How Do Recessions Impact Fashion Trends? Beyond the Hemline Index
Your OOTD (outfit of the day) might be inspired by fashion magazines, viral TikToks, or Instagram influencers, but one sneaky factor influencing your fit that may be surprising is the economy. Even if you are not up-to-date with the stock market, the state of the financial system changes fashion trends, and even your hemline.
You might assume that, in hard economic times, spending time and money on fashion trends would be one of the first expenses cut. But based on spending trends, there’s a lot of evidence that suggests style trends become riskier and more explorative during economic downturns.
Beyond spending, fashion tends to reflect the consumer’s response to economic conditions. Coco Chanel once said, “Fashion is in the sky, in the street. Fashion has to do with ideas, the way we live, what is happening.”
It’s impossible to separate the dominant aesthetics of consumer goods from the economic conditions under which they were created. How we dress speaks to our personal relationship with money.
Fashion-Based Recession Indicators
The Hemline Index
The hemline index theory states that skirt length — aka hemline length— is correlated with market conditions. The theory posited that lengths of skirts can be a predictor of where financial markets are headed, with shorter skirts forecasting good times and longer hemlines signaling a downturn.
In 2010, Marjolein van Baardwijk and Philip Hans Franses published an economic study showing that hemline and market conditions were negatively correlated. Their quantitative analysis looked at hemline data from 1921 to 2009 and found that positive economic conditions were followed by short skirts within the next three to four years.
This is thought to be two-pronged. First, in good economic times, many women wanted to show off their stockings, so they would raise their hemlines. For example, the flappers of the 1920s wore knee-length skirts, the postwar boom of the 1960s brought the new look of mini skirts, and the Great Recession brought back midi and maxi dresses.
Secondly, producers typically charged more for their yarn or textiles in boom times, meaning designers would make skirts shorter to cut costs.
However, the opposite has also been recorded, as longer skirts have signaled prosperity in other periods, such as the 1950s. It’s also important to note that the trend cycle has sped up significantly from the mid-aughts both in fashion and in the economy.
The Great Recession pushed the economy into ease of use, minimalism in design, and direct-to-consumer companies as a way to humanize industry and incite consumers to spend more. This, along with the rise of social media and technological developments has brought a fundamental shift in fashion, economic conditions, and almost every other area of our lives.
The High Heel Index
A consumer products expert at IBM came up with a theory that the height of heels had an inverse correlation with economic growth. Throughout history, this has seemed to be true.
In the 1920s, low-heeled flapper shoes gave way to high-heel pumps and platforms during the Great Depression. In the 1990s, Carrie Bradshaw-esque stilettos took over the previous “grunge” thick heels that were in vogue just as the dot-com bubble burst.
At the height of the financial crisis in 2009, the median height of women’s heels peaked at seven inches. By 2011, that median had dropped all the way to two inches, according to Portfolio.com.
IBM conducted a study of social media posts and other online sources for influencer and consumer references to shoes and boots, then correlated that with a variety of indicators of economic performance. The data revealed that when economic indicators turned down the heel height initially went up, but if the economy remained in a recession state for more than a few months, heel heights went back down.
The Lipstick Index
The lipstick index is a term coined by the chairman of Estée Lauder, Leonard Lauder, to describe increased sales of cosmetics during the early-2000s recession.
Lauder posited that the purchase of cosmetics — lipstick in particular — tended to be inversely correlated to economic health. The theory speculates that women substituted lipstick for more expensive purchases like dresses and shoes during hard economic times.
While lipstick sales in America did increase in the 2001 recession (+11% YoY) and during the Great Depression (+25% YoY), subsequent recessions demonstrated the opposite. During the Great Recession, lipstick sales actually fell along with reduced economic activity, while lipstick sales have also experienced growth during periods of increased economic activity.
As a result, the lipstick index has been discredited as an economic indicator, but the general idea of splurging on more affordable luxuries while cutting back in other areas during recessions held true as seen with the next iterations of the hemline index detailed below.
The Nail Polish Index & More
In the 2010s, many media outlets reported that the rise of nail art as a fad indicated that nail polish could replace lipstick as the main affordable indulgence for women during recessions. Sales of nail polishes and design products grew 65% in the first half of 2008, supporting this theory.
This theory was also noted during the COVID-19 recession when the mandated use of face masks resulted in an increase in eye makeup purchases, suggesting a mascara index. Estée Lauder CEO Fabrizio Freda noted that during COVID-19, the lipstick index was substituted by the moisturizer index as consumers were searching for affordable indulgences while wearing masks and remaining home more.
While many of these indices have not stood the test of time, only remaining true for a single recession, the general sentiment of the theory stands.
