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Free-spending teens return to malls

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Youth-oriented retailers report strong sales for the second consecutive month, nurturing hopes of a broader upswing.

March 28, 2010|By Andrea Chang
  • Sabrina Sigal, right, and best friend Makenna Spiegel, both 14, raid the racks at XXI Forever at the Westfield Topanga shopping center. "Last year I didn't shop as much," said Sabrina, an eighth-grader from Calabasas. But now, "the urge has come."
Sabrina Sigal, right, and best friend Makenna Spiegel, both 14, raid the… (Bob Chamberlin / Los Angeles…)

The most coveted shopper these days isn't a Beverly Hills housewife toting a Chanel handbag. It's more likely her daughter.
By most accounts, teenagers are ideal consumers: Typically unhampered by debt, bills and mortgages, they spend freely and impulsively. Unlike their time-strapped parents, they hit the malls frequently and stay longer. And peer pressure at school makes it easy to justify dropping all of last week's allowance on the latest Lady Gaga album, Xbox 360 video game or premium jeans.
So retail industry watchers were alarmed when teen spending plunged during the recession. "Bank of Mom and Dad -- on pretty much all income levels -- basically shut down in the back end of '08 and the beginning of '09," said Christine Chen, a retail analyst at Needham & Co.

But now teen shoppers are making a comeback. For two months in a row, teen retailers have soared past sales expectations. Notably, Abercrombie & Fitch Co., known for its sexy advertising and casual-but-pricey fashions, snapped its 20-month streak of negative sales with an 8% increase in January.

Teens are hanging out at the mall after school again, goofing around with friends in dressing rooms, snacking on junk food at the food court -- and giving retailers hope that they'll help kick-start a greater wave of spending industrywide.

"Whether it be sports equipment, whether it be athletic footwear, whether it be fashion, whether it be electronics, the teen market is showing signs of life and positive growth," said Marshal Cohen, chief industry analyst at market research firm NPD Group.

To be sure, not everyone is joining the spending party, and many teens say they are more cautious than before and continue to hunt for bargains. Yet teens today are spending about 6% to 8% more in general compared with a year ago, Cohen said. "Clearly the teen is leading the charge when it comes to the return."

At the Westfield Topanga shopping center recently, Sabrina Sigal, 14, was browsing through racks of brightly colored dresses and striped shirts at trendy retailer XXI Forever, one of her favorite stores.

"Last year I didn't shop as much," the eighth-grader from Calabasas said. But now, "the urge has come."

Sabrina, who was shopping for spring clothing and a friend's birthday present, said she visits the mall about once a week. Her favorite trends include high-waisted skirts, cardigans, florals and small details such as lace, zippers and studs.

"I don't really set a budget for myself," she said. "I just buy what I love."

Nearby, her best friend, 14-year-old Makenna Spiegel, was checking the price tag on a bright red jacket with silver shoulder embellishments.

"The deals are great, and it makes us want to shop," Makenna said. "So we may as well get more."

That has retailers breathing a sigh of relief.

"2009 was a very difficult year for us, and we're starting to see the uptick," said Patti Whisler, regional planning manager of Macy's southwest region, which includes California. "Juniors is at the forefront of our improved business, so it's outpacing some of the other businesses that we have right now."

At surfwear seller Billabong, teens appear to be less concerned about price lately as they buy dresses, tops and shorts for beach season, said Candy Harris, women's brand director.

"Last year there was a hesitation when it came to making the final purchase," she said. "Teens were second-guessing their premium purchases and instead were really focusing on price-point items. The tide has started to turn this year."

Since the holidays, the Best Buy in West Los Angeles has seen business pick up among teen boys, who are snapping up the latest video games, celebrity headphones and online game cards, said Jackie Martinez, a store supervisor.

"They always come in. It was just a matter of whether they were buying or not," she said. "Before, they were probably just getting a main product, but now they're also getting the accessories to go with it because they have more to spend."

That's given many retailers the go-ahead to move forward with plans for new merchandise, stores or concepts.

Macy's is working on expanding its juniors assortment and increasing its social media and digital marketing efforts. Los Angeles retailer Forever 21 recently launched HTG81, a kids' line, and Love & Beauty, a cosmetics line. It also added categories such as swimwear and active wear, expanded its plus-size Faith 21 line and relaunched its men's line.

JCPenney is also upping its social media efforts and recently launched a celebrity fashion line for teens with Mary-Kate and Ashley Olsen called Olsenboye. Meanwhile, H&M, which sells merchandise for men, women, teens and kids, is aggressively opening new stores.

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