FASHION designers worldwide are learning a harsh lesson as the industry feels the pinch more than it has since the 1940s. They are being forced to face the fact that the long, some would say over-long, party of extravagance and self-indulgence is over. Each decade has its own image magazine. The 1980s belonged to The Face - cocky, confident and bursting with 'attitude'. The 1990s has Dazed & Confused, probably the first honestly named style magazine in the history of fashion. It is a title that reflects perfectly the present situation. The fashion industry is suffering from a self-inflicted fatwa. It is only now that the top designers - whose end of the market is most seriously in trouble - have decided to face the music. Recently, a clutch of them talked to WWD (Women's Wear Daily ), the influential American trade newspaper, about what has gone wrong. It was a watershed occasion, because it demonstrated that the industry had finally looked in on its problems, found the courage to address them and, with luck, might learn some lessons. That it has done so shows the extent of the panic. Let us hope it has not come too late. What the designers said to WWD was little more than a desperate search for scapegoats, but at least it was a start. Calvin Klein blamed the press. Giorgio Armani blamed himself, for the fact that in his last collection 'there was a certain element of concentration missing'. Bill Blass said that fashion was too self-involved and had become 'an inside joke'. Karl Lagerfeld criticised designers for their tendency to think too much about themselves and not enough about their collections (amen to that). Donna Karan apocalyptically cried: 'The industry as a whole is diseased.' Such words show what a rum do fashion has all but become. So, what has brought these gilded creatures, best beloved of the 1980s' gods of affluence and self-indulgence, to this stark point only a step or two from reality, the point they have managed to sidestep for so long? Designer hubris is the most obvious cause of the problem. Too much partying and 'being famous' are always bad for artistry. Designers have no permanent and unchanging yardstick by which to judge their work. They need the approbation of the opinion-makers. And they have tried to obtain it by concentrating too hard on the social side of their lives at the expense of the creative side of their craft. The result has been arrogance that believes itself beyond criticism. Arrogance is nothing new in fashion, but it may not be able to survive under present conditions. Fashion is in trouble because fantasy, extravagance and sheer idiocy have been allowed to stalk the catwalks with no thought, let alone regard, for the needs of women and the ultimate purpose of clothing. The future has been forgotten. For almost 10 years now, European fashion in particular has wallowed in recreations of the past. Lacroix has plundered the 1950s style of Dior and Balmain for most of that time. John Galliano is still doing so. Other designers look back to the 1930s and, in the latest collections, even the 40s, in their desperate attempt not to address the question of how women actually wish to dress now and for the future. Retro - which should be pilloried as an atavistic cop-out - has become respectable. And yet it only exists because previous generations of designers had no truck with it and were only interested in looking at their time, and times to come, for inspiration. Did Patou and Chanel wish to recreate the late 19th century? Was Balenciaga interested in looking back to the turn of the century for inspiration? Did Courreges and Cardin think that plundering the 30s would produce ideas appropriate for the 60s? Of course not. They saw their work as having integrity. They were not interested in making their names or their fortunes off the back of designers and ideas long dead. That is why their clothes have a creative vitality that makes them irresistible rip-off material for modern designers. The fact of the matter is that fashion is in trouble largely because of a shift in retail emphasis over the past 10 years. These days, it is the cost rather than the cut of the coat that matters. That is why fashion stores are buying fewer designer labels. They prefer to rip off the designer's ideas to sell much more cheaply under their own labels, as fashion houses and stores used to do in the 1950s. By doing so, they have sparked revolution with the bigger designer names. In America, designer cut-price outlets are so rampant that they are posing a true threat to arcade shopping, according to the WWD report. They are expanding at 10 times the rate of department stores. Karan, Klein and Ralph Lauren all have them - Lauren's even has the Polo signature brass and mahogany fittings - and all sell merchandise at a 25 per cent or more reduction. With US$300 (about HK$2,310) off an Armani jacket, no wonder these outlets generate such good sales. In 1990 there were 197 Gap outlets in America generating US$5 billion in sales; now there are more than 300 centres and they generate about US$10 billion annually. Gone are the days when these stores were concrete-floored, tin-roofed, down-market environments created to sell over-runs and miscalculations such as, as one manager put it, '500 green sweaters in large'. This is a new face of designer retailing. Count on it. But its very success brings uncertainty. Why pay the full price at a speciality store when the same goods are cheaper elsewhere? Will the designers be able to juggle the different needs of the market? Can upmarket boutiques or in-store shops price their goods to counter this move? These are the serious questions exercising the fashion world at the moment, but does the public know? No, because they are hidden behind the smokescreen of glamour which the fashion industry and its commentators think we, the public, need. An even greater problem, which will affect all markets, is the dramatic rise in the cost of the raw materials of fashion. This year alone, the price of wool has shot up by 35 per cent, cotton has increased by 25 per cent and nylon has risen by 19 per cent. This is the real reason why designers have come off their 'I'm a creative genius' high horses and bared their souls to WWD. As Pierre Berge, the marketing genius behind Yves Saint Laurent, summed it up: 'A lot of the fault is due to the press . . . people want to buy clothes they can wear . . . how can a business where everything is continually on sale be anything other than ill?'