As the credit crisis turns one and the signs of a recession can no longer be ignored it seems that even the luxurious fashion industry is feeling the heat.

I've been looking closely at the fashion industry lately since I assume that shoppers will tend to purchase necessary goods over luxury or discretionary items.

For a while it looked like the industry is doing well and with cheaper manufacturing they actually manage to expand (Vera Wang said "recession ? Smecession...).

Lately there are some signs that the fashion industry is becoming more vulnerable, Big retailers like Liz Claiborne, J.C. Penney and more are cutting expenses and getting ready for the times ahead. (I'm not talking about Steve & Berry, they should have been thriving in this kind of environment if they could run their business the way it was supposed to).

High fashion seems to take the toll too: It started with Calvin Klein announcing he will show men's fall/winter show in New York instead of Milan. (This is the first time in a decade.)

And now it seems like San Francisco Fashion Week will take a vacation this year.

On the other hand it seems like the rich are only getting richer and in the developing world there is a huge demand for luxury goods. I would assume that the petrodollars can save the luxury fashion industry and probably even help it expanding. But there is still a big segment of the industry that is selling to the middle class and that segment still has not found any substitution for the American and the European middle class.

There are already some survival guides written from Slate and WWD.

Slate claims Europe is too expensive (which creates more opportunities in the US) - "The disastrous state of the dollar abroad has made the importation of European collections prohibitively expensive in America, causing buyers to cut back on purchases from design houses overseas."

WWD:"Although it’s not a great time to undertake major technology initiatives, it’s a good time to invest in the Internet, say analysts."