But even the rarified worlds of fashion and luxury are linked to the broader economy—and marketing lavish, often ephemeral goods is brutally challenging in the best of times. With banks tanking, bonuses vanishing, and retailer bankruptcies on the rise, peddling luxury in 2008 is no enviable task. Here's a quick survival guide for how the American fashion industry will ride out these distinctly un-fabulous times.

Accessories will be everywhere. Like jewelry, for example.

In a paper detailing predictions for the 2008 luxury market, consumer-trends analyst Pam Danziger of Unity Marketing deemed jewelry purchases less susceptible to market fluctuations. "Jewelry is unique among luxury goods because it offers the customer some perceived inherent value," she said. Retailers and editors are keeping their fingers crossed that Danziger is right. "We've shot more and more with jewelry," says Sally Singer, fashion news and features director at Vogue. "Jewelry can upgrade any outfit, and jewelry purchase values don't change as quickly as clothes, especially gold."

Other accessories—especially shoes and handbags—will continue to be big business for designers and retailers. Consumers might be skittish about investing in expensive, trendy apparel but will still give themselves a smaller designer fix with these products. And designers—many of whom already make more money from accessories than ready-to-wear—will be looking for ways to further expand these lower-price-point lines of their brands.

While both Hachette Filipacchi and Hearst remain mum on the fate of Nina Garcia, Fashion Week Daily has confirmed exclusively with a source involved in the negotiations that the former Elle fashion director has accepted an offer from Marie Claire and will join the title as fashion director in September. This confirms the initial reports by Fashion Week Daily on May 8 that Garcia was joining Marie Claire editor-in-chief Joanna Cole's senior staff.

Garcia will replace Tracy Taylor, who has left the magazine. Garcia will attend the upcoming round of fashion weeks with the Marie Claire team. An official announcement on Garcia's hire could come as soon as the end of the week.

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As for the rumors that Marie Claire will replace Elle as a partner on Project Runway, they remain hearsay. "There has been no update," a spokesman for The Weinstein Company confirmed. At this point, Elle is confirmed for season five of Project Runway with season six undecided. "Negotiations are just starting, if even that," said a source. Garcia's hire at Marie Claire is "completely separate from Marie Claire's possible interest in Project Runway," the source added.

The Spice Girl is believed to be claiming Rock & Republic owe her as much as £50million for "loss of earnings" following her split with the trendy clothing company. The pop star signed up with the fashion label to make her jeans, which sold for more than £200 a pair, in September 2004. But she parted ways with the label two years later amid rumours of rows with designer and owner Michael Ball.

The normally publicity-hungry wife of England footballer David Beckham was reportedly criticised for not participating in enough PR opportunities. A High Court listing shows that Beckham Brand Ltd, a company set up by Victoria and David to deal with their activities in the world of fashion, filed a claim against Rock & Republic last month.

There are no further details available because the claim form has not yet been served on Rock & Republic, but Victoria is reportedly seeking the payout as compensation for lost earnings as she believes the jeans were more profitable than previously thought.

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At least one Wall Street brokerage, Wedbush Morgan, downgraded its shares to "hold" from "strong buy" with analyst Jeff Mintz citing reduced retail demand for the product. "Current macrotrends in the environment" have led to weaker-than-expected sales, according to Crocs Chief Executive Ron Snyder, speaking to analysts during a conference call on Tuesday. Colder weather and the closure of the company's Canadian factory were also expected to crimp profit.

Reduced store traffic in U.S. stores, together with fewer retail orders, have cut into the footwear maker's sales, given what Snyder called the "impulse buy" nature of his company's shoes. "We need the traffic in order for our sales to really pick up," Snyder told analysts. U.S. consumers have been cutting back on purchases as they feel pressure from high gasoline and food costs, a slump in the housing market, tight credit and fears of a recession.

J.P. Morgan analyst Robert Samuels called Crocs' lowered guidance -- which predicts a possible loss of up to 5 cents per share in the first quarter from an earlier view of 46 cents profit -- "stunning." "We think bears will take the shortfall as evidence that the brand is over," Samuels wrote in a note. Samuels said he believed there was still a place in the footwear market for the Crocs brand, but advised investors to stay on the sidelines until current economic pressures, inventory issues and short-selling activity play out.

"Shooting bikinis is now my life, which as you can imagine is unmitigated hell. But if you signed on for the gig, sadly, you have to go and be jolly in a skimpy white bikini. So now I rely on nice photographers and a certain amount of retouching. "I don't mind if you want to make me a bit thinner and a bit younger."

