Friday, February 27, 2009

Will premium brands survive the recession?

I think it's safe to say that people are putting off purchases of everything from new plasma TV sets to new surfboards to new houses, and so on. So which brands are bullet proof if any? Obviously there will be reduced inventories as retailers scale back but there seems to be heavy traffic in the movie theaters and lots of people lining up at Starbucks in the morning.

A recent trip to TJ Maxx proved to be an eye opener as the aisles were packed with bargain hunters snapping up $20 jeans that normally retail for around 4100 at Nordstrom. You've got to wonder where al the Circuit City inventory is going to end up? And will it be discounted enough to get people off the couch and buy a new plasma?

I'm thinking that there might be some other great deals to be had other than foreclosed real estate, trucks with V8 engines and over-priced blue jeans. This is a great opportunity for brands like The Gap and Old Navy to reclaim the middle of the road, down to basics, affordable fashion thrown.

I also think that a lot of over extended brands can get back to their roots and focus on why they were relevant in the first place. Consumers will look for deals, but they will also reward innovation and authenticity.

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