How to Spend During a Recession

This story starts with a confession: I own too many clothes. I can give you all sorts of rationalizations—they're a way to celebrate and console myself, they reflect my keen sense of esthetics, they're cheaper than therapy, a victimless crime—but I might as well admit the truth. A working man like me, who goes to an office every day and usually wears a tie, needs about 10 dress shirts—maybe 15, if he's not punctual about dry cleaning. Yet when, on a nervous hunch, I recently counted those in my closet, I hit … well, I won't tell you, because it's too embarrassing. But the figure is several times too high. Opening another wardrobe, I found more bad news: ranks of suits, 12 pairs of corduroys (including three in the same shade of chocolate brown), enough khakis for a frat house, and a gang's worth of jeans.

Let me be very clear—I'm not proud of such excess. It is unseemly at the best of times. It makes me sound like a dandy with more money than sense (that may be true, but bear with me). During a recession, such indulgence is even less forgivable—not to mention unsustainable. Indeed, the economic meltdown has prompted some serious rethinking of my buying habits. And what I've realized after careful study is that the best path back to thrift is simple. Spend more. It's a time-tested strategy for beating a recession; it works for a huge range of goods and services. And signs are that savvy consumers are already doing just that.

Like any good analyst, I based my conclusion on careful research of the primary source: my wardrobe. The first thing I noticed was how few clothes I actually wear. Maybe a dozen shirts. Four suits. One killer blazer. A single, beloved pair of jeans. I also realized—and this is key—that the Chosen Few tend to be some of the most expensive clothes I own. Though my shirts run the gamut from cheap (the Gap) to midrange (Thomas Pink) to expensive, the two I love the most come from a small boutique in New York's Nolita called Seize sur Vingt, and cost about three times those I rarely touch. Ditto the cashmere Etro blazer. Among the suits, my favorite is a made-to-measure number in chalk-striped blue flannel. And on cold days, I always add a velvet-collared overcoat I picked up at a frighteningly high price in London six years ago. You get the picture.

These garments have been trying to send me a message. Since I can't afford to be a one-man retail stimulus program, I need to start shopping the way I dress: avoiding cheap junk in favor of a few expensive but high-quality items. It's how people have historically spent their money during tough periods. According to the U.S. Bureau of Economic Analysis, at the peak of the Great Depression in 1930, Americans spent a full 24 percent of their income on clothing and shoes alone, and 76 percent on necessities (also including food and housing). Last year, by contrast, they spent 13 percent on clothing and 50 percent on necessities. Of course, in the old days there was no such thing as disposable clothes—the astoundingly cheap garments pioneered by brands like France's Tati and Britain's Topshop—so people had no choice. But now as incomes drop, old habits are reasserting themselves.

People are trading excess for excellence, superficiality for substance. Consider the numbers. In the U.S., retail and food sales fell almost 10 percent in December and 2 percent more in January. Yet while trendy or midrange clothes chains like Saks Fifth Avenue are hurting, ultraclassics with reputations for quality are still going strong: LVMH, which owns Louis Vuitton, charted 4 percent growth for 2008, while Hermès hit 8 percent. Gavin Davis, a spokesman for Savile Row Bespoke, a cooperative of 12 London tailors, says the group has reported a steady rise in sales over the past few months, in what he calls a "flight to quality." Experts predict this kind of growth will continue. "The sense from the shop floor is that it's lower frequency, higher value," says James Lawson, a market consultant with Ledbury Research.

The trend is similar in other sectors. In the home-furnishings market, while cheap chains like Linens 'n Things and Bombay Company have gone bust, high-end and custom manufacturers are still enjoying robust sales. Incanto Group, an Italian maker of high-end, top-quality furniture, says sales increased by 30 percent in January and February of this year. John Hart, chief creative officer for Kohl Interiors, which owns the U.S. brand Bakers Furniture, maintains that the luxury-furniture market "held up very well through the fourth quarter [of last year], when the full impact of the financial crisis was really hitting." Analysts cite a similar phenomenon in real estate, where the strongest sales are in classic, high-value properties located in always-popular places like New York's Upper East Side or Idaho's ski resorts. And the Federation of the Swiss Watch Industry reported in January that the only category to boost exports since the beginning of 2008 was silver- and gold-plated pieces. People are "shopping more strategically," says Pam Danziger, CEO of Unity Marketing. This means avoiding all things trendy in favor of durable, traditional goods.

