We’ve all heard about the “hemline index”—the theory presented by economist George Taylor in 1926 that skirt hemlines rise and fall with the economy. The prediction for this fall is hemlines will fall to calf-length.

The fashion industry has been frantic and fraught with hand-wringing the past three years in light of the economic recession. So-called “aspirational shoppers”—people who spent big bucks to buy everything from thousand-dollar Louis Vuitton handbags to pricey Prada pantsuits in the late 90s and early 2000s have turned frugal when it comes to fashion. They are making do with old clothes and forgoing the latest “must-have” fashions for budget-friendly attire.

So does all this mean that those aspiring to a career in the already difficult-to-break-into fashion industry should throw in the designer towel? Not necessarily. The factors impacting the industry create a good news/bad news scenario and, if you know how to maneuver around those factors and use them to your advantage, you can still have a career in fashion.

Fashion’s Financial Factors

Four main factors currently impact the viability of the fashion industry and the career outlooks for those hoping to break into this field: Raw material prices, the influence of China, where you live, and a rise in social consumerism. How well you survive a career in fashion depends upon how you are able to navigate around those influences. Let’s take a look at the four factors and how you can best position yourself to thrive in a fashion career, even in a down economy.

1. The fabric of our lives is getting more expensive

With the exception of dramatic price drops in June and July, cotton prices have increased more than 150 percent over the past year and that’s caused shoppers to look for clothing made with less expensive synthetic fibers. The price hikes have been partly the result of increased demand from China, but also because of a decrease in supply: many farmers have converted land once used for cotton production to more lucrative corn and soybean crops.

Thanks to harsh weather in Mongolia last winter that wiped out a quarter of the country’s wool-producing goats, as well as a near-monopoly by China of the rest of the supply, cashmere costs have also skyrocketed.

With the costs of natural fibers increasing, shoppers have switched to less-expensive clothing made with synthetic fibers. So if you’re a budding fashion designer, you may want to focus on creations made from non-natural fibers.

2. The China Syndrome: Creating new markets for retailers even in a down economy

China is fast becoming a power economy and its citizens are transforming from a saving to a spending culture. Rising incomes in that country and an increase in the number of young Chinese millionaires has led to a spike in demand for myriad high-end products, including pricey designer clothes. Some business analysts predict that the emergent middle class in China will ensure a steady demand for high-end fashion for at least the next decade. Louis Vuitton’s biggest customers are Chinese buyers and China represents anywhere from 18 to 28 percent of sales for companies like Swatch, Richemont, and Guicci.

So it’s imperative that aspiring designers network with distributors and retailers who have a strong foothold in China and other Asian countries. If you establish a reputation and foothold now, you’ll be in a good position for the next several years.

3. Location, location, location: It’s not just important in real estate

As with any industry, certain parts of the U.S. are more conducive to success in a fashion career. A U.S. Bureau of Labor Statistics Report in 2009 listed the top ten cities with the highest number and relative concentration of fashion designers. As you might expect, New York, Los Angeles, and San Francisco ranked in the top three. But Seattle came in a very close fourth, followed by Boston, Miami, Atlanta, Denver, Minneapolis and Chicago.

Another study on the fashion and apparel industry in Washington State listed four criteria aspiring fashion designers should look for in a city when deciding where to launch their careers: a high concentration of local designers with international acclaim, locally-based international retailers, top-notch trade schools and college programs geared toward the fashion industry, and a mindset of technical innovation and adaptation. The report posits that the reason Seattle ranked so high on the list is that it hits all four marks.

4. Social Consumerism: The New Fashion Statement

The post-recession shopper is not only more frugal but has a higher social conscience. The rise in what the fashion industry calls “purposeful purchasing”—a willingness to pay a premium for socially-responsible products—has opened up new and lucrative markets for eco-fashion. From all-organic clothing line EDUN started by U2 frontman Bono and his wife Ali Hewson, to organic denim Loomstate jeans that sell for $175, eco-fashion has proven to be sustainable financially as well as environmentally. Buyers realize they don’t have to sacrifice fashion to be socially conscious.

So if you’re looking to weave together a sustainable and lucrative fashion career, you might find the opportunities brought on by the economic downtown to be just the stage you need to launch your career and eventually catapult your designs onto a future catwalk.

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