Say what you will about Barack Obama’s efforts to reinvigorate the economy. Just don’t criticize Michelle. A new report published in this month’s Harvard Business Review demonstrates that the First Lady has the power to send stock prices and profits at fashion companies soaring just by slipping into one of their dresses.
David Yermack, a professor at New York University’s Stern School of Business, analyzed data between November 2008 and December 2009. “The stock price gains of the companies whose clothes she wore in public appearances—29 brands in all—are cumulative abnormal returns,” he says. “That is, the returns cannot be attributed to normal market variations.” (See pictures of Michelle Obama’s style evolution.)
Among other interesting tidbits, he found that:
- Obama generated $2.7 billion for the 29 companies during her 189 appearances over the 13-month period
- After Obama attended the Nobel Peace Prize ceremony on December 10, 2009, companies associated with her outfit—specifically Macy’s, Nordstrom, Saks, Dilliard’s, Phillips-Van Heusen and Richemont—gained $772 million
- Obama’s public appearances generate, on average, $14 million in value
- Prior to Obama’s Oct. 27, 2008 appearance on The Tonight Show, J. Crew stock was valued at $16.24. The following day its price rose 8% to $17.52. Three days later it had risen 25% to $20.33
- Stock price gains persist days after Obama wears an outfit, and in some cases trend higher three weeks later. Gains do not appear to relate to her husband’s approval rating
Not even fashion icons like France’s First Lady Carla Bruni-Sarkozy (yes, the one recently banned from the Vatican) have Obama’s power. Yermack believes that’s because Bruni-Sarkozy tends to wear one brand—Dior. Obama, on the other hand, combines high fashion with lower-end items that are accessible to most consumers. (See behind-the-scenes pictures of Michelle Obama.)
Beleaguered automakers in Detroit must have their fingers crossed that Michelle will start driving cars in public, too.