Teen Apparel Retailers Struggle as Consumers Get Stingier

Jim Liebelt | Senior Writer, Editor and Researcher for the HomeWord Center for Youth and Family at Azusa Pacific University | Monday, September 16, 2013

Teen Apparel Retailers Struggle as Consumers Get Stingier

Teen apparel brands have been losing their shirts, and it's not a fashion choice.

Against a backdrop of prolonged consumer stinginess, reinforced by reports of a scant monthly increase in August retail sales, an anemic back-to-school performance may herald more economic sluggishness to come.

"The economy, employment, wages and retail sales continue to stagger along," said Matthew Shay, chief executive of the National Retail Federation. "While positive retail sales growth continues month after month, it is just not strong enough to move the needle."

Although some market indicators seem to be improving — housing prices and sales are up, as are stocks — consumer confidence is tumbling, according to a measure Friday from the University of Michigan and Thomson Reuters.

"This is not good news for retail buying this autumn, and there might be no change in these conditions right into the holiday season — a projection likely to dampen spirits in the retail sector," said Kathy Bostjancic, director of macroeconomic analysis at the Conference Board.

Teen brands such as Abercrombie & Fitch Co., American Eagle Outfitters Inc. and Aeropostale Inc. are staggering out of the shaky back-to-school season shunned by jobless youth and their cash-strapped parents, pummeled by unseasonably cold weather and perplexed by hazy fashion trends.

Same-store sales for all three companies slid in their most recent quarters. Since the beginning of the year, the trio's stock prices have suffered double-digit slides. Many brands have issued dire financial warnings for the remainder of 2013.

Some on Wall Street say the drop-off is an indicator of general economic malaise compounded by the disproportionate effect on young people of the recession and its aftermath.

Source: Los Angeles Times