Tweens Spend Billions At Stores

By Tom Tobin; Source: Democrat & Chronicle

Children, parents like to say, are always growing up too fast.

Now, at least, they're doing it in style.

"Tween" fashions and accessories, those marketed to children, usually girls between ages 7 and 14, are a multibillion-dollar business in America with a healthy and growing component in the Rochester region.

Justice, the latest evolution of the Limited Too brand for girls, has a devoted clientele at Eastview Mall in Victor, as do Claire's Accessories, Icing and Abercrombie and Gap stores aimed at kids.

One doesn't have to walk too far along the mall promenades to find a store that, if it doesn't cater strictly to young children, has a wide enough inventory to encompass them. The tween market is a fast-growing niche in the apparel and accessories world — kids of that age spend $30 billion annually and influence as much as $150 billion in spending by their parents.

Marketing costs for tweens were estimated at $17 billion in 2006. In 1983, the tween dark ages by comparison, the national marketing budget for that age group was a mere $100 million.

How young is young in the world of modern marketing? Ali Nordeen, who sells cell phones at the Sprint kiosk at Eastview, said he recently sold a phone to a family buying it for a 4-year-old.

"I know other 6-year-olds who know how to use the phone to order games and things," Nordeen said.

In a 24-hour, 7-day-a-week information and entertainment culture, pre-adolescents are eager sponges of all that is hip, fresh, appealing — and expensive. A sequined or lace T-shirt sells for about $21, and designer, brand-name sweatshirts can run as high as $80, though these stores in general are finding a need in the rough economy to lower prices to compete with the big-box stores.

"A lot of this awareness goes back to TV," said Marie Cornelius, marketing director at Eastview. "They watch Disney, High School Musical, The Cheetah Girls, Hannah Montana, and pick up what's stylish."

Parents are trying to keep the lid on as their children move from having dolls to getting dolled up.

"My children are just more savvy about this sort of thing," said Karyn Lederman of Pittsford. "They like glitzy, bright, neon colors and that sort of thing, lip glosses, jewelry and know where to go to get them. When I was a kid, I had a pair of sneakers and one of dress shoes. Now they have a closetful of shoes."

It's crazy," said Leda Messineo of Webster. She is the mother of two tweens, one 10, the other 12. "My 12-year-old is going into the seventh grade and it's very important at that age that she has the right style. We try to put out the right values about clothes and cost, but there's a lot of pressure."

Some of the tween fashions are inappropriately provocative. "I tell my kids they're going to school, not a nightclub," Messineo said. The famously risqué clothing store Victoria's Secret now has a department aimed at college women, with styles that could go younger. Costume stores now feature miniskirted items designed for trick-or-treaters.

There's a niche within the niche, too — retailers who keep the style and more adult attributes without erasing the childish fun and innocence. Sweet and Sassy, on Monroe Avenue in Pittsford, offers salon and spa packages for girls tween-age and younger. Birthday parties, which can include a ride for 10 girls in a pink limousine, are especially popular. The top-end price, for 17 girls, is $450.

"The girls love it. They get their hair done, their nails," said owner Deidre Rosenberg. "It's dress up."

That used to mean raiding your mother's closet on a rainy day, long before Hannah Montana rode into town.

Retailers Lure Teens With Biker Jackets to Add Sales (Update2)

By Cotten Timberlake (Source: Bloomberg)

Nordstrom Inc. and Urban Outfitters Inc. are pushing faux-leather biker jackets, plaid shirts and “boyfriend jeans” as retailers seek to revive back-to-school sales.

“If the stores don’t get the fashion right, nothing else can make up for that,” said Jennifer Black, the owner of Jennifer Black & Associates, a Lake Oswego, Oregon-based apparel research firm. “There is a lot of fashion newness now after a two-year drought.”

Chains are touting the most new fashion trends since 2007, she said. Some retailers have latched on to looks popularized in the vampire film “Twilight” to boost sales in July, August and September, said Roseanne Morrison, fashion director at Doneger Group. Back-to-school is the busiest shopping season other than the Christmas holidays.

In stores open at least a year, sales at apparel chains that cater to teenagers fell 13 percent in the five months through June, according to the International Council of Shopping Centers. Retailers report July sales results this week.

This back-to-school season, “there are key ‘must have’ fashion items (boyfriend jeans, blazers, plaid shirts) that the teen customer will seek out once the school season starts, which could result in improved sales trends” in the second half of 2009, Christine Chen, an analyst with Needham & Co. in San Francisco, wrote in a report yesterday.

