For all the self-congratulation, the Americans’ unprecedented display of unity is a measure of how much the $64 billion-a-year women’s fashion business is smarting. Financially, so many retailers have cut back or gone out of business in the last five years that only 50 major department stores and specialty shops in the United States still carry couture-level clothes. Stylistically, Europeans such as Giorgio Armani and Karl Lagerfeld pose stiff competition. But until now, New York’s fractious fashionites snubbed all attempts at unity. “Business is tough, so you need to go the extra mile to get the press, which gets you to the buyers, which gets you to the customer, which is the bottom line,” said Fern Mallis, executive director of the Council of Fashion Designers of America and the driving force behind the shows.

But this is Seventh Avenue and nothing–especially unity–comes cheap. Since models account for 70 percent of show costs, designers suggested slashing fees from $750 an hour (that’s 10 grand a day) to a mere $250. Modelgate erupted. Agencies threatened to walk! Designers threatened to do without! Finally, both sides air-kissed and agreed to a $250-to-$700 sliding scale. As if to tweak the muses, Calvin Klein populated his lower-priced CK show with “real” women. But superstars abounded, often unrecognizable in nose rings and greasy Eurotrashy hair.

The theatrics were a welcome diversion from the clothes. Taking their cue from Europe, the New Yorkers showed serious deconstruction. Slip dresses were sheer enough to reveal models’ G-strings. Babydoll looks reigned. Sweaters barely covered bosoms, and skirt hems skimmed fannies, not knees. There were oases: Ralph Lauren’s new, lower-priced line, called Ralph, won as many raves as his Asian-inspired couture collection. And Oscar de la Renta’s ladylike suits brought a sigh of relief from the ladies-who-wouldn’t-lunch-in-a-slip-dress. But the week’s most anticipated show disappointed: Richard Tyler, who made a name in L.A. designing knockout jackets for celebs like Julia Roberts, debuted a new collection for Anne Klein that was so gamine it missed the sportswear spirit that made the 25-year-old house so successful.

The biggest puzzle was how clothes so unabashedly sexual are supposed to fit in a culture struggling with sexual harassment in the workplace. Does anyone really expect grown women to don gauzy baby dolls? Retailers insist the bedroom won’t invade the boardroom. “It takes several seasons for [high fashion] to trickle down to the mainstream,” says Neiman Marcus fashion director Joan Kaner. At that, it’s likely to be “as a color, as a detail.”

How much does runway fashion matter? By itself, not much. The priciest clothes account for perhaps one half of 1 percent of women’s wear sales–but nearly all the publicity. “The sprinkles on the ice-cream sundae of fashion are what drives the rest of the business,” says Alan Millstein, editor of the Fashion Network Report, a monthly newsletter for retailers. Magazine spreads and gossip-column chatter fuel designers’ far more lucrative licenses–for socks, shoes, hosiery, fragrances. Selling a few $6,000 gowns is swell; selling tons of $6 undies and $60 bottles of perfume is even better. Still, there’s always the dream that this collection will hold the runaway hit, the next Halston’s Ultrasuede dress. Maybe that’s why, under the Big Top last week, Seventh Avenue looked more like the Flying Wallendas–doing it, once again, without a net.