"We all like to get rid of spots and shadows under our eyes. But I've always been quite particular I don't like my face to be retouched." Liz now routinely touches up her family pictures with husband Arun Nayar and son Damian. She said: "Everytime I download my holiday snaps I go over them."

In recent years Scottish designers have been the hottest names on the world's catwalks. UK Vogue began its review of Christopher Kane's debut show at London Fashion week in 2006 saying: "There are certain moments in fashion history where you want to be able to say, I was there'."

The Motherwell native has since designed outfits for Kylie and Beth Ditto from The Gossip. He also advised Donatella Versace, whose designs helped advance the career of Scottish supermodel Kirsty Hume. She sported one of Versace's ensembles at 1998's Milan fashion show. Meanwhile, the Glaswegian Jonathan Saunders has been feted by Alexander McQueen and now divides his time between London and New York.

Kane and Saunders are prime examples of Scottish talent that has left Scotland, both studying at the world famous Central Saint Martins College in London, whose alumni include Stella McCartney, Terence Conran and John Galliano. The Scottish Academy of Fashion hopes to arrest this migration.

Alan Murray, head of design at Edinburgh College of Art, said the academy "will promote excellence in Scottish fashion and textiles, both nationally and internationally, through strong partnerships between academic institutions and industry. We also hope to work collaboratively with key organisations to ensure that young Scottish design talent is nurtured and retained in Scotland, and can make a valuable contribution to our creative industries."

ECA currently offers a fashion MA and regularly shows at London Fashion Week, the only Scottish institution to do so. But insiders say the academy will take fashion education and research to the next level, and through bolstering links with manufacturers in Scotland, bring the whole industry with it.

Officials are in negotiations with the School of Textiles and Design in Galashiels to build one of the key partnerships between other academic institutions. "There is no reason why there shouldn't be a fashion industry in Scotland," said Ian Howard, principal of ECA. "I was in Dublin recently and there was a thriving industry there, so there's no reason why not here. The talent in Scotland just isn't joined up with the industry in Scotland. That's why so many go to London."

The consumer spending slump and tightening credit markets are unleashing a widening wave of bankruptcies in American retailing, prompting thousands of store closings that are expected to remake suburban malls and downtown shopping districts across the country. Since last fall, eight mostly midsize chains -- as diverse as the furniture store Levitz and the electronics seller Sharper Image -- have filed for bankruptcy protection as they staggered under mounting debt and declining sales.

But the troubles are quickly spreading to bigger national companies, like Linens 'n Things, the bedding and furniture retailer with 500 stores in 47 states. It may file for bankruptcy as early as this week, according to people briefed on the matter. Even retailers that can avoid bankruptcy are shutting down stores to preserve cash through what could be a long economic downturn. Over the next year, Foot Locker said it would close 140 stores, Ann Taylor will start to shutter 117, and the jeweler Zales will close 100.

The surging cost of necessities has led to a national belt-tightening among consumers. Figures released on Monday showed that spending on food and gasoline is crowding out other purchases, leaving people with less to spend on furniture, clothing and electronics. Consequently, chains specializing in those goods are proving vulnerable. Retailing is a business with big ups and downs during the year, and retailers rely heavily on borrowed money to finance their purchases of merchandise and even to meet payrolls during slow periods. Yet the nation’s banks, struggling with the growing mortgage crisis, have started to balk at extending new loans, effectively cutting up the retail industry's collective credit cards.

"You have the makings of a wave of significant bankruptcies," said Al Koch, who helped bring Kmart out of bankruptcy in 2003 as the company's interim chief financial officer and works at a corporate turnaround firm called AlixPartners. "For years, no deal was too ugly to finance," he said. "But now, nobody will throw money at these companies."

Oil prices surged to a new high on Tuesday, reaching $114 a barrel, as scattered pipeline interruptions and a weak dollar agitated a tight global market. Crude oil futures jumped $2.03, to close at $113.79 a barrel on the New York Mercantile Exchange. Oil prices have gained more than 18 percent since the beginning of the year, and have increased 125 percent since early 2007.

Rising oil prices are helping to drive up the cost of gasoline. Retail gasoline has hit a record $3.39 a gallon on average nationwide, according to AAA, the automobile club. That’s more than 50 cents higher than a year ago. Diesel prices have posted even bigger gains. Diesel now averages $4.12 a gallon, according to AAA, $1.18 more than last year.

The immediate impetus for the moves in recent days has been a string of interruptions in pipeline operations in the Midwest and in Nigeria, as well as a shutdown of Mexican export terminals in the Gulf of Mexico because of bad weather. While small, these interruptions underline how sensitive the market is to the slightest disruption.

