View Slideshow
The modern day tracksuit at Hollister & Co.

Distressed denim, tracksuits, retro and stretch are the fashion trends expected to boost back-to-school sales this year.

And while b-t-s sales are expected to tick up from year-ago levels, those firms expected to do well will be the ones who can capitalize on the resurgence of denim and on the wear-now-buy-now trend.

IHS Global Insight’s Chris G. Christopher Jr. is forecasting 4.2 percent growth in b-t-s sales. He also said he expects $1 out of every $5.40 b-t-s retail sales dollars to be spent online this year. That’s in line with the 3.9 percent growth in b-t-s spend — $675 total versus $650 in 2015 — predicted by Brand Keys, a New York-based brand loyalty and emotional engagement research consultancy. Fung Global Retail & Technology’s managing director Deborah Weinswig is predicting a rise of 2 to 3 percent, up from last year’s increase of 0.4 percent.

National Retail Federation’s chief economist, Jack Kleinhenz, discussed NRF’s 2016’s b-t-s and back-to-college survey in a recent call hosted by Telsey Advisory Group. The survey estimated an 11.5 percent increase in combined spending for both groups to $75.8 billion, up from $68 billion last year, with the largest budget categories being electronics and apparel. About 73 percent are expected to shop between one to two months before school starts, up from 62 percent last year. Only 22 percent are expecting to wait until the last week or two, down from 30 percent last year. The expectation is that earlier b-t-s shopping should promote more full-ticket sales this season compared with 2015.

Kleinhenz also said helping with b-t-s sales is the cycle that he refers to as stock-up and make-do. That’s the cycle where spending increases one year as consumers stock up on supplies, and then sales drop off the following year as consumers get a second year of use out of longer-lasting items, such as backpacks and computers. By the third year, the cycle repeats as items need to be replaced.

Global strategy and management consulting firm A.T. Kearney completed a survey in which 49 percent of consumers said they plan to spend more this year for b-t-s than they did a year ago, but only 17 percent of those buying for older students said bigger-ticket purchases will include apparel.

Participants in the survey — 1,500 American adults 18 and over who said they plan to make b-t-s purchases this year — were asked 14 questions.

According to the report, while 49 percent plan to spend more, 34 percent said they will spend the same and 18 percent said they plan to spend less this year. Of the 49 percent, 30 percent plan to spend a “little more” and 19 percent plan to spend a “lot more.” On average 66 percent said they plan to shop for b-t-s between the Fourth of July and Labor Day weekend time period, while 13 percent plan to shop over the Labor Day weekend. Another 17 percent plan to shop throughout the year and only 4 percent said they made a purchase before July 4.

For those shopping for post-secondary students, the average median price for a “big-ticket” item is $205, compared with $105 for middle school/junior high and secondary school students. That’s compared with $51 for students attending primary and elementary school and $70 for pre-K and kindergarten students. Among the top categories for big-ticket purchases, 24 percent said it would be in electronics. Rounding out the top categories are footwear at 18 percent and apparel at 17 percent.

And while technology through mobile apps and personalized promotions are driving interest — 80 percent said they are likely to use personalized mobile offers from their favorite retailers and 61 percent have signed up or intend to sign up for mobile payment apps — most of the shoppers at 57 percent say they intend to do the bulk of their shopping in a physical store.

As for the key factors driving purchases, 91 percent said low prices, discounts and sales promotions were a top consideration. Store, online or mobile experience was second, at 85 percent. Rounding out the top three factors was free, expedited shipping, at 41 percent.

Jefferies analyst Randal J. Konik said a survey of more than 500 consumers to gauge b-t-s and back-to-college spending indicated that 50.8 percent intend to spend that same as last year, with those planning to spend more down to 25.5 percent and those spending less down to 23.7 percent. “Overall the outlook for back-to-school spending within apparel and accessories is positive with roughly half of respondents planning on spending more on apparel and accessories this back-to-school season….Kohl’s and J.C. Penney are the preferred department stores [and] Target and Wal-Mart are the preferred discounters, although Amazon is rapidly gaining pace,” Konik said.

Macy’s Inc., Kohl’s Corp. and J.C. Penney Co. Inc. sounded notes of b-t-s optimism last week as they weighed in with second-quarter results that showed some indication of strengthening in their apparel businesses.

Although there doesn’t appear to be a dominant fashion trend yet, multiple themes such as innovative denim and Nineties fashion — in the form of a Seventies redux through flared jeans, matching sets, platform shoes and choker necklaces — dominate the b-t-s looks. Key items in young men’s include destroyed denim and T-shirts, polo shirts and long-sleeve T-shirts. In juniors, the key items include bodysuits in different sleeve lengths, layered dresses, skater skirts in different prints and denim jackets in crop and longer lengths.

Gabriella Santaniello, founder of retail research firm A-Line Partners and former managing director for retail market research at Wedbush Securities, said, “Retro is hot, with vintage a subset of retro. Retro is a little older in look, the Eighties and Nineties, the silk bomber jacket over a slipdress. For the retro look in the denim jacket, think Grease — but more Rizzo, not Sandy.”

