By  on September 14, 2010

The teen market has a new price leader, as Forever 21 displaced The Wet Seal Inc. for the lowest average unit retail (AUR) price this month.

According to a study by Eric Beder, analyst at Brean Murray, Carret & Co., Forever 21’s AUR declined to $15.34 this month, down 9.3 percent from its September 2009 AUR, while Wet Seal’s climbed to $17.36, up 13 percent from the year-ago level.

Beder noted that, while overall AUR prices in the teen sector rose 6 percent from a year ago, to $31.26, data from this month’s study “offer little consolation as competitive pricing wars continue to place significant margin pressure on many of our teen retailers. As teens are shopping closer and closer to need, pinching every penny along the way, we believe the back half of the year will remain one of the toughest selling periods for the teen space.”

The largest decline in AUR was registered, somewhat surprisingly to Beder and his team, by Aéropostale Inc., which tallied a 17.4 percent decline to $18.88 from $22.85 last September. This month’s average price put it in the same bracket as Charlotte Russe Holding Inc. ($18.89) and below Old Navy ($20.86).

“While we continue to believe that Aéropostale is one of the best positioned teen players to continue to drive strong results in this highly promotional environment, we are beginning to take a more cautious view on the teen player (and the whole teen segment) in the near term,” Beder wrote. “We note that Aéropostale’s AUR declined materially last month and same-store sales results have begun to reflect weakness as well.”

Aéropostale’s top-line results have been on a downward trajectory in recent months. After posting an 8 percent increase in June, comparable-store sales rose 1 percent in July and fell 1 percent in August.

Urban Outfitters Inc. was singled out for kudos in the report by Beder, who noted the Philadelphia-based retailer was able to increase its year-on-year AUR a full 18.7 percent, to $47.35 from $39.89, based on its “disciplined strategy and almost obsessive dedication to offering authentic product.”

Abercrombie & Fitch Co.’s Hollister brand followed a 30.6 percent decline in AUR in August with a 5.6 percent drop this month, to $37.36, while the flagship brand, the most expensive of the stores shopped, saw average price decline 2.4 percent to $57.20.

“The continuation of price cuts leaves Abercrombie’s brand positioning in a tenuous position,” the analyst remarked. “As we have stated before, we believe it is imperative for the retailer to maintain premium pricing if it hopes to continue to be thought of by its consumers as an aspirational leader.

“If Abercrombie can reverse the AUR bleed as it anniversaries the price cuts of last year, the potential for gross margin expansion would materially increase,” Beder said.

Focusing on basic items such as jeans and graphic T-shirts, the data were collected by Brean Murray personnel on Sept. 8.

Among contemporary retailers, the lowest AUR was at Wet Seal’s Arden B. division, which also qualified for the biggest jump in AUR, 32.3 percent to $42.68 from $32.25 last September, when it ran a buy-one-get-one-for-half-price promotion. The biggest decline in this group was at A|X Armani Exchange, down 10.4 percent to $71.74. The highest AUR was at BCBG Max Azria, $137.72. In the dress category, BCBG had the highest AUR, $228, by more than a two-to-one margin over Guess by Marciano ($103). Beder noted BCBG “can charge a premium multiple by offering high quality and versatility in its assortments.”

Retail stocks Monday enjoyed a 1.3 percent increase as the S&P Retail Index added 5.60 points to end the day at 431.26. The pickup fell between the 0.8 percent rise of the Dow Jones Industrial Average, to 10,544.13, and the 1.9 percent jump by the Nasdaq Composite Index, to 2,285.71. Fashion firms participating in the rally included Jones Apparel Group Inc., up 9.5 percent to $18.83, American Apparel Inc., 8.9 percent to $1.23 and Kenneth Cole Productions Inc., 7.6 percent to $13.24.

Earlier in the day, European and Asian markets registered solid increases, led by a 1.9 percent increase by Hong Kong’s Hang Seng Index, which closed at 21,658.35.

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