The First Lady and Fashion

Vision Statement David Yermack is the Albert Fingerhut Professor of Finance and Business Transformation at New York University's Stern School. Open is a design firm based in New York. The Tonight Show 10/27/08 By the Numbers Yermack compiled a database from website J. CREW J. CREW reports of apparel worn by the First Lady, and then measured stock price changes for the fashion and retail brands How This First Lady Moves Markets mentioned to see how publicizing her wardrobe affected company value. He controlled for normal market variations, reporting the abnormal. returns associated with her wardrobe choices. The First Lady's Fashion Choices Create Winners and Losers Companies that the First Lady didn't choose (Yermack looked at 27 competitors, 21 of them U.S.-based) paid a penalty for being left out. Following 18 major public appearances, nonchosen companies lost about o.4% in value. This appears to have been redistributed to chosen firms, which gained more than 2%. J. Crew stock value prior to appearance $16.24 10/28/08: 10/31/08: Data by David Yermack; visualization by Open + 8% $17.52 $20.33 + 25% Michelle Obama creates an unprecedented amount of value for the companies that make and sell the clothes she wears. HBR spoke to Yermack to find out why. 189 State Dinner for Indian Prime Minister 11/24/09 CUMULATIVE ABNORMAL RETURNS public appearances from November 2008 2.5% to December 2o09 The effect of Obama's fashion BRANDS S 245 choices on stock prices is huge. But is it causation or correlation? CHOSEN BY OBAMA 2.0% The stock price gains of the com- panies whose clothes she wore in public appearances-29 brands in all-are cumulative abnormal returns. That is, the returns cannot be attributed to normal market items of apparel 1.5% 29 NAEEM KHAN public companies observed, including: Aeffe S.p.A. Cie. Financière Richemont 1.0% variations. 0.5% Is the effect temporary? The stock price gains persist days after the outfit is worn and in some ISABEL TOLEDO DSW "It's the gift that doesn't stop giving. My stuff is flying out of stores." Naeem Khan, 12 weeks after Obama wore his dress. Wall Street Journal, 2/18/10 Gap J. Crew Kohl's Liz Claiborne BRANDS NOT CHOSEN BY OBAMA 0% cases even trend slightly higher three weeks later. Some compa- nies that sell clothes that Obama $14M LVMH -0.5% frequently wears, such as Saks, have realized long-term gains. Her husband's approval rating appears Nike DAY OF EVENT PPR average value generated by any public appearance Saks 2.3% Nobel Peace Prize 12/10/09 have no effect on the returns. Target Urban Outfitters How do the returns compare with those generated by other brand endorsers? Few models or celebrities make the kind of impact on company stock price that Michelle Obama does. The First Lady's astonishing influence may be tied to the fact that consumers know she's not paid to wear what she does, whereas they may subconsciously discount models' endorsements as inherently corrupt. INCREASE IN CUMULATIVE ABNORMAL RETURNS FOLLOWING 18 MAJOR PUBLIC APPEARANCES The "First Lady Index" Beats the Market During a European Trip 0.5% Stocks of the fashion and retail companies whose clothes were worn by Obama on a one-week trip to Europe gained 16.3% on average, easily outperforming the S&P 500, which posted a gain of 6.1%. NINA RICCI Why her? Why now? The unparalleled robustness of the Michelle Obama AVERAGE INCREASE WHEN A COMPANY ANNOUNCES A NEW effect results from the confluence of three factors: VALUE OF $1.00 INVESTED CELEBRITY ENDORSER $1.40 her personal interest in fashion, recognized by consumers as authentic; her position as First Lady and the intangible value it confers; and the power of the social internet and e-commerce. Descriptions and images of what she's wearing spread across the social internet in near-real time, and consumers can buy these fashions almost instantly online. For the first time in history, the cycle of influence is immediate and ubiquitous. O SAKS CALVIN KLEIN Have all First Ladies had this effect? No. Even fashion icons such as France's Carla Bruni-Sarkozy do not. Bruni-Sarkozy, like