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Rise of the Recessionistas

Fashion meets frugality as self-confidence, pragmatism drive labels to broad market.

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The luxury sector, which makes up roughly 5 percent of the overall apparel market, is in for “rough sailing” through the end of this year, says retail expert Scott Testa.

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The numbers tell the story, says Mr. Testa, professor of marketing at St. Joseph’s University in Philadelphia. He points to the March 2008 to March 2009 sales figures, which show a 30 percent decline for Neiman Marcus and a 23 percent decline for Saks Fifth Avenue. During the same period, Target declined 6.3 percent and Kohl’s slumped only 4.3 percent. “Given these numbers, it’s clear that shoppers are more willing to spend in a low-cost environment,” he says. “Many top designers are rethinking new ways to put their brand in front of those shoppers.”

As retailers struggle to adapt, companies that help nurture the spirit of fashion independence have done well.

“The genie is out of the bottle,” says Kevin Johnson, CEO of the 10-year-old online shopping portal ebates, which rewards its 8 million members with cash rebates on purchases. Tough times have “been good for us, because people get used to getting good deals and even when the good times return, they won’t go back to paying full price,” Mr. Johnson says.

His site features bloggers with advice and guides to reproducing high-end looks on a shoestring budget. While everyone likes a deal, he adds, “nobody wants to look like they shopped at a bargain basement.”

Color expert Jill Kirsh teaches fashion independence through her guide, which helps people decide what looks good on them, shade by shade, hue by hue. “People flail around, buy too many clothes they never wear, and generally feel confused and helpless about what to buy,” she says, “but it doesn’t have to be that way.” All it takes is the willingness to learn. While her private sessions can be pricey, she has dedicated the free tools on her website (jillkirshcolor.com) to getting out the message that fashion freedom is possible.

Sometimes all it takes is a healthy “aha!” moment, such as the one Ms. Salzman had recently. A self-confessed former Barneys and Bloomingdales regular, she says she was visiting a wealthy friend “who makes 50 times what I do,” she recalls with a hearty laugh. The woman had a “really stylish” pair of shoes. Salzman asked about them, figuring she’d get an inside tip on a hot new designer. Instead, her friend said, “Payless,” the low-cost shoe store. “That was it,” she says. “If I can look like that for pennies, why on earth would I go back to shopping at Barneys?”

Some suggest recession-chic, which makes budget shopping acceptable even in the toniest circles, will go out of style just like any other trend. “People like fashion, and they won’t stop following the trendsetters just because they can get it for cheap,” says Lien Ta, managing editor of Hollywood.com.

Nonetheless, she says, it is striking just how much fashion rules have evolved. Just a few weeks ago, she says, she went to a launch party at Hollywood’s hip Chateau Marmont, with celebs like Sting and Anna Paquin. But this was not for the latest film or even celeb perfume. It was for the latest collection from designer Charlotte Ronson, soon to be appearing on the counters at J.C. Penney.

“Not too long ago,” she adds, “that would have been unthinkable.”