Like aristocrats in the French Revolution, the fashion industry knew it would be first against the wall in the global economic downturn. In Australia, the most prominent collapse has been Morrissey, with poor Peter watching powerlessly — he’d sold his eponymous label in 2003. He’s now making clothes for Big W.

Posh business-shirt firm Herringbone also went into administration last December, hipster streetwear brand Ksubi is holding on by the kskin of its kteeth and soon there’ll be no biz like Shoobiz. Like, no biz at all.

But in a rather more unsettling turn of events, celebrated couturier Christian Lacroix has declared voluntary bankruptcy. Patsy and Edina wept — not Lacroix, sweetie!

In 2005 Lacroix’s owners, the Falic Group, did away with the usual fashion moneyspinners — accessories, perfume, cosmetics — to concentrate on haute couture. To make matters worse, Lacroix didn’t have a thriving retail network like Chanel, Hermès or Louis Vuitton.

Thanks to this eggs-in-one-basket strategy, last year Lacroix made a loss of 10 million euros on revenues of only 30 million euros.

“Even a child could see where this was leading — but I can’t feel anything but sorry for the old man,” blogged British accessories designer Lara Bohinc at Vogue.

“He had a dream — and fashion is all about the dream — but it is not a dream, it is a business.”

Perhaps the real trouble is that fashion isn’t dreamy. It’s too attainable and too conspicuous.

Fashion shows were once discreet events staged in a designer’s atelier for an elite handful of private clients and department store buyers. These days, they’re celeb-packed spectaculars that are viewable online or in afternoon commuter papers.

Meanwhile, celebrities at awards ceremonies — who seldom pay for their frocks — are routinely asked, “Who are you wearing?”

Even couture’s most capillary elements have lost their allure. The global counterfeiting industry has knocked the gloss off so-called “It bags”, and any Z-grade celebrity seems to be able to get his or her own clothing label or perfume.

Now, in desperation, fashion is again growing inconspicuous. Consumer demand for designer merchandise is still there, but has grown more measured and self-conscious, with a more discreet aesthetic.

Online designer goods retailer Net-a-porter now offers its customers plain brown paper packaging rather than its usual glossy black boxes and bags, so they needn’t feel guilty about flaunting their purchases.

Other high-end retailers offer plain white bags instead of Tiffany blue or Hermès orange. Retailers also report that big-spending customers are requesting private shopping sessions and home delivery, or spreading purchases between several credit cards to hide the extent of their sprees.

As shopping becomes less voracious, the idea of curating a personal style is taking over from rabid trend chasing. Michelle Obama has proven to be an unexpected style icon because she favours a timeless look culled from haute couture, emerging ready-to-wear designers and mass-market basics.

The fashion world has always found questions of sustainability desperately unchic, but the economic downturn has encouraged a swing towards “investment dressing”, which has the unexpected side-effect of encouraging consumers to spend money on labels that source materials ethically and pay workers fairly.

“Things that are very expensive can be very expensive for just the right reasons,” Sally Singer, US Vogue’s director of fashion news and features, recently told The Atlantic. “Those prices that often seem high are fair prices.”

Buying fewer, less faddish, better-quality items is certainly more frugal, but it also invests the idea of glamour with thoughtfulness rather than drama and excess.

And perhaps the labels that will survive this financial crunch are those that flatter more understated consumer habits.

Mel Campbell is the Editor of The Enthusiast.