When it comes to targeting the junior customer, one thing is certain — companies are in for a real challenge.
This story first appeared in the January 24, 2008 issue of WWD. Subscribe Today.
With tough competition and a shift in teen spending, the junior sportswear category continues to face major headaches. As teens become more fashion-savvy, they head to contemporary departments to stock up on brands such as Juicy Couture and True Religion, and appear to be less interested in lower-priced junior labels. This shift can be seen across the board, as many teen retailers reported steep declines in same-store sales for the holiday season; Pacific Sunwear just revealed plans to close its 154 D.e.m.o. stores, which targeted the junior streetwear market, and department stores work to keep up with popular specialty chains such as Hollister Co. and Urban Outfitters Inc.
The teen category is also changing outside apparel. As more members of that age group head to the Internet for entertainment and information, magazines targeting teens continue to struggle. Where there used to be six major titles aimed specifically at the teenage reader, there are now only three — Seventeen, Cosmogirl and Teen Vogue. Ellegirl, YM and Teen People have all folded.
There is some good news, though. While experts say teen spending is down overall, apparel is still a popular purchase for teens. According to a study done by Teenage Research Unlimited, a firm based in Northbrook, Ill., teens spent $100 per week on personal purchases in 2006, with clothing being the most popular thing to buy. Total teen spending in 2006 amounted to $179 billion.
That said, another study released in October by research firm Piper Jaffray & Co. showed teens are spending less on apparel, with a 24 percent decline since the spring. Teen girls are the ones cutting back, dropping 18 percent compared with a 9 percent decline for young men.
There remain clear winners in the category, however. The study found Hollister leads the pack among teens’ favorite places to shop for the sixth consecutive year. The subsidiary of Abercrombie & Fitch Co. was followed by West Coast Brands, American Eagle Outfitters Inc., Abercrombie & Fitch Co. and Forever 21.
What is clearly missing from that list is a major department store name. As teens favor specialty stores to complete their wardrobes, department stores must find new ways to compete.
“The young girl has a lot of options these days,” said Rob Smith, executive vice president, general merchandise manager for juniors, dresses, suits, coats, swim, intimates, kids’, fragrances and cosmetics at Macy’s East. “What I’ve found is that we have to work a lot harder to grab her. The price and product have to be right and it’s not as easy as it used to be.”
Smith said since many teens are spending in the contemporary department, they aren’t as price resistant as they used to be. That is a problem for the junior area, since that was the department teens used to turn to to stock up on clothing, since it’s where they can get the most for their money.
“We see her going more upscale, and she will spend more money on the things she really wants,” he said. “She will spend her money on a pair of True Religion jeans, so for us in the junior department, those $30 jeans are a harder sell.”
To be sure, there are labels on the junior floor that do quite well. Smith noted Guess remains a best-selling brand.
“Guess does very well and they are the highest-priced line on the junior floor,” he said. “They have always positioned themselves as a young contemporary brand, which has really worked. Guess is a great success story.”
Smith said while traditional junior brands like XOXO and Rampage have significant spaces on the junior floor, brands like Heatherette, Harajuko Lovers and Japanese label Tokidoki are quickly growing in popularity.
Marshal Cohen, chief industry analyst for The NPD Group, said while he believes many junior brands have improved their product mix, there is still a lot of work to do.
“The junior customer is more complex, more savvy, more streetwise than she used to be,” he said. “Do I think that Guess does a good job? Yes. Do I think that Wet Seal is doing a better job? Yes. But when you look at the broader picture here, there is still a lot to be done.”
Cohen said that because teens are getting larger, just like the rest of the American population, the junior sizing scale should be reworked.
“I see the sizing issue as a big dilemma. Junior sizing now is geared to the girl with a very small frame, and that just isn’t how it is anymore,” he said. “The junior customer is growing, just like everyone else. I think that retailers and manufacturers need to take a good look at their customers inside and out.”
Another issue that needs to be addressed in juniors, Cohen said, is the actual junior customer base. It’s not always just a teen shopper on the junior floor, but her mom is also spending money there on clothing for herself.
Gregg Fiene, chief executive officer of junior and young contemporary brands Selé and Taylor and Hyde, has been in the business for years, first founding junior megabrand XOXO. He agrees with Cohen, saying the older women shopping in the department are not often targeted.
“If you go to the junior department at Macy’s Herald Square at 2 p.m. on a weekday, you won’t see that 13-year-old shopping there,” he said. “You will see that crossover customer. The woman who isn’t in school. She may be buying for her teen, but she’s also buying for herself.”
Fiene said he believes some progress has been made, as department stores continue to strive to compete with stores like Bebe, Forever 21 and H&M.
“If junior departments stayed the way they used to be, there would be no more junior departments,” he said. “It’s very important that we know who this customer is — it’s the teen and her mother shopping there. The junior floor is filled with women looking to get fashion for a price, they are renters, not owners. The owners, with more money to spend, shop in contemporary.”
Sheryl Leff, junior market analyst at the New York-based The Doneger Group, said she thinks there is a void for more sophisticated, young contemporary clothes.
“There is a big opportunity there, a void in the young contemporary space,” she said. “There is still that kid who is not the traditional junior girl, she isn’t in school anymore, but is looking for her first job. She is still influenced by celebrities and needs affordable clothes. It’s almost as if department stores need to create a new zone for this customer — she needs clothes for her first job and clothes to wear out to a club. Forever 21 is filling the void to some degree, but there really isn’t enough of it out there.”
For Iconix Brand Group, which owns a range of junior brands including Rampage, Rocawear and Candies, evolving and upgrading product are a constant.
“This whole junior sector has been evolving, even though each of our brands are all quite different. We’ve started calling them ‘young contemporary’ since they have become more sophisticated,” said Lanie Pilnock, vice president of trend and design at Iconix. “You have to target everyone on the junior floor. The teens are there, but there’s also that 20-, 30-, 40-year-old on the floor who is looking for fast fashion. The challenge is to capture that H&M, Forever 21 experience and bring it to the junior department. It’s no longer about grabbing that back-to-school shopper who stocks up once a year. No one shops that way anymore.”
In order to target all of these women, Pilnock said they tend to target that 20-year-old, and the rest will follow.
“Thirteen-year-olds want to be 20, and 40-year-olds want to be 20, so 20 seems to be the magic age,” she said. “We target that 20-year-old attitude.”