many First Ladies, dresses mainly in one brand: Dior. Obama mixes $1.30 $2.7B $1.20 MACY'S total value created for 29 companies by Obama's wardrobe choices in 189 public appearances J. CREW RICHEMONT couture with items anyone can buy at a mall-she famously wore J. Crew gloves while holding the Lincoln Bible at the Inauguration. Consumers flock to the stores, and even if they don't buy what she wears, they often leave with something else. $772M gregate gains $1.10 DILLAROOM S&P 500 over the two days following the appearance for companies associated with this outfit, specifically Phillips-Van Heusen, Richemont, Macy's, Nordstrom, Saks, and Dillard's $1.00 3/30 3/31 4/1 4/2 4/3 4/6 JIMMY CHOO Vision Statement David Yermack is the Albert Fingerhut Professor of Finance and Business Transformation at New York University's Stern School. Open is a design firm based in New York. The Tonight Show 10/27/08 By the Numbers Yermack compiled a database from website J. CREW J. CREW reports of apparel worn by the First Lady, and then measured stock price changes for the fashion and retail brands How This First Lady Moves Markets mentioned to see how publicizing her wardrobe affected company value. He controlled for normal market variations, reporting the abnormal. returns associated with her wardrobe choices. The First Lady's Fashion Choices Create Winners and Losers Companies that the First Lady didn't choose (Yermack looked at 27 competitors, 21 of them U.S.-based) paid a penalty for being left out. Following 18 major public appearances, nonchosen companies lost about o.4% in value. This appears to have been redistributed to chosen firms, which gained more than 2%. J. Crew stock value prior to appearance $16.24 10/28/08: 10/31/08: Data by David Yermack; visualization by Open + 8% $17.52 $20.33 + 25% Michelle Obama creates an unprecedented amount of value for the companies that make and sell the clothes she wears. HBR spoke to Yermack to find out why. 189 State Dinner for Indian Prime Minister 11/24/09 CUMULATIVE ABNORMAL RETURNS public appearances from November 2008 2.5% to December 2o09 The effect of Obama's fashion BRANDS S 245 choices on stock prices is huge. But is it causation or correlation? CHOSEN BY OBAMA 2.0% The stock price gains of the com- panies whose clothes she wore in public appearances-29 brands in all-are cumulative abnormal returns. That is, the returns cannot be attributed to normal market items of apparel 1.5% 29 NAEEM KHAN public companies observed, including: Aeffe S.p.A. Cie. Financière Richemont 1.0% variations. 0.5% Is the effect temporary? The stock price gains persist days after the outfit is worn and in some ISABEL TOLEDO DSW "It's the gift that doesn't stop giving. My stuff is flying out of stores." Naeem Khan, 12 weeks after Obama wore his dress. Wall Street Journal, 2/18/10 Gap J. Crew Kohl's Liz Claiborne BRANDS NOT CHOSEN BY OBAMA 0% cases even trend slightly higher three weeks later. Some compa- nies that sell clothes that Obama $14M LVMH -0.5% frequently wears, such as Saks, have realized long-term gains. Her husband's approval rating appears Nike DAY OF EVENT PPR average value generated by any public appearance Saks 2.3% Nobel Peace Prize 12/10/09 have no effect on the returns. Target Urban Outfitters How do the returns compare with those generated by other brand endorsers? Few models or celebrities make the kind of impact on company stock price that Michelle Obama does. The First Lady's astonishing influence may be tied to the fact that consumers know she's not paid to wear what she does, whereas they may subconsciously discount models' endorsements as inherently corrupt. INCREASE IN CUMULATIVE ABNORMAL RETURNS FOLLOWING 18 MAJOR PUBLIC APPEARANCES The "First Lady Index" Beats the Market During a European Trip 0.5% Stocks of the fashion and retail companies whose clothes were worn by Obama on a one-week trip to Europe gained 16.3% on average, easily outperforming the S&P 500, which posted a gain of 6.1%. NINA RICCI Why her? Why now? The unparalleled robustness of the Michelle Obama AVERAGE INCREASE WHEN A COMPANY