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Straight to the point. If you sell lingerie you might as well sell lingerie. BlushBerlin.com Via Illegal Advertising.

Because of the harsh economic climate, people are attempting to cut back on expensive extras. But, The Wall Street Journal is reporting that an undercurrent of guilt is pushing some to keep spending, even when they don’t really need certain items and services. A sense of empathy is sweeping over some who know that others are closer to the brink than they are. Instead of donating to charities and food banks, people are choosing to spend their money on those whom they’ve developed close personal relationships with.

Even though her fridge is already full, one lady faithfully spends close to $50.00 a week at a local ethnic market because she likes the family that owns it and knows that they’ve both taken on second jobs to stay in business. Another lady purchased breakfast at a local Starbucks three times a week, running up $80.00 in bills a month simply because she liked the barista. And, another pays $60.00 a month to have a gardener she’s known for 10 years mow her tiny lawn, even though she recently lost thousands of dollars in a personal business.

This handful of individuals might not reflect the entire U.S. but what these people realize is that their communities depend on small businesses (minus the lady that handed over her money to Starbucks) and they treasure the personal interactions that have been cultivated. Behind someone providing a service is a human being and most customers appreciate that more so versus the drone of a faceless corporation.

Our budgets now don’t just reflect the needs of ourselves, but often the needs of others as well. Though, it should be noted that there is also a sense of self-interest that keeps people spending money on everyday luxuries. They know that if they (along with everyone else) stop handing over their money, these businesses might not survive the economic climate and be there to service them when things improve.

The companies and the customers they serve are even more dependent on each other right now. Of course, rationality and personal budgets need to stay in check, but if you have extra money, give some thought to where you’re spending it.

The six remaining Virgin Megastores in the U.S. including the Times Square location (probably the single highest volume music store in America) will be closing for good over the next few months, leaving 1,000 people unemployed.

At its peak in 2002, Virgin had 23 stores across the U.S. with $230 million in sales. Virgin’s billionaire founder, Richard Branson sold off the retail chain years ago and it is currently owned by a joint venture of real estate companies. Though CD sales are down (they fell by a staggering 20% between 2007 and 2008), the stores are being liquidated because their owners think that they can make way more money off of the sale of the property than CD sales.

And, what will be taking over the prime Times Square real estate? None other than the cheap chic apparel chain, Forever 21. The shuttering of these six stores really does signal the end of an era. The brick and mortar music retailers as we once knew them are nearly dead.

In an attempt to boost its lagging profits, Starbucks has developed an instant coffee called Via. According to the Starbucks press release, it is being touted as “a transformational instant coffee that replicates the body and flavor of Starbucks coffee in an instant form.” 

Via is supposed to recreate the Starbucks experience at home or on the go while costing slightly less than a Tall cup of their regular coffee. The company has high hopes for its launch since instant coffee represents 40 percent of all worldwide coffee sales (that translates to $17 billion dollars).

According to Starbucks, Via has been an idea that they’ve toyed with way before the current recession. “We have worked for nearly 20 years to develop an instant coffee that offers customers the quality and taste they expect from fresh-brewed Starbucks coffee, and a unique and convenient way for them to enjoy it,” said Starbucks’ Howard Schultz.

Starbucks may have a fantastic product on its hands, but they are overlooking one key principle: most of Starbucks’ die hard customers frequent its shops for the experience. Starbucks has done an amazing job of branding their stores and creating a warm, inviting atmosphere coupled with great customer service. The folks that frequent their shops love having the ability to customize their drinks in ridiculous ways. It remains to be seen if a packet of instant coffee can live up to the hype.

Conspicuous consumption has drifted away as consumers shift their incomes to necessities in these dreary economic times. Overall, U.S. retailers are reporting that January 2009 sales are down 9.5% when compared with the same period the year before.

All the same, it seems that we haven’t completely given up on shopping altogether. Forbes.com is reporting that there are 10 key stores that Americans can’t live without.