Motorcycle Jackets

Vampire styles are part of a larger trend toward gothic, edgier looks that include the black fake-leather motorcycle jackets, worn with black or gray “destructed” denim or leather leggings, and graphic T-shirts or flowy tops, said Morrison of Doneger Group, a New York-based trend forecasting firm. She also sees “a preponderance” of zippers, studs, and ripped clothes.

Nordstrom’s Web site featured such jackets for teens, including a Lulu & Veronica biker jacket for $44.90 and a Sashimi-brand version for $68. In October, the Seattle-based retailer will start selling goods inspired by the sequel to “Twilight.” The first film, released last November, has taken in almost $400 million worldwide at the box office.

Hot Topic Inc., a chain based in City of Industry, California, sells licensed “Twilight” clothing and accessories.

Nordstrom executives weren’t immediately available for interviews for this article, said Brooke White, a company spokeswoman. Hot Topic doesn’t comment on specific products, said its spokeswoman Leigh Rodwick.

‘Boyfriend’ Look

Retailers are also pushing the farmhand and boyfriend fashions, Morrison said. Farmhand style, inspired by the trend toward seasonal natural foods, “revolves around denim,” she said. “For women, it’s soft and prairie-inspired, with crinkled shirts. For guys, it’s plaid shirts, rugged boots, worn denim.”

The “boyfriend” look features oversized, loose-fitting garments for girls and young women. It may have been spurred by actress Katie Holmes and pop singer Victoria Beckham, Black said. Urban Outfitters, based in Philadelphia, featured tweed and other boyfriend jackets for $48 to $88. American Eagle Outfitters Inc. offered nine styles of boyfriend jeans priced $19.95 to $49.50, and men’s plaid shirts in poplin and flannel.

Urban Outfitters Chief Financial Officer John Kyees didn’t return a call seeking comment. Representatives for American Eagle declined to comment, Jani Strand, a spokeswoman, said.

‘Fun Again’

Retailers in 2008 pushed less interesting screen-print T- shirts, dresses and sheepskin boots, said Morrison. Hooded sweatshirts have dominated for several years, as have khakis, and polo shirts. Marshal Cohen, chief industry analyst for market research firm NPD Group Inc. in Port Washington, New York, described last year’s fashions as boring, the colors dull.

“There is some excitement out there,” said Cohen. “Some of the stores look terrific, with bright colors and new silhouettes. It’s fun again.”

August and September school-related sales may climb 2.3 percent to $26.5 billion after last year’s 1.4 percent drop, according to the ICSC. They jumped 3.3 percent in 2007. The group, which relies on U.S. Commerce Department data, predicts family clothing will gain 2.5 percent in July through September compared with last year.

“You have started to see little signs of growth here and there,” Mike Niemira, the New York-based ICSC’s chief economist, said in a July 24 telephone interview. “It will be slow initially and then accelerate as the holiday season approaches.” U.S. holiday sales last year dropped the most in four decades.

‘Rave Reviews’

“For the coming back-to-school season, Aeropostale has increased its product testing and has received rave reviews from teens for our fall merchandise,” said Ken Ohashi, a company spokesman.

Standard & Poor’s 11-company Midcap Apparel Retail Index -- which includes Urban Outfitters, Aeropostale Inc. and American Eagle -- has climbed 70 percent this year, after plunging 45 percent in 2008 and 30 percent the year before. The index declined 3 percent at 4 p.m. New York time today.

The U.S. unemployment rate in June reached its highest level in almost 26 years, threatening consumer spending, which fell in the second quarter.

The average family with students in kindergarten through 12th grade plans to spend $548.72 on school merchandise, a 7.7 percent decline from last year, according to a survey released July 14 by the Washington-based National Retail Federation and BIGresearch.

“The little splurge opportunity may evaporate altogether if shoppers can’t find something different and intriguing to buy,” Wendy Liebmann, chief executive officer of the New York consulting firm WSL Strategic Retail, wrote in a July 23 report.

More spending will shift to September as students on tight budgets wait to see what classmates are wearing to make sure they get it right, said Adrienne Tennant, an apparel analyst at Friedman Billings Ramsey & Co. in Arlington, Virginia.

Innovation, the ICSC’s Niemira said, is a logical outcome of the slowdown. “Everyone learns from recession,” he said.