ANNOUNCES A NEW effect results from the confluence of three factors: VALUE OF $1.00 INVESTED CELEBRITY ENDORSER $1.40 her personal interest in fashion, recognized by consumers as authentic; her position as First Lady and the intangible value it confers; and the power of the social internet and e-commerce. Descriptions and images of what she's wearing spread across the social internet in near-real time, and consumers can buy these fashions almost instantly online. For the first time in history, the cycle of influence is immediate and ubiquitous. O SAKS CALVIN KLEIN Have all First Ladies had this effect? No. Even fashion icons such as France's Carla Bruni-Sarkozy do not. Bruni-Sarkozy, like many First Ladies, dresses mainly in one brand: Dior. Obama mixes $1.30 $2.7B $1.20 MACY'S total value created for 29 companies by Obama's wardrobe choices in 189 public appearances J. CREW RICHEMONT couture with items anyone can buy at a mall-she famously wore J. Crew gloves while holding the Lincoln Bible at the Inauguration. Consumers flock to the stores, and even if they don't buy what she wears, they often leave with something else. $772M gregate gains $1.10 DILLAROOM S&P 500 over the two days following the appearance for companies associated with this outfit, specifically Phillips-Van Heusen, Richemont, Macy's, Nordstrom, Saks, and Dillard's $1.00 3/30 3/31 4/1 4/2 4/3 4/6 JIMMY CHOO Vision Statement David Yermack is the Albert Fingerhut Professor of Finance and Business Transformation at New York University's Stern School. Open is a design firm based in New York. The Tonight Show 10/27/08 By the Numbers Yermack compiled a database from website J. CREW J. CREW reports of apparel worn by the First Lady, and then measured stock price changes for the fashion and retail brands How This First Lady Moves Markets mentioned to see how publicizing her wardrobe affected company value. He controlled for normal market variations, reporting the abnormal. returns associated with her wardrobe choices. The First Lady's Fashion Choices Create Winners and Losers Companies that the First Lady didn't choose (Yermack looked at 27 competitors, 21 of them U.S.-based) paid a penalty for being left out. Following 18 major public appearances, nonchosen companies lost about o.4% in value. This appears to have been redistributed to chosen firms, which gained more than 2%. J. Crew stock value prior to appearance $16.24 10/28/08: 10/31/08: Data by David Yermack; visualization by Open + 8% $17.52 $20.33 + 25% Michelle Obama creates an unprecedented amount of value for the companies that make and sell the clothes she wears. HBR spoke to Yermack to find out why. 189 State Dinner for Indian Prime Minister 11/24/09 CUMULATIVE ABNORMAL RETURNS public appearances from November 2008 2.5% to December 2o09 The effect of Obama's fashion BRANDS S 245 choices on stock prices is huge. But is it causation or correlation? CHOSEN BY OBAMA 2.0% The stock price gains of the com- panies whose clothes she wore in public appearances-29 brands in all-are cumulative abnormal returns. That is, the returns cannot be attributed to normal market items of apparel 1.5% 29 NAEEM KHAN public companies observed, including: Aeffe S.p.A. Cie. Financière Richemont 1.0% variations. 0.5% Is the effect temporary? The stock price gains persist days after the outfit is worn and in some ISABEL TOLEDO DSW "It's the gift that doesn't stop giving. My stuff is flying out of stores." Naeem Khan, 12 weeks after Obama wore his dress. Wall Street Journal, 2/18/10 Gap J. Crew Kohl's Liz Claiborne BRANDS NOT CHOSEN BY OBAMA 0% cases even trend slightly higher three weeks later. Some compa- nies that sell clothes that Obama $14M LVMH -0.5% frequently wears, such as Saks, have realized long-term gains. Her husband's approval rating appears Nike DAY OF EVENT PPR average value generated by any public appearance Saks 2.3% Nobel Peace Prize 12/10/09 have no effect on the returns. Target Urban Outfitters How do the returns compare with those generated by other brand endorsers? Few models or celebrities make the kind of impact on company stock price