According to the Harvard Business Review, Professor David Yermack of the New York University Stern School of Business found that “following 189 public appearances between November 2008 and December 2009, Michelle Obama created $2.7 billion in cumulative abnormal returns — value over and above normal market variations — for fashion and retail companies associated with the clothes she wore.”
Fifth Avenue has traditionally wanted little or nothing to do with the black community — except to have us play our role as conspicuous consumers of their wares — until Michelle Obama sashayed into the White House in all her sophisticated, chocolate-coated glory. Today, clothing designers can’t get enough of the “fashionista-in-chief.“
“Mrs. O” was not the only fashion juggernaut to cause seismic quakes on Fifth Avenue and Rodeo Drive. Former White House social secretary Desiree Rogers was also a sensation who was coveted by the nation’s top designers before her unceremonious ouster earlier this year. It would be nice if Mrs. O would leverage her colossal fashion influence to bequeath some love to more of the top African American designers whose fashion lines would undoubtedly change the game.
Let‘s put it in another perspective. “On average,” the Harvard Business Review article reports, “every time Michelle leaves her home, she creates an average of $14 million in value for the companies that outfit her. These gains created by the Michelle Obama effect have been called abnormal because they are much higher than the 0.5% average gain a company makes when it announces a new celebrity endorser.”
For example: Mrs. Obama mentioned her J. Crew outfit during an appearance on The Tonight Show, and was photographed two months later wearing J. Crew gloves while clutching the Lincoln Bible. The company’s stock soared. The Michelle Obama effect reportedly persisted throughout the following year.
How would the “Mrs. O effect” benefit black fashion designers? Obama mixes the price range of her outfits so that average consumers can copy her style. She wears couture with affordable retail brands that are economically available to the masses. Even if they don’t buy the same items that the Obama wears, traffic into those stores increases exponentially because of their association with the first lady. Interest in the brand could lead them to purchase other items under the Mrs. O effect, resulting in increased earnings.
The very moment Obama flosses the wares of a black designer is the time that designer may be able to retire. –terry shropshire