Hollister: The Shop That Smells Like Teen Spirit

By Lisa Armstrong; Source: The Times Online UK

How do you sell to teenagers, a notoriously fickle but tantalisingly lucrative market? Let’s begin by imagining retail hell on earth for anyone over 30. No one knows where anything is. You can’t see what anything is. The music pounds, the ambient smell is the store’s own-brand perfume and the staff are all better looking and wearing fewer clothes than you. If you’re over 30 they’re also much younger than you. But, hey, if you’re over 30, what are you doing here in the first place?

Admittedly, this could be any number of stores on the high street but one chain has taken the modus mis-operandi, turned it into an art form, and provided a glimpse of a more fragmented retail future in the process.

If virtual shopping on the internet is inexorably cannibalising actual shopping, then arguably, the only way the real version can survive is by creating an experience that can’t be replicated online.

Hollister, the southern Californian (or in Hollister speak SoCal) “surfer” brand has rounded up the marketing orthodoxy and kicked copious amounts of sand into its face. It’s paying dividends. While Hollister’s better-known (in the UK) sibling brand Abercrombie & Fitch has been buffeted by the recession — most recent net sales figures were down 26 per cent on the same period a year ago — Hollister is holding up. Its UK store in the Westfield shopping centre in West London has had queues snaking outside its clapboard-cladded front right through the downturn.

The opening last month of the 40,000 sq ft flagship (or in Hollister speak) Epic store in SoHo has endowed Manhattan with its first real teen destination store. The Topshop that opened in SoHo earlier this year is probably out of the price range of most 13-year-olds; American Girl, the vast “premium lifestyle” store on Fifth Avenue that sells $95 and upward dolls and accessories alongside a teashop where thousands of little middle-class girls are encouraged to bring along their American Girls dolls, targets the 3 to 8s.

According to marketresearch.com, America’s teen population is growing faster than the overall US population. In the UK, it has been shrinking since 1995 but it’s still tempting, low-hanging fruit. Get them young, and you can siphon them towards your other brands later on (Hollister’s sibling labels include Ruehl no 925 and Gilly Hicks). Yet apart from Jack Wills, a brand that has an invented history, as does Hollister and Abercrombie, and a similar hoody-and-sweatpants aesthetic, albeit with a distinctly British, neo-Sloaney tinge, no British companies have created teen-targeted environments. Jack Wills has doubled revenue each year, although it’s deliberately niche, with around 35 stores, including the original one in Salcombe, Devon, and a turnover last year of £42 million against Hollister’s 1,100 US stores and revenue of $1.5 billion.

The biggest British retailer in the nine-to 15-year-old market is New Look, which sells its 915 range in 395 of its stores. But while New Look uses e-mail and Bebo to talk to its young customers (its Bebo group has so far amassed 32,000 friends), in the store it does nothing to create an area specifically to target to this group. “No one in the UK does,” says Moira Benigson, managing partner of the MBS Group, an executive search company. “And if they think they are, they’re deluded. Then again, the British teen market is increasingly sophisticated, probably more so than in the US, with the internet a key player, and vintage making a comeback, along with a Camden Market-type atmosphere.”

As it happens, the Hollister Epic store does have a slightly vintage-meets-Camden-meets-polished-California veneer. Not that anyone at Abercrombie & Fitch Co, Hollister’s parent company, officially pays any attention to market research. Founded in 1992 (although accorded to its invented lore, it was established in 1922) by Mike Jeffries, the Hollister/Abercrombie HQ, which staff refer to as its campus, is based in Ohio, a surprising choice perhaps, until you consider that US clothing giant The Limited (which includes Victoria’s Secret) is also based there.

Press shy and regarded as something of a seer by his staff, who refer to “Mike” in the same reverent tones that Dorothy et al refer to the Wizard in Oz, 62-year-old Jeffries likes to think of the new Epic store as a Disneyland for teen shopping. “Mike sees Hollister as an education,” Hollister’s head of brand marketing tells me (no one apart from Mike likes to give out names). “He’s not opportunistic. He’s not doing this to appeal to a gap in the market. It’s more of an artistic vision.” What Jeffries has really done is taken Ralph Lauren’s famous Rhinelander store (the historic building on Madison Avenue, New York, that Lauren turned into a monument to his Wasp vision of American fashion 30 years ago) and re-created it for teens.