that Michelle Obama does. The First Lady's astonishing influence may be tied to the fact that consumers know she's not paid to wear what she does, whereas they may subconsciously discount models' endorsements as inherently corrupt. INCREASE IN CUMULATIVE ABNORMAL RETURNS FOLLOWING 18 MAJOR PUBLIC APPEARANCES The "First Lady Index" Beats the Market During a European Trip 0.5% Stocks of the fashion and retail companies whose clothes were worn by Obama on a one-week trip to Europe gained 16.3% on average, easily outperforming the S&P 500, which posted a gain of 6.1%. NINA RICCI Why her? Why now? The unparalleled robustness of the Michelle Obama AVERAGE INCREASE WHEN A COMPANY ANNOUNCES A NEW effect results from the confluence of three factors: VALUE OF $1.00 INVESTED CELEBRITY ENDORSER $1.40 her personal interest in fashion, recognized by consumers as authentic; her position as First Lady and the intangible value it confers; and the power of the social internet and e-commerce. Descriptions and images of what she's wearing spread across the social internet in near-real time, and consumers can buy these fashions almost instantly online. For the first time in history, the cycle of influence is immediate and ubiquitous. O SAKS CALVIN KLEIN Have all First Ladies had this effect? No. Even fashion icons such as France's Carla Bruni-Sarkozy do not. Bruni-Sarkozy, like many First Ladies, dresses mainly in one brand: Dior. Obama mixes $1.30 $2.7B $1.20 MACY'S total value created for 29 companies by Obama's wardrobe choices in 189 public appearances J. CREW RICHEMONT couture with items anyone can buy at a mall-she famously wore J. Crew gloves while holding the Lincoln Bible at the Inauguration. Consumers flock to the stores, and even if they don't buy what she wears, they often leave with something else. $772M gregate gains $1.10 DILLAROOM S&P 500 over the two days following the appearance for companies associated with this outfit, specifically Phillips-Van Heusen, Richemont, Macy's, Nordstrom, Saks, and Dillard's $1.00 3/30 3/31 4/1 4/2 4/3 4/6 JIMMY CHOO Vision Statement David Yermack is the Albert Fingerhut Professor of Finance and Business Transformation at New York University's Stern School. Open is a design firm based in New York. The Tonight Show 10/27/08 By the Numbers Yermack compiled a database from website J. CREW J. CREW reports of apparel worn by the First Lady, and then measured stock price changes for the fashion and retail brands How This First Lady Moves Markets mentioned to see how publicizing her wardrobe affected company value. He controlled for normal market variations, reporting the abnormal. returns associated with her wardrobe choices. The First Lady's Fashion Choices Create Winners and Losers Companies that the First Lady didn't choose (Yermack looked at 27 competitors, 21 of them U.S.-based) paid a penalty for being left out. Following 18 major public appearances, nonchosen companies lost about o.4% in value. This appears to have been redistributed to chosen firms, which gained more than 2%. J. Crew stock value prior to appearance $16.24 10/28/08: 10/31/08: Data by David Yermack; visualization by Open + 8% $17.52 $20.33 + 25% Michelle Obama creates an unprecedented amount of value for the companies that make and sell the clothes she wears. HBR spoke to Yermack to find out why. 189 State Dinner for Indian Prime Minister 11/24/09 CUMULATIVE ABNORMAL RETURNS public appearances from November 2008 2.5% to December 2o09 The effect of Obama's fashion BRANDS S 245 choices on stock prices is huge. But is it causation or correlation? CHOSEN BY OBAMA 2.0% The stock price gains of the com- panies whose clothes she wore in public appearances-29 brands in all-are cumulative abnormal returns. That is, the returns cannot be attributed to normal market items of apparel 1.5% 29 NAEEM KHAN public companies observed, including: Aeffe S.p.A. Cie. Financière Richemont 1.0% variations. 