Michelle Obama: The three billion dollar woman

A New York professor of finance has revealed Mrs Obama's staggering impact on the world of fashion

Harriet Walker
Friday 22 October 2010 00:00

Forget advertising in glossy magazines, gushing celebrity endorsements or the creation of an exclusive, hush-hush cult of desirability. The latest and greatest marketing technique is simple, in theory: get Michelle Obama to wear your clothes.

It's easier said than done, of course – but if you can pull it off, the impact is extraordinary. And now the numerical evidence for something that every brand consultant has known in their bones is in. An analyst at the Stern School of Business in New York has assessed the effect the First Lady brings to the designer labels that she is seen in, and worked out that the total economic benefit that she has brought to her chosen brands is around $2.7 billion (£1.7 billion). Not since Imelda Marcos has a political wardrobe come under so much scrutiny.

The study, published in the Harvard Business Review this week, found that a company's stock experienced an enormous upward spike after Mrs Obama was seen wearing its clothes.

This comes as no surprise to a society of savvy shoppers bombarded with celebrity "get the look" features in every magazine, but the findings speak for themselves. Brands worn by Mrs Obama rose by 2.3 per cent, while those not hanging in her closet were down 0.4 per cent; this is much more significant an effect than any old starlet in a pair of fancy jeans.

Professor of Finance David Yermack cites 189 public appearances between November 2008 and December 2009 in which Mrs Obama wore pieces by 29 listed companies, including Calvin Klein, Nina Ricci, Gap and J.Crew. He estimates that a single appearance by the First Lady can generate up to $14 million alone, either for the label itself or for the chain of shops which stocks it.

One of the biggest success stories is the American retailer J.Crew. In January 2009, the Obamas' two daughters wore coats from the shop to watch their father being sworn in, while their mother clutched his copy of the Lincoln bible, upon which he swore the presidential oaths, in green leather gloved hands, also from the store. The next morning, the gloves section of the J.Crew website had crashed; the entire womenswear site later ceased to function.

Mrs Obama had also worn a head-to-toe J.Crew look for her appearance on The Tonight Show in October 2008 – while steadfastly refusing to comment on Sarah Palin's reported $150,000 spree at designer store Nieman Marcus – and her ensemble was advertised in stores with the slogan "This gets our vote". After a tour of Europe which saw the First Lady in a J.Crew skirt, the die was cast. Within six months, Brits too could buy the label online, from the luxury e-boutique Net A Porter.

Her secret lies in her authenticity – as a figure on the political periphery, she is imbued with an almost moral standing that other figures in the fashion arena are not. Consumers realise that wearing these pieces is not her job, as it is for the models or personalities in the adverts, for example; and that she buys her clothes for the same reasons we do – because they are necessary, comfortable, practical and because she likes the way they look.

The First Lady is also known for her reliable fashion sense, having showcased a variety of pieces that suggest a certain amount of industry knowledge. Not so insider as to put people off, but frostings of designer accessories – a belt by Azzedine Alaia here, a Junya Watanabe cardigan there – all paired with high street items to create the ultimate wardrobe to which the woman in the street can easily aspire.

Professor Yermack's study also considers Mrs Obama's French counterpart, Carla Bruni, who is similarly held up as a style icon among politicians' wives. But Ms Bruni is usually seen in high-end designer labels (Christian Dior's creative director, John Galliano, personally selected her clothes for her recent trip to London), so does not have the same consumer appeal or economic impact at the American First Lady.

Mr Obama has often spoken about how much he relies on his wife; it seems the rest of his country does too, whether it's style advice they're looking for or a fiscal stimulus.

First Lady of fashion

J. Crew, October 2008

Amid criticisms of Sarah Palin's expensive wardrobe during the US presidential campaign, Mrs Obama played up the frugality of her own wear during an appearance on The Tonight Show with Jay Leno. The host asked if she had spent "sixty grand" on a yellow ensemble. "Actually, this is a J. Crew ensemble," she said, adding that she liked internet shopping. "You get some good stuff online... When you don't have time, you've got to click."

Within four days of the show, the company's share price had increased by 25 per cent, according to David Yermack.

Naeem Khan, November 2009

Mrs Obama wore a gold strapless gown designed by Mr Khan at the first White House state dinner in honour of the Indian Prime Minister Manmohan Singh. Mr Khan said that the event had changed his business for the better. "It's the gift that doesn't stop giving. My stuff is flying out of stores," he told The Wall Street Journal. "I love it... Even in an economy like this, glamorous things like these are selling in the stores. And for that I say, 'Thank you Michelle Obama'."

Nina Ricci and Calvin Klein, December 2009

Unlike many first ladies who, such as Carla Sarkozy-Bruni, generally dress in one brand (Dior in her case) – Mrs Obama is known to mix and match. After she wore a mixture of Ricci and Klein to the Nobel award ceremony, in the two days afterwards the companies linked with the clothes saw a $772m aggregate gain, Mr Yermack said.

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