Like the Rhinelander — or for that matter Disneyland — The Epic has a narrative. Staff sport bikinis or, if they’re male, shorts and waxed, worked-out chests. Giant screens transmit 77 live feeds from Huntington Pier, California; time your trip to the cash register right and you’ll get some buff surfer catching a wave right at you. There’s a (semi) secret Hollister language too, although it’s not blatantly telegraphed, because “kids like to find this stuff out for themselves”. The store is divided into his (dude) and her (betty); the warrens of rooms are called shacks (on the dude side) and cottages (on the betty side); the temperature, scent and music are all coordinated by a designer (there are dedicated scent bottles behind the scenes with strict instructions for the staff; three pumps from a distance of six inches).

It’s dark as Hades (although there are strategically placed spotlights), noisy too (although there are strategically placed leather armchairs for the exhausted parent).

It’s also throbbing with energy and no expense has been spared — the dark panelling, vast antique-looking chandeliers, Parisian-fronted perfume shops-within-shops and furniture have all been custom made. The four floors certainly help to foster the illusion of a happy, beautiful, hermetically sealed surfie eco-sphere: outside is a hot sweaty Manhattan street, which in six months will be a freezing Manhattan street. Inside it will forever be a feel-good July in SoCal.

Being a tight-lipped sort of company, Abercrombie & Fitch won’t reveal how much it spent on the Epic, but it clearly cost millions. What categorically isn’t part of the theme is conventional service.

The staff are unashamedly chosen for their looks rather than their ability to locate a T-shirt in your size. Hollister gets away with this by advertising for “store models” and holding castings rather than interviews. There were 5,000 applicants for the Epic store — unsurprisingly since the most recent ad campaign, shot like all of Hollister’s iconography by Bruce Weber, stars a store model.

I visited the Manhattan Epic with my teenage daughters as cover. Ironically, we all had a similar visceral reaction: you can’t help but be impressed by a store that has gone to such trouble with its fixtures and fittings, when other chains at this level shove everything on plastic hangers or leave it to get trampled on the floor.

The good-natured enthusiasm of the staff charmed us too. The American “have-a” mantra may be fake but give me insincere cheer over heartfelt curmudgeonliness — a very polite friend was thrown out of the Westfield branch of Hollister recently because she had the temerity to complain about something. We all coveted the chandeliers. We were suckers for the clothes. And we all wished that the staff knew where anything was because climbing up and down those four sweeping staircases is exhausting.

Perhaps the generation gap isn’t as distinct as Hollister maintains. I recommend the swimwear department in the basement to bikini-wearers of all ages: it had a fantastic selection of styles and shapes at a time when the rest of New York had sold out and the subdued lighting in the changing rooms comes into its own when you’re trying on a strapless bandeau and frilly briefs.

But creating an idealised teen-theme park enables Hollister to create a point of difference for its merchandise, which is the kind of classic, off-duty American wear — checked shirts, faded jeans, leather jackets, hoodies, casual, drapey knits, all in super-soft combed cotton or cashmere mixes — that probably needs some theatrics to make it edgy My daughters found a stack of clothes they wanted (beware, prices are much higher than Primark) but agreed that if you are in a hurry, it’s best to shop online and save the store for an excursion.

As for me, I just wish there were more stores paying this much attention to creating an idealised adult world.

Borders Aims to Capitalize on Teens With New Shops

By JEFFREY A. TRACHTENBERG
Source: Wall Street Journal

Borders Group Inc. is launching a teens department to capitalize on such hot writers as Stephenie Meyer and Sarah Dessen, as young-adult authors provide a badly needed lift to booksellers.

The Borders Ink shops, which will stock graphic novels, fantasy and young-adult titles together, are expected to be available in 80% to 90% of the 513 superstores Borders operates nationwide by the end of August. Some have already opened in Michigan.

The space for the departments has often been carved from areas that previously sold music and DVDs, whose popularity has faded with bookstore shoppers.

Borders also plans to stock merchandise it thinks teens will snap up, including a variety of goods associated with Ms. Meyer, the writer of the vampire "Twilight" series, such as bookmarks and pencil cases.

"We want this to be about more than just the book," said Kathryn Popoff, vice president of merchandising/trade books at Borders, based in Ann Arbor, Mich.

Borders, the nation's second largest bookstore chain by revenue, has also planted its teen flag on Facebook, where it has created a Borders Ink page in hopes of becoming a "source for info on all things teen lit and graphic novels." One of the lead items posted on Monday featured the Scott Pilgrim series of graphic novels created by Canadian cartoonist Bryan Lee O'Malley.

The retailer declined to say how much it is spending on its teen initiative.