0.5% Is the effect temporary? The stock price gains persist days after the outfit is worn and in some ISABEL TOLEDO DSW "It's the gift that doesn't stop giving. My stuff is flying out of stores." Naeem Khan, 12 weeks after Obama wore his dress. Wall Street Journal, 2/18/10 Gap J. Crew Kohl's Liz Claiborne BRANDS NOT CHOSEN BY OBAMA 0% cases even trend slightly higher three weeks later. Some compa- nies that sell clothes that Obama $14M LVMH -0.5% frequently wears, such as Saks, have realized long-term gains. Her husband's approval rating appears Nike DAY OF EVENT PPR average value generated by any public appearance Saks 2.3% Nobel Peace Prize 12/10/09 have no effect on the returns. Target Urban Outfitters How do the returns compare with those generated by other brand endorsers? Few models or celebrities make the kind of impact on company stock price that Michelle Obama does. The First Lady's astonishing influence may be tied to the fact that consumers know she's not paid to wear what she does, whereas they may subconsciously discount models' endorsements as inherently corrupt. INCREASE IN CUMULATIVE ABNORMAL RETURNS FOLLOWING 18 MAJOR PUBLIC APPEARANCES The "First Lady Index" Beats the Market During a European Trip 0.5% Stocks of the fashion and retail companies whose clothes were worn by Obama on a one-week trip to Europe gained 16.3% on average, easily outperforming the S&P 500, which posted a gain of 6.1%. NINA RICCI Why her? Why now? The unparalleled robustness of the Michelle Obama AVERAGE INCREASE WHEN A COMPANY ANNOUNCES A NEW effect results from the confluence of three factors: VALUE OF $1.00 INVESTED CELEBRITY ENDORSER $1.40 her personal interest in fashion, recognized by consumers as authentic; her position as First Lady and the intangible value it confers; and the power of the social internet and e-commerce. Descriptions and images of what she's wearing spread across the social internet in near-real time, and consumers can buy these fashions almost instantly online. For the first time in history, the cycle of influence is immediate and ubiquitous. O SAKS CALVIN KLEIN Have all First Ladies had this effect? No. Even fashion icons such as France's Carla Bruni-Sarkozy do not. Bruni-Sarkozy, like many First Ladies, dresses mainly in one brand: Dior. Obama mixes $1.30 $2.7B $1.20 MACY'S total value created for 29 companies by Obama's wardrobe choices in 189 public appearances J. CREW RICHEMONT couture with items anyone can buy at a mall-she famously wore J. Crew gloves while holding the Lincoln Bible at the Inauguration. Consumers flock to the stores, and even if they don't buy what she wears, they often leave with something else. $772M gregate gains $1.10 DILLAROOM S&P 500 over the two days following the appearance for companies associated with this outfit, specifically Phillips-Van Heusen, Richemont, Macy's, Nordstrom, Saks, and Dillard's $1.00 3/30 3/31 4/1 4/2 4/3 4/6 JIMMY CHOO Vision Statement David Yermack is the Albert Fingerhut Professor of Finance and Business Transformation at New York University's Stern School. Open is a design firm based in New York. The Tonight Show 10/27/08 By the Numbers Yermack compiled a database from website J. CREW J. CREW reports of apparel worn by the First Lady, and then measured stock price changes for the fashion and retail brands How This First Lady Moves Markets mentioned to see how publicizing her wardrobe affected company value. He controlled for normal market variations, reporting the abnormal. returns associated with her wardrobe choices. The First Lady's Fashion Choices Create Winners and Losers Companies that the First Lady didn't choose (Yermack looked at 27 competitors, 21 of them U.S.-based) paid a penalty for being left out. Following 18 major public appearances, nonchosen companies lost about o.4% in value. This appears to have been redistributed to chosen firms, which gained more than 2%. J. Crew stock value prior to appearance $16.24 10/28/08: 10/31/08: Data by David Yermack; visualization by Open + 8% $17.52 $20.33 + 25% Michelle Obama creates an unprecedented amount of value for the companies that make and sell the clothes she wears. HBR spoke to Yermack to find out why. 189 State Dinner for Indian Prime Minister 11/24/09 CUMULATIVE ABNORMAL RETURNS public appearances from November 2008 2.5% to December 2o09 The effect of Obama's fashion BRANDS S 245 choices on stock prices is huge. But is it causation or correlation? CHOSEN BY OBAMA 2.0% The stock price gains of the com- panies whose clothes she wore in public appearances-29 brands in all-are cumulative abnormal returns. That is, the returns cannot be attributed to normal market items of apparel 1.5% 29 NAEEM KHAN public companies observed, including: Aeffe S.p.A. Cie. Financière Richemont 1.0% variations. 