Oil's surge indicates that energy prices are showing no signs of falling despite slowing economic growth worldwide, particularly in the United States. The higher fuel prices, along with rising food prices, are contributing to sharp inflation.

Sources very close to the recent Nina Garcia fiasco confirm exclusively to PerezHilton.com that she was indeed fired from her role as Fashion Director at Elle magazine. Why??? She simply stopped working!

"She became too busy with Project Runway the last year to two," a mag insider tells us. "Nina had been spending about 8 hours a week on average actually in the office and working, and had her 2 assistants doing all of her work for her." How Devil Wears Prada of her! HOWEVER, we're also hearing that Nina may be coming back to Elle! What, say you? How so????

"The mag -- and Project Runway -- is looking into the possibility of giving her the silly and totally inconsequential title of 'editor at large" so she can still work on TV," a source tells us. "But the Runway people have been shopping around for a replacement for her for months because they have been anticipating her getting fired."

The French parliament's lower house adopted a groundbreaking bill Tuesday that would make it illegal for anyone — including fashion magazines, advertisers and Web sites -- to publicly incite extreme thinness. The National Assembly approved the bill in a series of votes Tuesday, after the legislation won unanimous support from the ruling conservative UMP party. It goes to the Senate in the coming weeks. Fashion industry experts said that, if passed, the law would be the strongest of its kind anywhere. Leaders in French couture are opposed to the idea of legal boundaries on beauty standards. The bill was the latest and strongest of measures proposed after the 2006 anorexia-linked death of a Brazilian model prompted efforts throughout the international fashion industry to address the repercussions of using ultra-thin models. Conservative lawmaker Valery Boyer, author of the law, argued that encouraging anorexia or severe weight loss should be punishable in court.

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Her bill has mainly brought focus to pro-anorexic Web sites that give advice on how to eat an apple a day -- and nothing else. But Boyer insisted in her speech to lawmakers Tuesday that the legislation was much broader and could, in theory, be used against many facets of the fashion industry. It would give judges the power to imprison and fine offenders up to $47,000 if found guilty of "inciting others to deprive themselves of food" to an "excessive" degree, Boyer said in a telephone interview before the parliamentary session.

Judges could also sanction those responsible for a magazine photo of a model whose "excessive thinness ... altered her health," she said. Boyer said she was focusing on women's health, though the bill applies to models of both sexes. The French Health Ministry says most of the 30,000 to 40,000 people with anorexia in France are women.

Didier Grumbach, president of the influential French Federation of Couture, said he was not aware how broad the proposed legislation was, and made no secret of his strong disapproval of such a sweeping measure. "Never will we accept in our profession that a judge decides if a young girl is skinny or not skinny," he said. "That doesn't exist in the world, and it will certainly not exist in France."

Elle is said to have parted company with its fashion director and Project Runway star and author Nina Garcia sources said late Friday. Neither Garcia, Elle editor in chief Robbie Myers nor a spokeswoman for Elle could be reached for comment.

On Tuesday, Elle hosted a dinner with Moschino to celebrate Simon Doonan's new book, "Eccentric Glamour: Creating an Insanely More Fashionable You", but Garcia was notably absent.

Speculation about Garcia's departure has swirled for months, especially after the arrival of Joe Zee at the beginning of 2007 as creative director. Last spring, Garcia left the magazine on maternity leave, and began writing a monthly fashion column for Elle upon her return. Garcia was in the office on Friday morning, but by the afternoon, sources close to the building say Hachette’s Midtown offices were abuzz about the rumor.

Thursday afternoon, Evelyn and Leonard Lauder, held a private luncheon at Le Cirque 2000 to honor Elizabeth Hurley’s 13 years as a Lauder spokeswoman. "It's been a lovefest since the beginning," said Evelyn Lauder, who gave Hurley a gold Cartier Love bracelet. "Elizabeth resonates with everyone -- especially the consumers. They say she is the kind of person they would want as a friend." Hurley will appear in two Estée Lauder brand ads later this year: for the new Sensuous fragrance, due out in July, and for Perfectionist, which the company is releasing with an updated formula, also in July.

When she's not at Lauder, Hurley has a host of other things keeping her busy. She continues to design and market her Elizabeth Hurley Beach collection of swimwear (a trademark fight with California-based sportswear brand Hurley International notwithstanding) and has just designed a lower-priced swimwear line for Spanish retailer Mango. Hurley will appear in advertising for the collection, Elizabeth Hurley for Mango, due out next month.