At a time when book retailing is slumping, young-adult titles and graphic novels are still delivering growth. Albert N. Greco, a professor at the Fordham University's Graduate School of Business Administration who studies the book industry, estimates that young-adult fiction, fantasy and science fiction will generate $744.3 million in U.S. publisher revenue this year, up 13% from $659.1 million in 2008.

That compares with U.S. publisher revenue of an estimated $9.73 billion for consumer books as a whole, a 4.7% decline from 2008's sales, according to Mr. Greco.

A spokeswoman for Barnes & Noble Inc., New York, the largest U.S. bookstore retailer, said it has long offered separate teen areas.

At one Barnes & Noble store in midtown Manhattan, teen titles are in the lower level, while graphic novels, which Barnes & Noble merchandises as a separate category, are on the second floor.

The teen category is now so attractive that Harlequin, the romance publisher, recently launched a new Harlequin Teen imprint, aimed at readers aged 12- to 18-years-old. Natashya Wilson, senior editor of Harlequin Teen, part of Toronto, Canada, based Torstar Corp., plans to publish three teen titles in 2009 and 17 in 2010, with the first, "My Soul to Take" by Rachel Vincent, coming out next month.

FOLLOW-UP: 'P.S., we're going after the tweens'

TRADING MARKETS.COM

Teen retailer Aeropostale Inc. is sizing up a younger customer, and analysts are calling it a perfect fit.

The clothing seller has created a new chain for kids ages 7 to 12 and plans to use New Jersey as the concept's primary launching pad.

The new chain, called P.S. from Aeropostale, targets the slightly younger siblings of the core Aeropostale teenaged customers, ages 14 to 17. That age group, 7 to 12, dubbed "tweens" for the years between early childhood and teenager, doesn't have a mall store to call its own, and Aeropostale aims to give them one.

"It's a bit of an untapped market overall," said Tom Johnson, chief operating officer of Aeropostale. "It's a $14 billion market which we think is really an opportunity for us.

"For years we've been seeing the younger siblings of our current Aero customers desperately trying to wear Aero. They desperately wanted to be like their bigger brother or sister. So we thought it's a natural extention for us to do that."

While other chains, such as Limited Too, now known as Justice, have focused on tween girls, P.S. from Aeropostale has clothing for both boys and girls. The 7aEUR"12 boy in particular, Johnson said, "certainly doesn't have many places to go" for clothes dedicated to his age group.

Aeropostale also will be competing with stores that sell to the 7-12 segment but don't focus exclusively on it, such as The Children's Place, Old Navy and Gap Kids, as well as Target, Wal-Mart and Kohl's.

The first New Jersey P.S. from Aeropostale store opened this month at Willowbrook Mall in Wayne. The Willowbrook store is the second in what Aeropostale executives envision will be a chain that could eventually include as many as 500 stores. Six more P.S. from Aeropostale stores are planned to open in New Jersey malls by the end of the year.

New York-based Aeropostale has some corporate offices in Wayne, next to Willowbrook, and the company wanted the first group of P.S. stores to be close enough for frequent visits by executives. "We're focusing on the New Jersey market so we can get to the locations and make sure that we understand the customer's reaction, our reaction, the marketing, the pricing, the promoting ... everything," Johnson said.

Aeropostale has been flying high as other teen and apparel retailers have faltered during the economic downturn. Its June same-store sales -- sales at stores open at least a year -- were up 12 percent during a month when competitors were down: Abercrombie & Fitch was down 32 percent, and Gap Inc. was down 10 percent.

The secret to Aeropostale's success has been capturing cost-conscious teen consumers and their parents. Its niche as a fashionable but affordable alternative to stores such as Abercrombie & Fitch and Hollister has helped it grow sales in the midst of a spending downturn.

The first P.S. store opened at Palisades Center Mall in West Nyack, N.Y., in June, and analysts were impressed with the new concept. Howard Tubin of RBC Capital Markets, in a note to investors, called the new store "kid cool, mom friendly" and said, "Based on what we saw so far of this new concept and the strong momentum in the core [Aeropostale] brand, we believe [Aeropostale's] market share gains can continue." Sterne Agee analysts Margaret Whitfield and Jennifer Milan reported, "P.S. looks like a winner," praising the strong product mix and value-oriented prices.

The Willowbrook store as well is getting rave reviews from another group that Aeropostale executives are eager to impress -- the kids. "This is awesome," yelled Andrew Bandala, 8, of Butler, as he bounced onto the bright red couch outside of the fitting rooms. The seating area is equipped with Dr. Seuss-like speaker tubes that let parents waiting outside communicate with children in the fitting rooms.