0.5% Is the effect temporary? The stock price gains persist days after the outfit is worn and in some ISABEL TOLEDO DSW "It's the gift that doesn't stop giving. My stuff is flying out of stores." Naeem Khan, 12 weeks after Obama wore his dress. Wall Street Journal, 2/18/10 Gap J. Crew Kohl's Liz Claiborne BRANDS NOT CHOSEN BY OBAMA 0% cases even trend slightly higher three weeks later. Some compa- nies that sell clothes that Obama $14M LVMH -0.5% frequently wears, such as Saks, have realized long-term gains. Her husband's approval rating appears Nike DAY OF EVENT PPR average value generated by any public appearance Saks 2.3% Nobel Peace Prize 12/10/09 have no effect on the returns. Target Urban Outfitters How do the returns compare with those generated by other brand endorsers? Few models or celebrities make the kind of impact on company stock price that Michelle Obama does. The First Lady's astonishing influence may be tied to the fact that consumers know she's not paid to wear what she does, whereas they may subconsciously discount models' endorsements as inherently corrupt. INCREASE IN CUMULATIVE ABNORMAL RETURNS FOLLOWING 18 MAJOR PUBLIC APPEARANCES The "First Lady Index" Beats the Market During a European Trip 0.5% Stocks of the fashion and retail companies whose clothes were worn by Obama on a one-week trip to Europe gained 16.3% on average, easily outperforming the S&P 500, which posted a gain of 6.1%. NINA RICCI Why her? Why now? The unparalleled robustness of the Michelle Obama AVERAGE INCREASE WHEN A COMPANY ANNOUNCES A NEW effect results from the confluence of three factors: VALUE OF $1.00 INVESTED CELEBRITY ENDORSER $1.40 her personal interest in fashion, recognized by consumers as authentic; her position as First Lady and the intangible value it confers; and the power of the social internet and e-commerce. Descriptions and images of what she's wearing spread across the social internet in near-real time, and consumers can buy these fashions almost instantly online. For the first time in history, the cycle of influence is immediate and ubiquitous. O SAKS CALVIN KLEIN Have all First Ladies had this effect? No. Even fashion icons such as France's Carla Bruni-Sarkozy do not. Bruni-Sarkozy, like many First Ladies, dresses mainly in one brand: Dior. Obama mixes $1.30 $2.7B $1.20 MACY'S total value created for 29 companies by Obama's wardrobe choices in 189 public appearances J. CREW RICHEMONT couture with items anyone can buy at a mall-she famously wore J. Crew gloves while holding the Lincoln Bible at the Inauguration. Consumers flock to the stores, and even if they don't buy what she wears, they often leave with something else. $772M gregate gains $1.10 DILLAROOM S&P 500 over the two days following the appearance for companies associated with this outfit, specifically Phillips-Van Heusen, Richemont, Macy's, Nordstrom, Saks, and Dillard's $1.00 3/30 3/31 4/1 4/2 4/3 4/6 JIMMY CHOO Vision Statement David Yermack is the Albert Fingerhut Professor of Finance and Business Transformation at New York University's Stern School. Open is a design firm based in New York. The Tonight Show 10/27/08 By the Numbers Yermack compiled a database from website J. CREW J. CREW reports of apparel worn by the First Lady, and then measured stock price changes for the fashion and retail brands How This First Lady Moves Markets mentioned to see how publicizing her wardrobe affected company value. He controlled for normal market variations, reporting the abnormal. returns associated with her wardrobe choices. The First Lady's Fashion Choices Create Winners and Losers Companies that the First Lady didn't choose (Yermack looked at 27 competitors, 21 of them U.S.