Junior firms have long considered the teen market recession-proof. But as teens’ disposable income decline, makers are seeking ways to appeal to these finicky fashionistas-in-training.
This story first appeared in the February 18, 2003 issue of WWD. Subscribe Today.
Teens are typically considered a recession-proof demographic. After all, they are a trend-hungry group that often has more than one source of income, whether it’s a part-time job or a weekly allowance.
But the teen market isn’t what it used to be. Given the financial woes of large corporations such as McDonald’s and Kmart, teens aren’t landing those minimum-wage jobs anymore. Also, adults are spending less evenings out, lessening the demand for teenage babysitters — a popular part-time job.
According to Bear Stearns retail analyst Dana Telsey, unemployment stood at 5.6 percent in September, but among teens, it was at nearly three times that level, rising to more than 15 percent in August. This unemployment problem led to a poor back-to-school season, a crucial time for the junior sportswear business. The overall spending last b-t-s season dropped 20 percent from 2001, and teen clothing purchases declined the most: 23 percent.
This issue has sent a wake-up call to the industry. Since teens are holding on to the few dollars they have, manufacturers have to go the extra mile to capture their customers’ attention.
For New York-based Jordache Enterprises, which produces the Jordache, Vintage by Jordache, Gasoline, Kikit and Fubu Ladies collections, much of the focus of the brands has been denim. This proved to be a problem last b-t-s season when stores’ junior departments were swimming in denim pieces of all sorts. Teens already had several pairs of jeans — they didn’t need anymore denim. So, junior firms responded by increasing the assortment of nondenim items in collections.
“There has been a shift in the product mix at department stores, they really want to see more nondenim items,” said Jordache Enterprises president Liz Berlinger. “It used to be that we had 10 percent nondenim; now we have 30 percent.”
Berlinger said growth in the denim category has been particularly strong at mass retailers. Case in point: the company produces a denim-driven collection for Wal-Mart that is popular with the chain’s shoppers. But for its department store accounts, Jordache has shifted design strategies to offer nondenim pants, such as canvas and corduroy, in silhouettes similar to denim jeans.
“Teenagers are still shopping,” Berlinger said. “They are just in need of new things and I think this back-to-school season will be better than the last one when they see that there is more than just denim out there.”
For New York-based JLo by Jennifer Lopez, the company’s concerns extend beyond the sluggish economy. Lopez is about to endure some major competition from fellow artists Gwen Stefani, Eve, Eminem and Sean John, all of whom plan to launch their own women’s wear lines. This comes at a time when JLo by Jennifer Lopez is doing well, with an annual volume passing the $65 million mark.
Because of the increasing competition, JLo by Jennifer Lopez president and chief executive officer Denise Seegal said, “We must continue to move faster and stay ahead. The celebrity pac man is on our tails and we can’t rest now.”
Seegal said the company can compete with the newcomers since the line has been divided into three categories, allowing it to compete with firms that focus on different genres: denim, urban and trend. The denim category consists of denim jeans, shorts and skirts, as well as a denim jumpsuit, a style that’s been a top seller since the line’s inception. The urban category includes other signature pieces, such as velour sweatpants, shorts and jackets, as well as sweats and T-shirts in fabrics like cotton jersey and mesh. On the trendier side are halter tops and T-shirts, more fashionable pieces to work with jeans.
Cathy Rae, president of three-year-old Seattle-based Kali Wear, said it’s crucial for junior lines to offer several groups, in order to appeal to the varied fashion preferences of teens. “Diversity is very important,” she said. “We have a lot of sweaters in many different knits as well as denim jackets.”
Robert Kaye, president of Norwalk, Conn.-based Dogpilot, a new line of junior T-shirts, is convinced his line will fare well, despite the country’s lackluster economic situation. “If you have a good product, it’s going to do well,” said Kaye, whose 15-year-old daughter Kelly designs the pieces. “You can make money in any economy, it’s all about the product.”
WHERE THEY SHOP
A look at where females aged 16 to 19 do most of their shopping.
Specialty Stores: 40%
Department Stores: 23%
Chain Stores: 18%
Mass Merchants: 7%
Off Price: 4%
Factory Outlets: 3%
SHOPPING WITH GUSTO
A look at females aged 16-19 feel about shopping.
Love Shopping: 42%
Like Shopping: 38%
Get What I Need: 11%
Don’t Mind: 8%
Do Not Like: 1%
Source: Cotton Incorporated