Notably, the list includes Urban Outfitters. For the most part, 20-something hipsters will find a way to shop no matter what and Urban has a unique edge by not mimicking every other mall chain store. Each location boasts a product mix that is often tailored towards regional trends. Sales have increased 22.8% over the last year.

On the luxury front, Hermes (where handbags can retail for upwards of $5,000) isn’t for everyone’s budget. Though to Hermes credit, it is known for quality, timeless designs. Many who can afford the price points would rather invest in one quality piece that will last for years instead of a handful of lower-priced, trendier items from brands like Coach (which is doing terribly).

On the electronics front, Amazon.com has held up well. The massive selection, free shipping and low prices have all contributed to its success. Amazon has prospered partly because they were smart in the beginning and built a sense of community with customer reviews and pushed the Site Recommendation Tool (which recommends items based on customer’s past purchases).

Other flourishing retailers include American Apparel (now the largest apparel manufacturer in the U.S.), Walmart and J. Crew (thanks to the free publicity via the Obamas).

The secret to these retailer’s continuing success relies heavily on differentiation, whether it be through service, product offerings, price points or ease of use. Additionally, many (namely Urban, American Apparel and Hermes) continue to offer items that consumers can’t get at every other chain store. Getting consumers to part with their hard earned money right now means offering a unique experience that they can’t get anywhere else.

For New York Fashion Week, at least half of the 200 labels that are showing have been around less than 10 years, with a quarter being less than five years old.

Though, the seemingly endless wave of fresh and brilliant new fashion talent may be slowing down. The economic downturn has many stores cutting fall orders by an average of 20% and smaller designers without financial backing are bracing for a turbulent year.

The New York Times reports that the fallout could be even more severe after Fashion Week has wrapped. Once the fall orders have been placed, it will be clear who survives (and who does not). The more stores that close, the more labels will fold.

In these trying times, designers are feeling the burden of small stores and boutiques who are taking twice or even three times as long to pay for their orders. Even worse, some stores that have gone out of business are leaving behind clothes that were ordered and produced, but never paid for.

To cut corners this year, designers are upping cost-cutting measures that include bypassing runway shows for more intimate showroom gatherings, using fabrics stockpiled from previous seasons and sharing pattern makers. The cuts and closures are mounting with no end in sight….

Kim Gordon via The NY Times

The original queen of indie cool and and member of both Sonic Youth and Free Kitten, Kim Gordon is back on the fashion scene with a new line called Mirror / Dash. The clothing will debut exclusively at Urban Outfitters on February 16th.

Of the line, Gordon says that “The challenge for us is doing something that’s not strictly Urban (Outfitters) in that we want it to appeal to someone a little older than a teenager or college student, but still have enough youth appeal to belong in the store.” Her focus is on creating solid basics that are timeless and flattering with an image of 60s era Francoise Hardy in mind.

No doubt that she’ll succeed since she’s paired up with friend Melinda Wansbrough and fashion veteran Jeffrey Monteiro, who has worked with Jane Mayle, Derek Lam and Sari Gueron.

Some people just aren’t shopping at all and it has nothing to do with the recession. GOOD Magazine has just profiled five groups of anti-consumers that includes:

1. The Amish: With an estimated population of 232,000, they have a strong commitment to simplicity that includes traveling by horse and buggy, sewing their own clothing and cooking on wood-fired stoves.

2. No Impact Man: Blogger Colin Beavan has vowed to produce no trash whatsoever. Even more amazingly, he pulls this off in New York City with his wife and daughter in tow. A life without toilet paper sounds challenging….

3. The Church of Stop Shopping: 20,000 members strong, the church has members in every continent but Antarctica. They have vowed to do anything to stop ‘The Shopocalypse’ including marching down Disneyland’s Main Street and even releasing a documentary called What Would Jesus Buy?

4. The Compact: A group of friends from San Francisco teamed up and vowed to buy nothing new for an entire year. They allowed themselves to buy food, health and safety items (and underwear), but everything else was off-limits. Now close to 10,000 people strong, The Compact hosts monthly meetings.

