Will teens start a fresh buying spree in 2003? Even the once high-flying teen sector was bummed out by the recessionary economy this year.
This story first appeared in the December 26, 2002 issue of WWD. Subscribe Today.
Teens still want the hottest item on the market,but since parents are watching their money,the tight family budgets put a hurt on the mall habit.Teen unemployment is also up,since retailers cut back on holiday hiring.Unemployment stood at 5.6 percent in September,but among teens,it ’s at nearly three times that level,rising to more than 15 percent in August,according to Dana Telsey,retail analyst at Bear,Stearns.
Teens generally account for 16 percent of all apparel sales,Marshal Cohen,president of NPDFashionworld Consumer in Port Washington, N.Y.,told WWD in October.But their overall spending this back-to-school season ropped 20 percent,from $640 in 2001,and their clothing pur- chases declined the most,23 percent.
This is sending a wake-up call to the industry.Because teens are holding on to their wallets,makers have to go the extra mile to capture their attention.
“If there is one group of consumers that is slightly recession proof, it ’s the junior customer.The problem is that there is a lack of must-haves in the stores,”said John Meyer,president of Zinc,a Los Angeles-based better junior sportswear brand.
There are some rays of hope,however.Reflecting on PacSun ’s 79 percent increase in third-quarter net income,which was accompanied, respectively,by increases of 24.7 and 11.7 percent in overall sales and comparable-store sales,Greg Weaver,the firm ’s chairman and chief executive,said:”We seem to be gaining market share with the help of multiple brands,and also feel our private brands are on target.”
Amy Wilcox Noblin,a specialty retail analyst with Banc of America Securities,said PacSun and Hot Topic are succeeding because they are destination stores for signature trends.
“They have been sheltered from the slowdown because when you go buy their products,whether it is surf or music related,they do not have as much competition,”said Allison Malkin,managing irector at Integrated Corporate Relations,an investor relations firm based in Westport,Conn.
She said PacSun,with sales of $580.8 million for the first nine months of the fiscal year,is benefitting from aggressively going after the young women ’s business.
But while offering the customer new,hot items is a definite must in 2003,makers should be aware:price will always be an issue.
According to Richard Clareman,president of Self Esteem:”The cheaper stores like Forever 21 have put a amper on retailers like Rampage and Wet Seal,which have in turn put a amper on the epart- ment stores like J.C.Penney.[Teen ]purchases are price driven and she is price savvy,so why wouldn ’t she shop at the cheaper stores.”