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With summer jobs for teens scarce and their parents reeling from the weakened economy, the apparel industry is bracing for what could be a bumpy back-to-school season.
This story first appeared in the July 10, 2008 issue of WWD. Subscribe Today.
Industry executives fear that declining summer income for teens, coupled with tepid consumer spending because of high gas and food prices, tight credit and the housing slump, will translate into a drop in spending for b-t-s, which is the most important selling season after Christmas.
“I would anticipate that there will be some drop in back-to-school spending,” said Rob Callender, trends director for Northbrook, Ill.-based Teenage Research Unlimited. “Besides their own jobs, for teens, their parents are a big source of their money. We are finding that as parents spend more on things like energy and food, teens are having to cut back. They are learning that in this economy, ‘no’ really does mean ‘no.’”
Callender said during the past few years, parents have been sacrificing more to allow their teens to have more of what they want. But as the economy has worsened, and parents lose their jobs at a faster rate, teens are learning quickly that there just isn’t the money for indulgences like new clothes, when the basic needs for books, computers and other school supplies take precedence.
“Overall, teens tend to be a confident group, but they are a little shaky now,” he said.
Employers cut 62,000 jobs in June, the sixth straight month of job losses. The unemployment rate held at 5.5 percent after spiking half a percentage point in May.
For teens, the unemployment rate jumped from 15.4 percent in April to 18.7 percent in May, the highest level since 2003, according to a recent report by the Center for Labor Market Studies at Northeastern University.
And many parents are scrambling to find jobs — even those that pay minimum wage — which means more competition for teens. The result, the Northeastern report said, is that only one in three teens will be employed this summer.
In 2007, families with school-age children spent $7.6 billion on clothing and accessories, out of $18.4 billion total b-t-s spending, according to a survey by BIGresearch for the National Retail Federation. Although overall spending increased 4.5 percent from 2006, the clothing category was flat, as consumers spent an average of $231.80, compared with $228.14 in 2006.
Retailers will have to pump up their offerings this year in order to entice these shoppers.
On Monday, Kohl’s Corp. said it will launch its biggest marketing campaign ever surrounding the b-t-s season. The campaign, which includes a combination of 30- and 60-second television spots, print ads in Cosmogirl and Seventeen magazines, billboards in Milwaukee and New York and in-store promotions and contests, was designed to attract what the company calls a “cross-generational group of shoppers.” The ads will feature stars such as Lenny Kravitz, Avril Lavigne (who will be decked in her own line, Abbey Dawn, launching in the fall), Hayden Panettiere, Vanessa Carlton, Plain White T’s and The Red Jumpsuit Apparatus.
J.C. Penney Co. Inc., which said it will cut 2009 capital expenditures to $650 million from $1 billion and reduce store openings and renovations, plans to approach the b-t-s season aggressively. It is rolling out of three new brands in its junior area — Decree, Fabulosity by Kimora Lee Simmons and Le Tigre. The store is also planning a huge marketing campaign to surround these launches. The chain hopes that these brands will help strengthen its already more than $1 billion business in the area.
“We are looking at building on our strength,” Liz Sweney, Penney’s executive vice president of women’s, told WWD last month. “Juniors is a significant growth opportunity.”
Macy’s Inc. is preparing for the season by planning to run a documentary series on YouTube.com beginning in September. The series will plug the retailer’s exclusive American Rag label, which is sold on the junior floor.
Wal-Mart Stores Inc. is also gearing up with two new exclusive brands in the junior area — L.E.I. and Op. The Op brand will hit stores with a marketing campaign featuring seven young stars — Rumer Willis, Kristin Cavallari, best known for her role on “Laguna Beach,” Christina Milian, Josie Maran, Pete Wentz, “High School Musical” star Corbin Bleu, and Wilmer Valderrama.