5. Freegans: Most freegans are middle-class and well-educated, but choose to dumpster dive instead of contributing to an economic system that holds profits above everything else.

Read more on these groups here.

The Gap’s New York City concept store on 5th Avenue is adding a pop up shop of merchandise including t-shirts in an array of Pantone shades. Additionally, Pantone office supplies, books and accessories will also be available. Hurry up though because the shop will only be open through February 18th!

A few years ago, a nonprofit group called the Center for a New American Dream conducted a poll in which 81% of respondents felt that Americans were too focused on shopping and spending, while 88% agreed that our nation was too materialistic. And, this year, consumer spending declined for the first time since 1991.

In his Consumed article for the Times Magazine, Rob Walker discusses how consumer spending is finally slowing down. The recent decline has many people assuming that there is a direct relation to a new focus on personal values. Some observers feel that since people are buying less, they must be searching for a deeper meaning in life beyond the spoils of material goods.

Instead, Walker argues that it’s way too convenient to conclude that consumers have suddenly morphed into thoughtful, frugal shoppers with redefined values. He conveniently points out that at the same time spending shrunk, access to easy credit also evaporated. Home equity loans and the barrage of low interest credit cards have dramatically decreased; could this be partially responsible for the decline?

While it’s true that more consumers are bargain hunting, they’re still buying stuff. And, if they seem to be spending less, it’s probably related to fear over the volatile market, not because they’ve shifted into a more frugal mindset.

Instead of frequenting the usual high-end haunts of Saks and Bergdorf’s, shoppers are now hitting invitation-only events, private showrooms and even soirees in their friend’s houses to get their shopping fixes. People don’t want to be spotted in public buying mounds of luxury goods during these harsh economic times; they’d much prefer to be stealth about it.

Besides just shopping without the glaring eyes and guilt, women are also loving the influx of invitation-only events because they’re getting a chance to gossip and catch up with friends while spending money. A trick of many of these multi-day events is to donate a small percentage of proceeds to a charity organization, which further encourages spending without the guilt.

Even more discreet shoppers have turned their attention to the web, scouring Ebay and other high-end sites for discounted designer deals. Even with the gloomy economic outlook, there’s no doubt that major shopping is still taking place. It’s just that this time around, the goal is to not be seen or heard.

Photo courtesy of The NY Times

According to the NY Times, even luxury goods are not exempt from the faltering economy. High-end Fifth Avenue department stores including Bergdorf Goodman are luring in shoppers with enticingly deep discounts. Customers are now digging though designer handbags on tables with prices slashed upwards of 40%. The New Yorker’s Patricia Marx has even remarked that “Sixty percent off is the new black.”

Surprisingly, established luxury retailer Saks dug even deeper than its competitors, dropping the prices of much of its fall fashion up to 70 percent. Customers were so shocked that they assumed that many of the price tags were misprints.

A just released MasterCard Advisors report lists luxury goods sales as being of nearly 25% off this year when compared with last. The era revolving around the endless drive towards high-end consumption appears to be drying up fast.

The NY Times raises the question that everyone is pondering: With such deep discounts on luxury goods, consumers are left wondering what the astronomical mark-ups were in the past. And, now that they’ve witnessed these bargain basement prices, will they be willing to pay full price ever again?

With hard economic times now resonating worldwide, it was only a matter of time before online luxury retailers like Net-a-Porter had to adjust their marketing strategy. Before the recession, the goal was to sell unapologetically expensive designer clothing shipped in glamorous black boxes. Now, a new mass email features a photo of two 50’s era women sharing a secret with the headline of “You’ve Been Shopping – We Won’t Tell…” The subtext cheekily reads “Your items will arrive in an unbranded recycled brown paper bag and we’ll be the only ones who know.”

This newfound move towards more discretional shopping is in part due to the guilt complex with buying a piece of designer apparel that easily runs upwards of a few thousand dollars while many people are struggling to make ends meet. Conspicuous consumption is now a dirty word.

Even though consumer confidence has fallen to its lowest level in 40 years, a small percentage of the population wants to keep on shopping. They just don’t want family, neighbors and coworkers to know about it.

