"Where are the jackets?" store buyers asked.

Indeed, missing in action were most of the shaped jackets and blazers that have made Tahari one of the favourite upscale brands of American career women for more than 20 years--and now a $90 million annual business. After three years of slumping demand for women's suits, Tahari, for the first time, stopped concentrating on co-ordinated skirt-and-jacket outfits -- and slashed about 40 per cent of its jacket styles from its line this year.

This is a big change for Tahari and other garment makers whose businesses have been built around department-store shoppers entering a designer's display area and heading straight for the jackets. "Now the jackets don't move until they are 40 per cent or 50 percent off," laments Tahari designer and founder, Elie Tahari, 47 years old, who has watched the casual-dressing trend hang the jacket out to dry.

The 1990s have been a decade of reckoning for America's $92.6 billion women's apparel industry, which has had to grapple with consumers' waning interest in fashion trends and a vast oversupply of women's clothing fighting for retail space. Now, the further upheaval caused by changing tastes in what women wear to the office has upset the established order of the past 25 years for companies such as Liz Claiborne, Ann Taylor and Donna Karan, each of which built powerhouse brands around the jacketed ensembles for career women. Jackets provided women with an office uniform, and their popularity dovetailed with moves by department stores to carve up their selling floors into designer boutiques. Retailers could count on a steady flow of shoppers to buy several pieces on a single trip, first choosing a jacket and then the separates that went with it--all from the samedesigner.

As the casual-dressing movement took hold, though, many women started to cut back on building their wardrobes around suits. The jacket, as the most expensive component that used to drive the women's business, lost its power of persuasion. Across the industry, the eroding popularity of the jacket has been profound, "as seismic as when women stopped wearing corsets or bustles," declares David Wolfe, creative director of Doneger Group, retail industry consultants.

The change started to surface in 1997, when a survey of 1,400 career women by Caliborne found that only 19 per cent were wearing a suit every day to work, vs. 36 per cent in 1995. Most women polled said their favourite work attire was "nice casual," such as sweaters over pressed khakis, even if sometimes worn with a jacket.

Sweater sales by US retailers have jumped more than 15 per cent annually in each of the past three years, according to NPD Group Inc., Port Washington, New York, marketing consultants. Meanwhile, sales of women'ssuits -- for the target under-35 group -- dropped 18 per cent in 1998, as jacket sales fell 17 per cent, NPD says.

But growing sweater sales can't replace the pivotal position in the business held so long by the jacket. "You simply can't sell enough sweaters and other separates to make up for that $400 jacket you're no longer selling," says Bud Konheim, chief executive of Nicole Miller Ltd.

Only a decade ago, most businesswomen were wedded to their jackets. Back in the 1980s, when male bankers and stockbrokers strolled around in shirt sleeves, the women were most likely to keep on their jackets all day. "I never took my jacket off in the office," recalls Mindy Ross, in her mid-40s and a senior vice-president at Salomon Smith Barney. "There was this insecurity about being very visibly a female."

Nowadays, from the receptionist to the executive ranks, it's no longer a surprise to see women in fitted sweaters, lower necklines, short skirts, sleeveless dresses. Such prerogatives were on display at this timeof year in the US when traditional office attire in many cities melted with the sweltering heat. Office workers nixed pantyhose and adopted the cool, resort look of sandals, cropped Capri pants and tank tops.

"Ever since women started dressing down at work," says Tahari President Mark Mendelson, "we can't tell them what to buy anymore." While many dressers at white-shoe law firms and other conservative workplaces continue to favour more formal business attire, the fact is that more women no longer feel compelled to wear their authority in a square-shouldered "power suit." In fact, the higher-ranking a woman is, the more likely she is to express herself in a more individualistic way, including wearing brighter colours and high heels. And for more career women, that means wearing a jacket is optional. "With the power suit, women were being forced to look like men, and there was a certain absurdity in that, a patriarchy that the fashion industry was complicit with," says Marshall Blonsky, a cultural criticand semiotician. "But now you have a new breed of women in their 20s who came on the scene where there's no male hierarchy, no rules to tell her what she can or cannot wear.... When a woman takes off her jacket, she is rolling up her sleeves and getting down to business."

The downtown Manhattan headquarters of Salomon Smith Barney is typical of many of the traditional firms on Wall Street, where most employees still adhere to business dress except on casual Fridays. Nonetheless, on a recent visit, the pervasive dress among women was pants -- and not skirts. Ross, one of the highest-ranking women in Salomon's marketing department, wore a grey Armani pantsuit, with a V-neck blouse--a style she says she wouldn't have worn back in the 1980s.

And typical of the younger generation who never got into the power-suit habit, Lizzie Stern, a 27-year-old vice-president at Salomon Smith Barney, was wearing pinstripe pants with a twin sweater set in gray cashmere.Such women show just how much professional women havechanged. "Now women have gained recognition as managers, we've been conditioned to accept women as authority figures and decision makers," says John Molloy, author of the popular "Dress for Success" wardrobe guides in the 1970s. "So now when a woman shows up in a dress, or in pants and a blouse, without a jacket, she is still able to command all the respect that she needs." Still, the apparel industry can't help but be distressed by all those missing jackets, which for years served as the centrepiece of virtually every fashion collection across the industry. Back in the 1970s, designer Liz Claiborne used to call the jacket the "outfit completer," the component that she designed first.

Tahari perfected his fashion formula with a signature look: heavily shaped jackets in heavy wool gabardine or crepe that sold for between $350 and $600 in the 1990s. While he updates his jackets every season, he often recycled the same pants, shirts and skirts that sold for between $150 to $280, assured that, he says, "thejacket moved the rest of the group."

The formula worked well until 1997, when sales of jackets and their matching pieces slowed dramatically with the rising popularity of casual dressing. Department stores found themselves overstocked with too many jackets and co-ordinates from midlevel brands such as Emanuel by Emanuel Ungaro, Dana Buchman, Anne Klein and Tahari. Even more vexing, many women simply kept wearing the jackets they had accumulated over the years.

Leslie Stevens, a New York marketing executive in her mid-30s, declares, "I haven't bought a suit or anything with a jacket in over a year. If I do have to go to an important corporate meeting, where I think I need a jacket, I just pull out something I already have," she says, noting that most of her wardrobe of about 15 black and gray suits are "still in the bags from the dry cleaners."

New York's fashion industry, clustered around Seventh Avenue in Midtown Manhattan, has been scrambling to break away from suit collections and the old formula ofdesigning and merchandising everything around the jacket.

Caliborne has slashed 40 per cent of its jacket styles from its lines this year and is refocusing the jackets it still carries as stand-alone items rather than the centerpieces of its collections. Indeed, more department stores and catalogues such as Spiegel are taking a page from the Gap and Banana Republic, presenting a spread of stand-alone items that don't necessarily co-ordinate with each other. "The modern shopper is looking for that great sweater or that pair of pants, so our buyers have to be sharper about picking only the best items and reordering them at the right time," says Lynne Ronon, a senior vice-president at Saks Fifth Avenue. Among this year's hot items at the upscale retailer: fitted and cropped stretch cotton shirts with three-quarter-length sleeves, designed to be worn without a jacket.

The Asian Wall Street Journal