Michelle Obama Is Reviving Retail, Big-Time

The dissemination of the paparazzi-like coverage of Mrs. Obama's wardrobe have led to serious payoff, beyond the obvious rise in name recognition and general cachet. According to a study by N.Y.U finance and business professor David Yermack in the Harvard Business Review, when the First Lady wears a look, the company's stock price increases.

We're all familiar with Jason Wu's rise from indie darling to a household name when Mrs. Obama wore his one-shouldered, white chiffon gown to the Inaugural Ball. And, we're well-versed in the First Lady's penchant for bold pieces designed by other high-end up-comers, such as Peter Som, Naheem Kahn, and Thakoon. These aren't public companies, but Saks, who sells such labels, is, and its stock price trended seriously upwards, well above the S&P 500.

Yermack's article comes complete with graphs illustrating "The First Lady Index." In pure dollar value, he estimates that a single public appearance by Mrs. Obama generates an average of 14 million dollars. Interestingly, it's not an instantaneous spike either - the woman's got longer term influence; her choice of frocks affects stock prices three-weeks out, and help companies realize long-term gains. This is at least partially due to the proliferation of articles and sites devoted to her style, and the ease of which e-commerce allows the public to purchase.

It's not just under-the-radar brands that are benefitting. Mainstream companies like J. Crew and Talbots—two entities, we might add, enjoying a major retail renaissance of late—are among the labels that profited as a result of being worn by the First Lady.

As for what drives her style power, it's not the President. Even when his approval ratings are down, Mrs. Obama's style score soars.


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