brands scoff at the recession, do brilliantly. [The Guardian]
• Ferragamo did the shoes for Baz Luhrmann's latest spectacle, Australia. Wedges and riding boots play a supporting role in the (possibly ludicrous) epic. '"My grandfather, Salvatore Ferragamo, began his career working in costume design for the American Film Company, a precursor to Twentieth Century Fox, so it is only fitting that we carry on his name and our company's heritage by collaborating once again on a film from Fox," said James Ferragamo. [FabSugar]
• As we know, the solution to all the world's problems lies in celeb-designed T-shirts. Accordingly, Julia Roberts has done one for Armani. '"Julia has helped to create beautiful and unique designs for both women and men, which will be a visible reminder of the part that we can all play in fighting AIDS in Africa,” Armani said.' [WWD]
• Kate Hahn's book Forgotten Fashion will certainly be sold at Anthropologie. "It's deadpan social satire in a tone Hahn describes as 'glamorous dark humor...inspired by things like Edward Gorey and the Limony Snicket series.' In each of the supposedly historic episodes, everything goes wonderfully until some sort of 'regrettable incident or unlucky moment' ends the fun."[Deep Glamour]
• Sports bra sales are up; we suspect this has approximately 0% to do with the Olympics. [The Sun]
• Moschino does some "witty" ballet flats for Repetto. Spoiler: they look like wood grain and have random springs of flowers springing out of them. [VogueUK]
• Ooh! The Daily News brings us "The Top 50 of The NYC Fashion Hierarchy" just in time for Fashion Week! We love to know who's insulting us! [Daily News via Sassybella]

• 2-year old Suri Cruise has custom-made Christian Louboutins, making her the red-soled footwear company's youngest client ever. [NY Post]
  
• "She was a great sport. She agreed to do something rough and tough and quite raw. It wasn't days and days of hair and makeup," says Marc Jacobs of Victoria Beckham's participation in his Spring 2008 advertising campaig [WWD, 1st item]
  
• And in other Posh Spice news, Beckham has also posed in the buff for Jacobs' t-shirt line benefiting skin cancer research. Uh, because she'd rather go naked than protect her skin from harmful UVA rays with one of his crummy T-shirts? Oh wait...huh. [Mirror UK]
  
• Justin Timberlake: Now designing womenswear under the J. Lindeberg label. What qualifies him, you ask? Yeah, we hate obvious punchlines. [Vogue UK]

• The 23-year old fashion boy wonder Esteban Cortazar (whom you may best remember from the person throwing the party for the yacht catering challenge from this season's Top Chef where Howie finally got the boot) has just been tapped as the new head of the Emanuel Ungaro label. This makes us feel really insufficient. [WWD, sub req'd]
• To celebrate record sales, a Taiwanese lingerie company celebrated with a designated day where its female employees were asked to come to work wearing the goods. [Sassybella]
• Moschino has made a plexiglass doll — a plexiglass doll! how cuddly! — to be auctioned off as part of UNICEF's children's AIDS efforts. [Vogue UK, 7th item]
• H&M: Now with even more organic cotton! [FabSugar]
• Not-actually-made-from-seaweed yoga wear line Lululemon's profits tripled in the third fiscal quarter. [WWD, sub req'd]
• In times of economic turmoil and poor consumer sentiment, J. Crew... predicts great holiday sales! God bless America. [WWD, sub req'd]
• Christian Dior cosmetics claim to have harnessed the power of stem cells in creating their new line, making for the swiftest wrinkle repair ever. Could this be the breakthrough that wins over the hearts and minds of the nation's anti-abortion lobby? One can dream! [WWD, sub req'd]