Andrew and his brother Matthew, 6, also were impressed with a mirror in the middle of the store with a camera embedded that lets kids take their picture and display it with various special effects. "Cool!" the boys shouted as they struck various superhero poses for the camera. Their father, Alejandro, was helping older brother Alexander, 9, try on polo shirts and said he was impressed with the store's design and the merchandise.

Johnson said Aeropostale wanted to create a store that appealed to both kids and parents. The stores, which average 3,500 square feet, were designed to be bright and well-lit to help moms and dads read labels, but with fun features for the kids. "The store and the product really needed to resonate with both the mom and the kid," he said.

The company expects to have about 14 P.S. stores open by the end of the year, and sees the potential for 500 stores eventually. "We are definitely looking at this as a go-forward business and not as a test," Johnson said. "Based on what we believe is the need in the marketplace, it could be a very big business."

E-mail: verdon@northjersey.com

J.C. Penney to Court Teens in Back-To-School Push

NEW YORK (Reuters) - Department store operator J.C. Penney Co Inc is launching a website for teenagers as part of its effort to drive demand in the key back-to-school season, after months of sales declines.

Penney, like rivals Macy's Inc, Kohl's Corp and even higher-end chains such as Saks Inc and Nordstrom Inc, has taken a hit in the recession, which has dampened demand for new clothes and home goods.

This year, Penney is trying harder to reach web-savvy teenagers who shop for themselves in the back-to-school period but may have less money to do so this year.

The back-to-school period is second only to the year-end holiday season in terms of sales for retailers.

The company's Chief Executive Myron "Mike" Ullman said in June that its website serves as a powerful means to communicate its in-store promotions.

Penney's website, jcp.com/teen, consolidates "microsites" it already had for brands like Decree and Arizona, with newer ones such as RS by Sheckler, after skateboarder Ryan Sheckler, said Chief Marketing Officer Mike Boylson.

Overall, Penney is spending a bigger share of its marketing budget online, including its Facebook page, and letting teenagers sign up to get text messages with discount offers.

While Penney did not give marketing budget details, a prior regulatory filing showed Penney spent $331 million on direct-to-consumer advertising, which includes Internet advertising, in 2008.

This year, an average family with children in kindergarten through grade 12 is expected to spend $548.72 -- 7.7 percent less than last year -- on school products, a National Research Federation study conducted by BIGresearch showed.

Moreover, the department store sector posted an 8.5 percent decline in June same-store sales, ThomsonReuters data showed, with analysts expecting little respite ahead.

Boylson said he expects strong back-to-school demand in its flagship Manhattan store, slated to open on July 31.

Penney shares closed at $26.67 on Monday on the New York Stock Exchange.

(Reporting by Aarthi Sivaraman; Editing Bernard Orr)

Teen Retailers Out of Fashion

Source: Retail Sails

We got an early peek into same-store sales at a couple of teen retailers today, as both Hot Topic and Zumiez reported monthly sales results for June. Teen and mall-based retailers have been among the hardest hit over the past year, and there is not expected to be much improvement for the rest of the summer. Retailers hope the back-to-school season will bring some reasons for optimism:

- Hot Topic reported a decrease of 5.8% in net sales to $59.5 Million, and a 7.9% decline in overall same-store sales compared to the prior period. Torrid same-store sales were -10.3% and Hot Topic same-store sales were -7.2% for the month. Internet sales were a bright spot for the company in June, as hotopic.com sales were up 31% and torrid.com sales increased 17% from a year ago. The company expects a high single-digit decline in same-store sales for the quarter, as July and August sales will be impacted by the back-to-school season falling a week later than last year. Hot Topic was a clear standout as the economy deteriorated during the fall, posting 7 consecutive months of same-store sales gains from October through April. However, their performance over the last 2 months, as well as their guidance for this quarter, indicates that they have succombed to weak consumer spending and lost business to rivals such as Aeropostale and The Buckle.

- Zumiez reported a decline of 7.9% in net sales to $32 Million, while same-store sales decreased 19.3% on top of a 3.4% decline in the year-ago period. They have now reported 10 consecutive months as well as 5 straight quarters of negative same-store sales results. The company said that all departments posted negative comps during the month, and the south and west were the worst-performing geographic regions. Weak comparable sales are expected to continue through July and August, hurt by labor day falling a week later than last year. However, this late back-to-school season should have a positive effect on September sales.

www.RetailSails.com

Aeropostale Opens First P.S. Store, Aiming At 'Tween' Market

By Andria Cheng: Wall Street Journal

A floor-length mirror with a built-in camera allows a shopper to take her own pictures and see them displayed instantly on screens. Text messages such as "You look GR8 :)" and "Luv U" are printed on the wall.