The reason is simple: quality pays. Well-made but expensive items in classic styles offer a few big advantages over more disposable things. The first is good looks. That $28 H&M gingham dress shirt with the eccentric collar may have seemed like a good idea in the store. But it's stiff and scratchy, and will never look as good on me as it did on the mannequin. Meanwhile, my few proud but sober $180 shirts are so much more comfortable and flattering that I'm likely to wear them forever.

Especially since quality also lasts. Upscale—as opposed to just overpriced—shirts, for example, come with heavy mother-of-pearl buttons lock-stitched onto the placket, making them much less likely to break in pressing than the thin, cheap plastic ones (see Republic, Banana). Then there's the material. Erika Kawalek, author of the forthcoming "Ragpicker," a cultural history of secondhand clothing, says much of a garment's life expectancy depends on its fabric. Though Pima cotton is more expensive, for instance, it is "far superior in strength and durability," she explains. "So it will wear longer before it shows signs of use."

With suits, the advantages are even more pronounced. Mark Henderson, deputy chairman of Gieves and Hawkes, says his Savile Row bespoke-suit service starts by offering customers a choice of about 10,000 fabrics, most of them fine wools and cashmeres woven in England. After extensive measurements, the suits are constructed during three fittings over about 50 hours (versus 90 minutes for a factory-made number). Nearly every stitch is done by hand; because it fits perfectly, "you're not putting the stitching under stress as you're sitting down or waving your arms," Henderson says. As a result a bespoke suit can last for generations.

So can other luxuries that never go out of style. In the art world, contemporary Chinese art sales have tanked since the Shanghai Contemporary Art Fair in September, while the old masters are going strong; "Bagpipe Player in Profile," a 1624 work by the Dutch painter Hendrick Ter Brugghen, sold for a record $10.2 million at Sotheby's New York in January—$400,000 more than its highest estimate. And the Yves Saint Laurent auction in Paris in February raised a European record of $484 million, thanks in part to works like Matisse's "Les Coucous, Tapis Bleu et Rose," which sold for just under $45.3 million—double its estimate.

This isn't to say that we should all run out and blow what's left of our portfolios on a Picasso (though if you have the cash, it's not a bad idea). All it takes to economize through value shopping is a little discipline. Start small—an Hermès tie, a pair of Church's shoes. Remember that costly doesn't necessarily equal quality; do your research first. Whatever you pick, avoid the vagaries of style and make sure you opt for a true classic that will age well. Thankfully, these can now be found at unusually reasonable prices. Retailers across the board are offering deep discounts, including never-before-seen markdowns in cities like Paris and Rome.

But if expensive treasures are to last, they must be treated with respect. Kawalek, the clothing historian, points out that during the Great Depression many people had only one or two good ensembles—not for nothing the term "Sunday best"—and thus handled them lovingly. "There's one way to describe the old way of thinking, and that's 'stewardship'," she says. To ensure that their garments had long lives, people took special care: washing them as soon as they took them off, mending flaws the moment they appeared, and repurposing items as they fell apart. Signs are that shoppers today have already gotten the message; New York Magazine reported in February that business at cobblers and repair stores is way up.

One final recommendation: while adjusting to the economy, now might be a good time to get rid of all that cheap, trendy stuff you don't actually use. I've decided, for example, to give up my surplus shirts (full disclosure, at my editor's insistence: the total number is around 62, minus those in the overflow room I couldn't bear counting), handing off the extras to an organization like Dress for Success, which supplies work outfits to the needy and unemployed to help them get jobs. It's economically and socially responsible. In fact, it's making me feel so virtuous that I just might decide to celebrate. But not by shopping. Unless, of course, you know of a really good sale.