Case Study Part 2 Teen-Star Fashions With many popular brands of teen fashion on the market, Hilary Duff’s designs face stiff competition. So, Duff chose to design for her established target market, tweens, offering velour skirts, lace-front t-shirts, and preppy-punk jeans. In addition, the Texas-born star promoted her clothing and accessories in the United States as well as Canada. Stuff by Hilary Duff struck a deal with America’s Target stores, where her fashions are proceed to fit the budgets of “tweenage” girls and their families. The Canadian chain Zellers also picked up her fashions. Zellers’ president and COO Thomas Haig explained, “The Stuff by Hilary Duff collection is sure to be a hit with our younger customers, not to mention parents looking for good value.” With the right target market, designs, pricing, and international retailers, Duff’s fashions were wildly successful just a year after hitting the stores. ANALYZE and WRITE 1. Explain how Stuff by Hilary Duff has contributed to the globalization of fashion. 2. Explain how the principles of supply and demand apply to how Stuff is priced.

CHAPTER 3.2 Fashion and Economics

Impact on Global Economy  Globalization – increasing integration of the world economy.  Figure 3.2  Global Competition

The Balance of Trade  Trade involves imports, exports, and exchanges of money.  Imports – goods that come into a country from foreign sources or goods that a county buys from other countries.  Exports – goods that a country sends to a foreign source or goods that a country sells to other countries.  Balance of Trade – relationship between a country’s imports and exports, and it affects the economic health of a country.  Trade deficit occurs when a country imports more goods than it exports. (The US has a large trade deficit, which includes many textile and apparel products that are imported into the country.)  Trade surplus occurs when a country sells more goods to other countries than it buys. (Japan is one country that has a trade surplus.)

Trade Agreements and Restrictions  Free trade exists when a government allows products to move freely across its borders.  NAFTA (North American Free Trade Agreement  WTO (World Trade Organization

Impact on Domestic Economy  Textile Industry Impact  Textile Industry Issues

Supply and Demand  The law of supply and demand affects pricing in the fashion industry as in other industries.  The relationship of these two factors results in the process people are will to pay for various products producers are willing to make.  Supply is the quantity of product offered for sale at all possible prices.  Demand is the consumer’s willingness and ability to buy and/or use products.  The interaction of supply and demand creates the conditions of surplus, shortage, or equilibrium.  Profit is the money a business makes after all costs and expenses are paid.  Trade quotas are the restrictions on the quantity of a particular good or service that a country is allowed to sell or trade.

Quiz 1. How has globalization impacted the fashion industry? 2. What is the difference between supply and demand? 3. Describe the state of employment in the US fashion industry.