Now here’s a very simple and concrete way to save some trees…sign up to stop the unwanted delivery of the Yellow and White pages. Here’s the link, it takes about 30 seconds..

On Tuesday, hope for a bailout on behalf of the Big Three automakers faded even further. Democratic congressional leaders chastised the CEOs for failing to convince them that a $25 billion bailout would be well-spent and gave them a set timetable of 12 days to prove otherwise.

This point was made glaringly obvious when Sentator majority leader Harry Reid called attention to the three CEOs for each flying into Washington separately on private corporate jets.

“There’s a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hands,” Democatic representative Gary L. Ackerman said. “It’s almost like seeing a guy show up at the soup kitchen in high-hat and tuxedo. I mean, couldn’t you all have downgraded to first class or jet-pooled or something to get here?”

If any of these CEOs had any common sense, they would have chatted with Guy Kawasaki beforehand about proper etiquette in this sensitive situation.

In The Art of Laying People Off, rule #6 is Share the pain:

When people around you are losing their jobs, you can share the pain, too. Cut your pay. In fact, the higher the employee, the bigger the percentage of pay reduction. Take a smaller office. Turn in the company car. Reassign your personal assistant to a revenue-generating position. Fly coach. Stay in motels. Sell the boxseat tickets to the ball game. Give your 30-inch flat-panel display to a programmer who could use it to debug faster. Do something, however symbolic.

In layman’s terms, flying to meetings (no matter how important) in a private jet to ask for billions of dollars just makes you look like a total ass. As Dana Milbank says, “There are 24 daily nonstop flights from Detroit to the Washington area. Richard Wagoner, Alan Mulally and Robert Nardelli probably should have taken one of them.”

Credit card offers, which were once a dime a dozen are quickly evaporating. Due in part to the nation’s financial crisis, big lenders including Citigroup, Bank of America, American Express and Target are scaling up their requirements for applicants. In the meantime, current cardholders are being hit with shrinking credit scores as their limits are reduced, sometimes without notice.

Even cardholders in good standing may still may be afflicted. Many American Express cardholders have noticed a jump of up to 3% on their interest rates.

Card issuers are aware that their pool of eligible customers is rapidly evaporating. According to research analyst Lisa Hronek, “People are completely maxed out with mortgages, home equity lines and credit card debt.” With the lure of quick credit gone, consumers are unable to keep transferring balances from one low interest card to the next.

There is one upside to the credit crunch, though. The overwhelming amount of junk mail for credit card offers should begin slowing to just a trickle.

In the current economic state, women who barely thought twice about charging a $1,200 designer purse are now skipping these luxuries and settling for their lower-priced counterparts. According to the NY Times, the movement of purchasing thriftier fashions has been coined recession chic. Women like price-conscious shopper Mary Hall have added a spin on the term and proudly declare themselves recessionistas. Hall has even founded the Recessionista blog, cataloging all the smart buys she comes across.

While the term ‘recession’ is considered unfavorable, embracing recessionista instead is seen as a way to embrace the economic downturn (and to keep on shopping in the process.) Though women are throwing around recessionista in casual banter, lexiconographer Grant Barret is warning us that “it’s kind of permitting consumers to have justification for their spending habits.” In a way, he’s reminding us that there’s something very off-putting about shopping for piles of clothing we don’t need in a shaky economy. Writer Lauren Sandler asks “Do women in today’s economy want to confront pages of $1,000 shoes when they are struggling to pay the rent?” Yet, without shopping, many designers and retailers will falter.

In the meantime, The NY Times reminds us that as catchy as recessionista seems, if the economy worsens, it may be replaced with…depressionista.

Moët and Chandon, the producer of luxurious champagne is releasing Midnight Gold, a handmade champagne cooler. This limited edition gold lambskin case (100 pieces) is decorated with the finest Swarovski crystals and pearls. The gilded masterpiece is topped with a gold stopper and the attached necktie can double as a bracelet. Isn’t overwhelming excess so last year?