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March was a rough month for those trying to scratch out a
living selling clothes to teenagers. It’s a tough enough gig in boom times,
finding clothes that will stay hot enough long enough to get them from the loading
dock to the sales rack. Betting on whether the clothes should be faded, ripped,
pastel, black, retro, cutting edge, or something that made perfect fashion
sense back in the ‘70s is tougher than picking a number on the roulette wheel.
Then there’s that whole store ambiance thing. Should the
clerks be friendly, or is it cooler if they are too cool to be friendly? And the
music must be just right. It must make adults flee like rabbits from the coyotes
while keeping the teen crowd breathlessly awaiting the next song.
Just ask GAP how tough teens can be. Back in 2001, teens
rated the Gap the Number 1 brand in all of teendom. Today, teens don’t even
mention the GAP in the Top 10.
Times are particularly trying today. March same store sales
in the teen apparel sector fell 5.9%. Teenagers dunked Pacific Sunwear for -8%.
They took American Eagle Outfitters on a -12% cliff dive, and punched Abercrombie
and Fitch right in the sixpack for -10%.
Of course the retailers will tell you that they were hampered
by an early Easter and too little fluoride in the water. April should be better,
they say, while furiously rubbing a Polo logo for good luck.
However, according to Piper Jaffray’s April survey of teen
shopping (the same survey documenting GAP’s fall from grace), spending on teen
fashion is down 20% year-over-year. Twenty percent!
And why not? The credit crunch is crunching one of the key drivers
of teen buying power – parents. So if teenagers don’t have enough angst
already, they may be shocked to learn that mom and dad no longer rank
traditional department stores (like Macy’s) as their favorite places to shop for their beloved teens. The new
number one for those bankrolling the younger set is Kohl’s. (Kohl’s? OMG.)
But according to Piper Jaffray, teens aren’t cutting back on
clothes because they have to, but because they want to. Piper Jaffray calls it a “discretionary
recession” for apparel because teens keep spending on electronic gizmos.
Maybe. But a recent AP story quotes a Deloitte Research economist
who figures that fickle teens have at least one thing in common with us Dads
who choose where to buy a shirt based upon how close the store is to Home Depot
- teens aren’t immune to the higher gas and food prices.
Plus, teen employment is down 5% year over year. With mom
and dad crunched and employers not hiring, no wonder $40 teen tee-shirts aren’t
selling.
Some even argue that there may be a secular trend at work
here. The same AP story reports that the teen-oriented web version of Elle
magazine features the “Self-Made Girl” who shows teenagers how to make their
own clothes. (Double OMG!) The site’s
editor explains that it’s no longer cool to haul around a high dollar designer
handbag with all the “‘economic unrest” going around. Meanwhile, Aeropostale, a
purveyor of cheaper jeans, delivered surprisingly strong March same store
sales. Sellers of bargain priced second hand clothes like Buffalo Exchange and
Plato’s Closet are also faring better than traditional teen retailers.
UBS calculates that teen retailer same store sales fell 0.5%
last year, vs. a gain of 3.3% in 2006 and 12.1% in 2005. Is that a secular or
cyclical trend?
Some even argue that teens are justifying buying less in the name of greener living.
Leave it to teenagers to get all frugal with a big recession
just getting underway.
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