Other emerging trends are influenced by the ath-leisure lifestyle that’s been rocking apparel for the last few years. According to Santaniello, “Everybody is focused on denim, but what we’re seeing now is a lot of stretch. Stretch is in everything, even in men’s woven shirts. Mixing ath-leisure with denim means the fabric is now feeling a lot like a knit, providing the same level of comfort and stretch.”

Also back on the rise is the reemergence of the tracksuit a lá Juicy Couture, or in modern-day parlance, the combination of a sweatshirt hoodie with a matching pant. Hollister’s offerings for both teen boys and girls are called Matchbacks, with some hoodies featuring the Hollister logo that pairs with a coordinating sweatpant that has the Hollister name down one side of the pant leg.

According to FBR & Co.’s Susan Anderson, ath-leisure and other activewear styles are popular search terms. Activewear is still a key search term at more than 50 percent, and performance pants is the search term that has garnered the highest online interest from FBR’s survey pool.

For several analysts, American Eagle Outfitters is their standout b-t-s winner. Another is Urban Outfitters which beat expectations for sales and earnings in its latest report.

Cowen & Co.’s Oliver Chen said the teen chain “has established itself as the denim destination in the mall and continues to gain share at the expense of other teen retailers who are in the midst of fashion transitions.” In a recent mall tour with Marlene Marchewka from Façon Consulting at the Westfield Garden State Plaza in New Jersey earlier this month, she noted that consumers are shopping throughout the year — the new normal — instead of stock up for b-t-s. The new shopping pattern is due to the growth in mobile, which allows consumers to buy closer to need, rather than buy-now-wear-later items. She noted that the breadth of American Eagle’s denim offering and innovation covered fit, fabric and washes.

Stifel’s Richard Jaffe hosted a conference call earlier this month with Romney Jacob, director of Mindset for North America at trend-analysis and research service firm WGSN, which reviewed apparel offerings from American Eagle, Hollister, Abercrombie & Fitch and Urban Outfitters.

According to Jacob, retailers are operating with a greater sense of purpose, which has translated into “offering the consumer with a clearer and more compelling reason for her to shop their brands.” That is reflected in increased innovation, on-brand messaging and a clearly presented and edited trend message, she said.

As for American Eagle, Jacob said the strong denim offering, combined with on-trend, buy-now-wear-now merchandise should help drive traffic and full price sales. One example she gave for buy-now-wear-now is plaid in fall colors but in lightweight fabrications. But what’s distinguishing the teen chain is her call out as the distressed denim winner for b-t-s, an important theme in this fall’s fashion offerings. The retailer’s “Denim Revolution,” showcasing its next generation of fabric technologies via Flex/4 Denim and Denim X, a four-way stretch fabric, has been a merchandising success, Jacob said.

Jacob also said Hollister “should be a market share winner this back-to-school season.” She described the assortment as beachy, casual and festival looks that fit with the buy-now-wear-now trend that should drive full-priced sales. Hollister has the best fabric compared with its competitors, and offer the consumer high quality items at prices that represent significant value, she concluded.

In contrast, the Hollister brand’s older sibling Abercrombie & Fitch didn’t fare as well, with Jacob believing that the assortment was too broad with too many trends and not enough editing. That said, the subdued preppy color palette and expensive looking denim at value pricing featuring patchwork and distressing should appeal to consumers. The problem was the watering down of some of the teen trends to appeal to the older shopper, and Jacob not being sure of how well this would resonate with consumers.

At Urban Outfitters, Jacob said the offerings made it the leader in buy-now-wear-now, but found the stores uninspiring because the messaging didn’t show consumers in the store what to focus on or show clear-trend stories, even though Urban is likely the go-to place for vintage denim.

Separately on the denim front, NPD Group Inc. said Tuesday that after witnessing a decline in sales in the adult jeans category in recent years, that pattern finally might be shifting in the opposite direction. In the 12 months ended June 2016, U.S. sales of men’s and women’s jeans grew 2 percent to nearly $13 billion, with recent growth driven by a 4 percent increase in the number of pairs of women’s jeans sold. NPD said nearly 304 million pairs of women’s jeans were sold in the 12-month period ended June 2016.

Marshal Cohen, NPD’s chief industry analyst, said that the denim industry has the opportunity to turn the positive shift in volume “into momentum toward significant dollar growth.” He added that while it’s good to see that women are buying more jeans than they were a year ago, the problem is that the average spend isn’t growing. “The industry needs to embrace this opportunity, which means innovation and more inventory upfront to help perpetuate the consumer interest,” he said.

Certain components such as stretch have been a component in women’s denim, but are now finding their way to the men’s market, and in the teen sector. One difference is that the stretch is more advanced, such as American Eagle’s four-way stretch technology. And properties in the ath-leisure market, such as odor resistance, are finding their way into the denim market. It would be interesting to see how well denim sales trend for b-t-s, and whether any of the innovations in fabrication could be translated back, or further advanced, for the adult denim market.

load comments
blog comments powered by Disqus