Lifetime announced today that it has picked up the hit Bravo series Project Runway and will begin airing the series' sixth cycle, which debuts in November. In a statement, The Weinstein Co., which produces the show with executive producers Dan Cutforth and Jane Lipsitz of Magical Elves, announced that it entered a five-year deal for the show with Lifetime -- a development that prompted legal action by NBC/Universal. In the same statement, the Weinstein Co. acknowledged that NBC filed a lawsuit today in New York Supreme Court in an attempt to block the series from moving to Lifetime. "We believe that this lawsuit is without merit. While good for the market for lawyers, it is always unfortunate when parties try to win in court what they have lost in the marketplace," said David Boies, counsel to The Weinstein Co.

The NBC/Universal lawsuit asserts that the company had been negotiating with The Weinstein Co. for a year to obtain additional installments of Runway but the production company "never intended to negotiate in good faith." It goes on to say, "Instead, The Weinstein Co. threatened to take future cycles of the program to a competing TV network unless [NBC] agreed to pay many millions of additional dollars to Weinstein to acquire a 'package' that included TV rights to second-tier Weinstein films unrelated to Runway." The Weinstein Co. was contractually obligated to give the NBC-owned Bravo the right of first refusal when it got the offer from Lifetime, says the suit.

Weinstein has already begun pre-production of Runway’s fifth season for Bravo, which is scheduled to air in June.

NBC released this statement today: "NBC Universal has continuing legal rights related to Project Runway, including a right of first refusal to future cycles of the series, which The Weinstein Company unfortunately has refused to honor. NBC Universal regrettably had no alternative but to bring legal action to enforce its rights to this program, including the right to decide whether it is in the best interest of the company to continue to air the show under the proposed financial terms."

Under the direction of True Religion founder, chairman, chief executive officer and creative director Jeffrey Lubell, the women's ad images were shot in Malibu, California by photographer Ashley Barrett, whose clients include Dior, Bloomingdale's, Elle, and Women's Wear Daily. The women's ads showcase supermodel Marisa Miller, a Victoria's Secret Angel and the 2008 Sports Illustrated Swimsuit Edition cover girl, in True Religion's premium denim, distinctive knits and sportswear, swimwear, footwear and accessories. The men's ads feature the Nathan Giant Big T in the newly introduced Blacklight denim group.

"For our inaugural advertising campaign, we wanted to capture the hippie-bohemian-chic spirit of True Religion," said Jeffrey Lubell, chairman and chief executive officer of True Religion Apparel, Inc. "We are pleased to have Marisa Miller as the face of True Religion in this campaign, as she epitomizes the look of our brand. This campaign also shows how we are expanding our line, with handbags, footwear, swimwear and headwear all coordinated from a single design vision."

Lohan is thinking outside of the box, though. She recently revealed that she's got a business idea to carry her over until her next windfall: She'll be starting her own line of leggings. Lohan told Life & Style, "It will be a while before it comes out, but I'm going to do it. Some of them will have prints and some will have patterns. I love leggings."

"Lindsay has had a reality check - she's not getting offers like she used to. She's definitely thinking she needs a big blockbuster just so she can go back to living comfortably," said one source in the film industry.

Just where did the money go? In Touch weekly outlined some of her spending, and the magazine concludes that Lohan has paid more than $315,000 on rehab stays and more than $1 million on hotels (in particular, they point to the $2,700/night suite at the Chateau Marmot where Lohan lived for a time). And although her rep denies Lohan's cash situation and spending, there is a stunning budget line for tanning: The magazine says that she spent a mind-boggling $70,000 alone on her sunshine in a bottle.

It's free-agency season in American fashion. Isaac Mizrahi, the everyman's fashion oracle, is about to leave behind his wildly popular cheap-chic clothing collections at Target to be the creative director for Liz Claiborne, the stalwart shopping-mall label. Dana Buchman, a longtime favorite of customers at upscale stores like Saks Fifth Avenue and Neiman Marcus, is decamping this fall to the budget-conscious Kohl's.

And Tommy Hilfiger, a constant in department stores like Dillard's and Bon-Ton for two decades, now says he will sell his clothes only at Macy's. Over the next year, an unusually large group of famous clothing designers, motivated by lucrative deals, plan to shift their retail allegiances, in many cases abandoning stores and customers who have supported them for years. So like angry sports fans wounded by a the trade of a star player, consumers (and even stores) are left to wonder: What ever became of loyalty?