This is what's going on at P.S. from Aeropostale, the new store by New York-based teen retailer Aeropostale Inc. (ARO) targeting kids 7 to 12 - a demographic commonly referred to as the tweens, and younger than the namesake chain's 14- to 17-year-old core customers. The merchandise assortment of graphic T-shirts, jeans and dresses is similar to the concept's 900-store sister chain with some exceptions, such as school uniforms for the elementary-school crowd.

After 13 straight quarters of record profit growth and 11 consecutive years of rising sales at stores open at least a year, Aeropostale's stock has more than doubled this year, outpacing pricier rivals such as Abercrombie & Fitch Co. (ANF) and American Eagle Outfitters Inc. (AEO), as well as each member of the S&P Specialty Retail Index group. The new store, according to Chief Executive Julian Geiger, is a key part of Aeropostale's strategy to sustain its momentum.

"This is a real business with huge sales and profit potential," Geiger said in an interview at the P.S. store's opening at Palisades Center in West Nyack, N.Y. Aeropostale plans to open 10 P.S. stores this year with the goal to open more than 500, expanding its share in what he described as an underserved $14 billion market. "We are very confident we can grow this brand prudently but aggressively over the next decade."

Analysts said it's too early to gauge the store's growth potential, located near shops such as Tween Brands Inc.'s (TWB) Justice chain, Gap Inc.'s (GPS) GapKids.

"From the store environment they've hit it," said retail consultant Customer Growth Partners' Craig Johnson, who was among one of about 30 analysts at the company's opening. "It creates something fun for kids to stay in stores longer. It's mom-friendly. But I'm not convinced that this can go to 500 stores. The jury is still out."

Like other retailers such as No. 1 discounter Wal-Mart Stores Inc. (WMT), Aeropostale (known for its promotions such as two T-shirts for $20) has benefited from the economic downturn that made shoppers more budget-conscious, favoring stores perceived to have lower prices.

Geiger said the company's success isn't just recession-driven and far beyond a "value story." Over two years ago, he hired industry veteran and former Victoria's Secret (LTD) executive Mindy Meads as president and chief merchandising officer, who has cut the stock-keeping units by 30%. They've concentrated on better selling styles and revamping merchandise, including adding sparkles or sequins and new fonts to graphic T-shirts.

"We are moving away from the follower to being more relevant in a timely manner," Meads told MarketWatch. The new P.S. store carries 35 design finishes for graphic T-shirts, for example.

After lagging for more than two years, Aeropostale's profit margins started to outpace that of either American Eagle or Abercrombie & Fitch, with sales per square foot sharply accelerating since the third quarter, according to research firm Retail Metrics.

At the Palisades Center, while American Eagle and Abercrombie & Fitch each had either clearance or big sales signs, the Aeropostale chain didn't have any additional discounts on top of its regular promotions.

Not-So-Low Rise

To make sure the jeans are more acceptable for moms to buy for their 10-year olds, P.S. hiked their rise by about one inch
compared with the older Aeropostale chain, to make them less "risque," Meads said. She added it took 18 months of work to get ready to open, hosting events and focus groups, as well as finding out whether existing customers wouldn't be turned off with the company opening a sister chain. 

"The store looks really good and different relative to competition," said Standard & Poor's analyst Marie Driscoll. "It looks a little grown-up and more sophisticated. It's really what the younger kids want. They want to look like their older brother and sister."

The company also has been remodeling some of its namesake shops, adding full-body mannequins, replacing metal hangers with wooden hangers and stocking items such as spring scarves to be more on trends. Its design and merchandising team is constantly in airports, amusement parks and train stations, shopping competitors' stores and seeing fashions from Europe to make sure it's got what its teen customers want, Geiger said.

"There used to be a gap in pricing and in fashion" between Aeropostale and its competitors, pointed out analyst Eric Beder of Brean Murray Carret & Co. For instance, the retailer's prices are on average 20% to 30% below that of American Eagle, he said. "The fashion quotient has really improved."

Eleven-year old Annie Rogers from West Point, N.Y., has noticed the difference. With her mom and her sisters, ages 13 and 6, the family just came out of the Aeropostale store with bags of T-shirts, shorts, camisoles and flip-flops - spending a total of $130.