-based) paid a penalty for being left out. Following 18 major public appearances, nonchosen companies lost about o.4% in value. This appears to have been redistributed to chosen firms, which gained more than 2%. J. Crew stock value prior to appearance $16.24 10/28/08: 10/31/08: Data by David Yermack; visualization by Open + 8% $17.52 $20.33 + 25% Michelle Obama creates an unprecedented amount of value for the companies that make and sell the clothes she wears. HBR spoke to Yermack to find out why. 189 State Dinner for Indian Prime Minister 11/24/09 CUMULATIVE ABNORMAL RETURNS public appearances from November 2008 2.5% to December 2o09 The effect of Obama's fashion BRANDS S 245 choices on stock prices is huge. But is it causation or correlation? CHOSEN BY OBAMA 2.0% The stock price gains of the com- panies whose clothes she wore in public appearances-29 brands in all-are cumulative abnormal returns. That is, the returns cannot be attributed to normal market items of apparel 1.5% 29 NAEEM KHAN public companies observed, including: Aeffe S.p.A. Cie. Financière Richemont 1.0% variations. 0.5% Is the effect temporary? The stock price gains persist days after the outfit is worn and in some ISABEL TOLEDO DSW "It's the gift that doesn't stop giving. My stuff is flying out of stores." Naeem Khan, 12 weeks after Obama wore his dress. Wall Street Journal, 2/18/10 Gap J. Crew Kohl's Liz Claiborne BRANDS NOT CHOSEN BY OBAMA 0% cases even trend slightly higher three weeks later. Some compa- nies that sell clothes that Obama $14M LVMH -0.5% frequently wears, such as Saks, have realized long-term gains. Her husband's approval rating appears Nike DAY OF EVENT PPR average value generated by any public appearance Saks 2.3% Nobel Peace Prize 12/10/09 have no effect on the returns. Target Urban Outfitters How do the returns compare with those generated by other brand endorsers? Few models or celebrities make the kind of impact on company stock price that Michelle Obama does. The First Lady's astonishing influence may be tied to the fact that consumers know she's not paid to wear what she does, whereas they may subconsciously discount models' endorsements as inherently corrupt. INCREASE IN CUMULATIVE ABNORMAL RETURNS FOLLOWING 18 MAJOR PUBLIC APPEARANCES The "First Lady Index" Beats the Market During a European Trip 0.5% Stocks of the fashion and retail companies whose clothes were worn by Obama on a one-week trip to Europe gained 16.3% on average, easily outperforming the S&P 500, which posted a gain of 6.1%. NINA RICCI Why her? Why now? The unparalleled robustness of the Michelle Obama AVERAGE INCREASE WHEN A COMPANY ANNOUNCES A NEW effect results from the confluence of three factors: VALUE OF $1.00 INVESTED CELEBRITY ENDORSER $1.40 her personal interest in fashion, recognized by consumers as authentic; her position as First Lady and the intangible value it confers; and the power of the social internet and e-commerce. Descriptions and images of what she's wearing spread across the social internet in near-real time, and consumers can buy these fashions almost instantly online. For the first time in history, the cycle of influence is immediate and ubiquitous. O SAKS CALVIN KLEIN Have all First Ladies had this effect? No. Even fashion icons such as France's Carla Bruni-Sarkozy do not. Bruni-Sarkozy, like many First Ladies, dresses mainly in one brand: Dior. Obama mixes $1.30 $2.7B $1.20 MACY'S total value created for 29 companies by Obama's wardrobe choices in 189 public appearances J. CREW RICHEMONT couture with items anyone can buy at a mall-she famously wore J. Crew gloves while holding the Lincoln Bible at the Inauguration. Consumers flock to the stores, and even if they don't buy what she wears, they often leave with something else. $772M gregate gains $1.10 DILLAROOM S&P 500 over the two days following the appearance for companies associated with this outfit, specifically Phillips-Van Heusen, Richemont, Macy's, Nordstrom, Saks, and Dillard's $1.00 3/30 3/31 4/1 4/2 4/3 4/6 JIMMY CHOO