The sudden flurry of designer address changes - J. C. Penney, Gap, Old Navy and Wal-Mart have also recruited their own designers over the last six months - is likely to create jarring transitions for American consumers as they try to navigate the once-familiar aisles of their local clothing chains, wondering where to find Isaac, Dana and Tommy, among others. "There will be a period of dislodgment and disenfranchisement," said William L. McComb, chief executive of Liz Claiborne, whose efforts to revive flagging sales hinge upon his company's aggressive wooing of Mr. Mizrahi from Target. After Claiborne announced the move in January, Target responded by saying it would end its relationship with Mr. Mizrahi at the end of the year, leaving, for now, a void in its lineup.

The motivation behind these defections and poachings is equal parts economic and egocentric. Clothing manufacturers are responding to a seemingly insatiable appetite for fashion across every income bracket. They are also benefiting from a lively, and occasionally vindictive, competition between mass retailers (Wal-Mart and Kohl's) and the traditional department stores (Macy's, Bloomingdale's and Lord & Taylor) that remain after years of industry mergers. When it comes to luring designer brands, it seems that popularly priced chains are suddenly on equal footing with their glossier rivals.

For decades, department stores like Saks had a virtual lock on designer clothing labels, until Mr. Mizrahi broke that barrier with his collection at Target in 2003, which, rather than burying his career, became an estimated $300-million-a-year success. Once the stigma of crossing into mass-retail territory lifted, such high-low designer partnerships became commonplace, with Vera Wang selling a line at Kohl's and blue-chip names like Karl Lagerfeld and Stella McCartney creating lines for H&M.

The 2008 back-to-school collection is created from Lavigne's own closet and will feature two key fashion collections at launch. The first features a combination of feminine sophistication and rock-and-roll attitude, which includes bold colors and mix-and-match iconic prints; and the second features a fusion of ska, reggae and skater with a balance of traditional tartan plaids, checks and stripes.

Apparel and jewelry will be available at launch. Additional categories may be added over time. Abbey Dawn will be sized 0-13 in bottoms and S-XL in tops. Apparel prices will range from $24 to $48.

The star, 33, is in talks for them to go on sale at upmarket department stores. Mum-of-three Posh already has a best-selling range of jeans -- DVB By Victoria Beckham. Now she will use the knowledge she has picked up from designer pal Roberto Cavalli to launch herself as a fashionista. She has also sought advice from New York clothing guru Marc Jacobs.

Victoria will follow in the footsteps of supermodel Kate Moss, 33, and chart singer Lily Allen, 22. They received multi-million pound deals to design clothes for Topshop and New Look respectively. A source said: "It's fair to say that Posh wants her range to be slightly more pricey than Lily and Kate's. "She wants quality to be the most important thing in her designs and this adds cost."

The chief executive of the brand known for its provocative televised fashion shows and alluring stores made an admission yesterday. In her mind, the brand has become "too sexy" -- or at least the wrong kind of sexy.

"We have so much gotten off our heritage," CEO Sharen Jester Turney said in a conference call with analysts. Responding to the past year's weak sales and focus-group feedback, she said, "We will return to an ultra-feminine lingerie brand to meet [customer] needs and expectations."

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Changing customer views will be a huge challenge. Sheri Coulter, a 42-year-old secretary in Flower Mound, Texas, worked at a Victoria's Secret store three years ago. "It was like pulling teeth to get the women our age to come in there," she says. "In our 40s and up, we are sexy -- just not the same sexy a college gal is." For a time, she says, the store where she worked stopped carrying sizes 38 or larger, embarrassing some older customers who were turned away. Limited bought Victoria's Secret in 1982, when it had just four stores and a catalog. Under Limited Chief Executive Leslie Wexner, Victoria's Secret improved its quality and toned down racy styles to appeal to mainstream customers.

In the 1990s, professional women shopped the pastel-painted stores for colorful, European-inspired lingerie, supplementing underwear wardrobes previously filled with black, white and beige styles. Soft music played in the background while saleswomen discreetly offered help. But over time, Victoria's Secret adapted to a changing culture. Women began wearing camisoles and bustiers as outer garments, the growth of the Internet made skin-baring photographs ubiquitous, and teen pop stars such as Britney Spears gyrated on stage in revealing costumes.

One reason Victoria's Secret got off track, Ms. Turney said, was the success of its Pink brand, which launched in 2002 and aimed to introduce college students to Victoria's Secret stores. Pink has grown tremendously; in October, an executive said it would probably reach $900 million in sales for 2007. But as teens and 20-somethings snapped up Pink underwear and pajamas, too many other product lines at Victoria's Secret shifted to target that same customer, Ms. Turney said.