"Whenever we come, we see new clothes now," Rogers said, adding she wants to check out the P.S. store so she doesn't have to worry about scouting out the extra-small sizes at Aeropostale. "They have more styles. I like the clothes and how they look on me."

-By Andria Cheng, 415-439-6400; AskNewswires@dowjones.com

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Pacific Sunwear selects ex-Vans chief to be CEO

By Andrea Chang
Los Angeles Times

Gary H. Schoenfeld brings surf-and-skate experience to PacSun, which has been losing money.
Teen specialty retailer Pacific Sunwear of California Inc. named former Vans Inc. CEO Gary H. Schoenfeld to its chief executive post Wednesday.

Schoenfeld succeeds Sally Frame Kasaks, who has served as CEO of the Anaheim retailer since 2006 and as board chairwoman since 2007. Pacific Sunwear said Kasaks wasn't pushed out from the top job and would remain a director.

Schoenfeld, 46, will take over as chief executive June 29, the company said. He had a nine-year tenure at Vans, ending in 2004, and later became co-CEO and president of Global Brands Group.

In an interview, Schoenfeld said he hoped to make Pacific Sunwear "once again a favorite place to shop" by expanding the chain's brand mix, attracting new customers and promoting the surf-and-skate lifestyle. Although he said he was enthusiastic about the company's long-term prospects, he also noted its recent revenue problems and the challenging retail environment.

"The company has had declining sales trends and hasn't been profitable for some time, so we've got some work to do," he said.

Kasaks took the CEO job amid hopes that she would boost the retailer's sagging sales. During her tenure, she increased offerings for teen girls and closed the company's footwear division.

But the chain has been hammered by the recession in recent months as consumers cut spending.

In January, Pacific Sunwear announced widespread cost-cutting measures. Last month the company reported that sales at stores open at least a year fell 18% in the first quarter compared with a year earlier.

Mitch Kummetz, an analyst at Robert W. Baird & Co., said Schoenfeld's experience would help him lead Pacific Sunwear in a new direction.

"Gary's strength is understanding the action sports market and understanding the teen consumer," Kummetz said. "He's got a solid background."

Pacific Sunwear stock closed at $3.20, down 5 cents, before the management change was announced. In after-hours trading, the stock was little changed.

The company operated 927 stores in 50 states and Puerto Rico as of May 2.

andrea.chang@latimes.com

ORIGINALLY POSTED HERE

Best Buy to Host Panel Discussion, Unveil New Report on Teen Motivation, Encouragement

Report Findings to Address If, Why 15 Year-Olds are Succeeding

MINNEAPOLIS--(EON: Enhanced Online News)--Best Buy Co., Inc. (NYSE:BBY) will host a one-hour, in-person event Monday, June 8, 2009 at 2:00 p.m. CST, at its corporate campus in Richfield, MN, with a simultaneous Webcast on www.at15.com, to unveil a new research report on the state of 15 year-olds in the U.S. Developed in partnership with the Search Institute. Teen Voice 2009: The Untapped Strengths of 15-Year-Olds is based on a national study of 1,817 15-year-olds, which examines the factors that contribute to teens’ success, and addresses whether teens are experiencing these factors.

WHO:					Moderator: Gene Roehlkepartain, Vice President of Search Institute
					Panelists include: Three Minneapolis-area teenagers; Joe Cavanaugh, CEO and founder of Youth Frontiers; Professor Richard Lerner, Tufts University; and Professor Michael Rodriguez, University of Minnesota.
					Also available: Paula Prahl, Senior Vice President, Communications, Public Affairs and Corporate Responsibility, Best Buy; and Jeffrey Peterson, Director, Best Buy Children’s Foundation.
WHAT:					One-hour, live panel discussion event to unveil new research report, Teen Voice 2009: The Untapped Strengths of 15-Year-Olds, and response to questions from audiences in-person and online.
WHERE:					Live Panel: Best Buy Corporate Campus, 7601 Penn Avenue South, Richfield, MN
					Webcast: http://www.at15.com
WHEN:					2:00 p.m. (CST)
WHY:					Teen Voice 2009 was commissioned as part of @15, Best Buy’s new teen-led social change platform to give voice to the hopes, concerns and dreams that teens have for the their futures. This report explores the motivations, opportunities and relationships needed to set or keep 15-year-olds on a positive course at a critical time in their life and will inform and support Best Buy’s efforts to engage teens through @15.

GET THE FULL DETAILS AT