Beauty and fashion are not only about keeping up with trends and looking hot, they’re also about feeling good. Consulting firm McKinsey & Company found that purchases of small luxuries (such as nail polish, lipstick, mascara, etc.) increase during economic downturns to support our need for simple pleasures and self-care.
How Recession Impacts Fashion Trends
Beyond hemlines, overall aesthetics tend to be born from the current economic and political landscape they are made in.
In order to keep consumers buying, the fashion world is forced to create a new way of dressing. Creating a new trend, a new silhouette, or a new fad item is a way for the fashion industry to motivate people to buy new things, as opposed to being content with last season’s wardrobe.
Generally, when a country is economically stable, bright and frivolous fashion dominates, while minimalist and practical fashion tend to gain popularity during unstable periods. On the other hand, some observers note the lure of escapism through fashion during economic downturns. Either way, recessions have often seen new patterns of design emerge. Let’s examine those trends:
How the Great Depression Impacted Fashion
After the 1929 Wall Street Crash, clothing and design was shaped with the goal of lifting the US out of economic despair. Corporations were looking for new ways to get customers shopping, so the relatively new industry of mass-produced consumer goods grew. Depression-era industrial design was dominated by sleek shapes, rounded edges, and general streamlined design, characterized by Art Deco.
This is where we begin to see the general trend of recessions leading to minimalism being in vogue, while economic booms make fashion more colorful.
How the 1980s Recession Impacted Fashion
Fashion writer John Duka wrote for the New York Times about how the economic recession of the early 1980s changed consumer behavior in regard to fashion trends.
Duka noted a major shift in the kinds of purchases consumers were making in the US. Consumers were mostly buying three types of clothes: the most expensive stuff like evening wear, more conservative clothes that will last longer, and clothes that are considered “exciting” or fashionable without being too extreme.
The 1980s brought bold neon colors, abstract prints, and the emergence of punk and hip hop fashion. We would then see a resurgence of punk trends following the 2008 crisis with the adoption of indie sleaze.
How The Great Recession Impacted Fashion
The early 2000s were an era of color, maximalism, and, honestly, camp. The era of skirts over flared jeans, layered vests, and monochrome Juicy sweatsuits was then hit by a global recession that left millions without jobs and retailers struggling to keep their doors open.
In the face of economic uncertainty, simplicity and neutrality become safer bets for designers. At the peak of the financial crisis in 2008, black, grey, navy and white dominated fashion shows more than ever. At the same time, the aughts-version of 1980s punk made its comeback with indie sleaze.
After the Great Recession, the worst economic downturn since the Great Depression, startups, as opposed to large corporations, started to offer consumers a new lens for design. Minimalist design and ease of use were top of mind for companies popping up. Consumer lifestyle brands like Warby Parker, Everlane, Stitch Fix, and Dollar Shave Club all emerged from 2010-2011.
COVID-19 Recession and 2022 Fashion Changes
2021 saw an increase in retail spending due to pent-up demand from a year of hunkering down in your own home, also known as revenge spending. Revenge spending refers to the incremental increase in consumer spending after an unprecedented adverse economic event, in this case, COVID-19.
In simpler terms, revenge spending is the urge to spend money to make up for lost time.
However, with inflation rising and an impending recession, retail sales have begun to drop in 2022. When retail spending slows, there are serious ripple effects on the rest of the economy: companies can’t afford to produce or employ workers, workers end up with less money, and in turn, continue to spend less.
But retail spending is not necessarily indicative of fashion trends. Historically, upper-class consumers of luxury goods don’t change their spending habits much during recessions. On the other hand, average buyers tend to halt spending or restrict spending to replacements or pieces that excite them.
Consumer habits during the pandemic were focused on comfort, sustainability, and engagement with social and political issues. Following COVID-19, color began to have a comeback and design veered back into exuberance and opulence as a response to forced frugality and lockdowns.
Do Recessions Spur Minimalism or Maximalism?
It depends on the recession and depends on the consumer, and now as consumers are more digitally connected and have more options for shopping, the variety of trends has also increased. Post-2008 saw both the rise of indie sleaze, a messy blend of ‘90s grunge and ‘80s opulence, and the rise of minimalism.
Generally speaking, recessions have led to experimentation from designers, but that does not always translate to experimentation in the average person’s wardrobe. While exciting styles may bring more consumers to the shop, there are some consumers who will still opt for well-made basics in times of economic hardship.
As our economic situations change, the way we present ourselves changes, both from personal needs and from the need of the fashion industry to revamp sales. Large economic forces shape fashion week trends as consumers adjust their personal style due to inflation or reduced materials.
Most economic recessions have brought their own novel forms of dressing — post-WWII France debuted menswear and structural suits for women, the 1980s brought color and fun, and 2022 has seen the rise of Barbiecore.
Veroniqué Hyland, Fashion Features Director at Elle summarized it aptly: “When times are drab, maximalism seems to be the standard response.”