Michelle Obama's $3 Billion Dollar Fashion Babe

From the Week's article entitled, "Michelle Obama's $3 billion fashion 'effect' ," posted on October 28, 2010, at 11:32 AM, states that "according to a new study, the first lady, and her chic choices, are moving markets."

Talk about an economic stimulus package. According to a new study, First Lady Michelle Obama is having a profound and profitable effect on some lucky clothing retailers. . . . Here, a brief guide to the findings:

How can Mrs. Obama help sell clothes?

By wearing them. David Yermack, a business and finance professor at New York University's Stern School, looked at 29 clothing companies whose garments Michelle Obama wore in 189 public appearances between November 2008 and December 2009. Their stock prices typically jumped by 2 to 3 percent — and when the first lady wore J. Crew on "The Tonight Show" in October 2008, the company's stock price climbed 25 percent in the next three days. Such increases that "cannot be attributed to normal market variations," says Yermack.

How much money do the companies make?
Yermack reckons that, on average, an appearance by Michelle Obama in a company's clothes is worth $14 million. The total boost for all of the appearances examined in the study — a whopping $2.7 billion. Designer Naeem Khan found out first hand about the first lady's influence when she wore one of his outfits to a state dinner in February 2009. "My stuff is flying out of stores," the designer says. "It's the gift that doesn't stop giving."

How does the effect last?

"The stock price gains persist days after an outfit is worn and in some cases even trend slightly higher three weeks later," says Yermack. Some clothing companies, likes Saks, appear to have experienced long-term gains. And the effect persists regardless of how President Obama is doing. "Her husband’s approval rating appears to have no effect on the returns," says Yermack. Or, as Marni Katz puts it at NBC New York, "even when his approval ratings are down, Mrs. Obama's style score soars."

Are any other celebrities having a similar effect?

"None that I can find," says Yermack. "Once in a while there is someone in politics, Princess Diana, Jacqueline Onassis, come to mind, who just build a very big allegiance among the public and they get celebrated for their sense of style and fashion." France's First Lady, Carla Bruni Sarkozy, is also iconic and stylish, but she only wears one designer: Dior.

What is it about Michelle Obama?

Part of Obama's appeal, and the strength of her effect, is that she mixes high and low fashion, carrying off J. Crew and couture equally well. "She has very consciously tried to wear garments from mid-market retail chains where many voters also would have shopped, and she's talked about that very openly," Yermack says. She's also "recognized by consumers as authentic" — unlike a starlet who might be known to have an endorsement deal or get freebies from a certain designer. And, theorizes Naomi Attwood at Grazia Daily, there's her body type. While she's "gorgeous," Obama "doesn't look like a typical fashion plate, waify clothes horse, therefore people identify with her and believe 'if it works on her..."



Sources: Harvard Business Review, BBC World Service, NBC New York, Grazia Daily, The Independent, Investor Place

Oscar de la Renta Embarrasses First Lady Laura Bush

Oscar de la Renta whines about First Lady Michelle Obama's stunning British-designed Alexander McQueen dress that she wore to the State Dinner, "Why do you wear European clothes?"

According to the Huffington Post, Oscar de le Renta told WWD, "My understanding is that the visit was to promote American-Chinese trade -- American products in China and Chinese products in America. Why do you wear European clothes?" adding, "I'm not talking about my clothes, my business. I'm old, and I don't need it. But there are a lot of young people, very talented people here who do."

De la Renta made similar comments in April 2009, right after the first lady visited London. He told WWD at the time:

"American fashion right now is struggling. I think I understand what [Obama and her advisers] are doing, but I don't think that is the right message at this particular point....I don't object to the fact that Mrs. Obama is wearing J. Crew to whatever because the diversity of America is what makes this country great. But there are a lot of great designers out there. I think it's wrong to go in one direction only."

In the same article, he also knocked the outfit Michelle wore to meet Queen Elizabeth, remarking, "You don't...go to Buckingham Palace in a sweater."

Let's flashback to December of 2006, when Oscar de la Renta's dress made the Official White House Holiday card . . .

People Magazine writes, "Imagine spending $8,500 on a beaded Oscar de la Renta gown to wear to an exclusive White House holiday reception and then arriving to find three other women wearing the same dress. Now, imagine that you’re the First Lady who has found herself in the middle of a real-life, four-way fashion faceoff! "

That’s what happened to Laura Bush at a Dec. 3 event at the White House. Luckily, she able to sneak off upstairs mid-party to change into a new dress.

Susan Whitson, Press Secretary to Mrs. Bush, tells PEOPLE: “Though Mrs. Bush has seen guests at the White House wearing dresses she herself owns, this was the first identical dress-to-dress encounter she has had.

She and the President found it quite amusing that Mrs. Bush and three other ladies had on the same gown at the same event.” If only all Fashion Faceoffs could be solved with a quick run upstairs! (source: People Magazine. 8 December 2006)

"Why do you wear European clothes?"... Perhaps First Lady Obama doesn't want to be humiliated like First Lady Laura Bush was by wearing a matronly, off-the-rack Oscar de la Renta's gowns.