Teen Spending Survey Points To Early Stages Of A Discretionary Recovery and Fashion Replenishment Cycle
October 07 2009 - 9:31AM
Business Wire
Total teen spending on fashion related items increased by two
percent on a year-over-year basis and six percent sequentially, a
notable improvement from the mid-teens decline measured in the
prior season according to the Fall 2009 “Taking Stock With Teens”
survey published by Piper Jaffray. The 18th semi-annual survey is a
national study, which is conducted by senior retail research
analyst Jeff Klinefelter and a collaborative team of research
analysts, aiming to determine purchasing behavior and brand
preferences among teens. This spring, the team visited 12 cities
across the United States, surveying approximately 1,200 students
with an average age of 16.3 years. In partnership with DECA (an
international association of high school students), Piper Jaffray
captured online survey responses from an additional 10,000 students
with an average age of 16.2 years.
The survey results indicate that spending in the junior apparel
category has increased seven percent, but decreased one percent for
footwear and 10 percent for accessories. Spending by young men on
apparel has increased one percent while spending on footwear
increased seven percent.
“We believe the fashion industry is in the early stages of a new
cycle with traffic and conversion gradually improving as teenage
consumers look to replenish key items in their wardrobes after
under-spending on the category over the past three years,” said
Jeff Klinefelter, senior research analyst. In addition to
year-over-year and sequential increases in fashion budgets, the
survey found other spending trends such as shopping frequency
improved versus spring and fall of 2008.
Other key findings from the survey in the fashion, beauty and
personal care, video game, digital media and restaurant categories
include the following:
- West Coast Brands (e.g. Pacific
Sunwear, Volcom, Quicksilver, Zumiez) took the No. 1 spot in
clothing brand preferences among teens, followed by Forever 21,
Hollister, Nike, and American Eagle. Specifically among brands
ranked by young women, Forever 21 took the "most preferred"
position, while West Coast Brands continued to remain a favorite
among young men.
- Beauty spending is down from
last year for teens but parents indicate an 11 percent
year-over-year increase in spending on the category. When
purchasing cosmetics, department stores are preferred whereas
discounters are favored when shopping for skin care items.
- Survey results indicate video
game spending is seven percent of teen budgets, which is up from
three percent five years ago. The results also reveal 88 percent of
teens own at least one video game console, while 58 percent own two
consoles. Approximately 78 percent of teens own or intend to own a
next generation console. GameStop remains the retail destination of
choice with a 38 percent share, as teens utilize the company’s
trade-in model.
- In digital music, 87 percent of
students who own an MP3 player indicated that they own an iPod – up
from 86 percent last spring. iTunes share was 97 percent,
consistent with a prior season. In addition, 15 percent of students
indicate they own an Apple iPhone while 22 percent of students
expect to buy an iPhone in the next 6 months.
- In the restaurant category,
Starbucks has once again secured the No 1. spot and is preferred by
teens in both the school and online surveys. For the first time
since the fall of 2007, teens indicate an increase in restaurant
spending. Taste is the leading influence dictating where teens dine
but value continues to be a critical factor in a challenging
consumer environment.
Piper Jaffray also surveyed parents, and the results indicate
that spending on themselves and their teen increased sequentially
and year-over-year. Apparel spending by parents for their teens was
$1,141 compared to spring 2009 at $915 and fall 2008 at $1,085.
Parents indicated that annual spending on their own apparel
increased 66 percent sequentially and 33 percent year-over-year,
shifting toward specialty and value retailing. When shopping for
themselves, parents cite Macy’s, Kohl’s, and Nordstrom as
preferred. When shopping for their teen, parents picked American
Eagle Outfitters, Kohl’s, Nordstrom, and Hollister.
About Piper Jaffray
Piper Jaffray Companies (NYSE: PJC) is a leading, international
middle market investment bank and institutional securities firm,
serving the needs of middle market corporations, private equity
groups, public entities, nonprofit clients and institutional
investors. Founded in 1895, Piper Jaffray provides a comprehensive
set of products and services, including equity and debt capital
markets products; public finance services; mergers and acquisitions
advisory services; high-yield and structured products;
institutional equity and fixed-income sales and trading; and equity
and high-yield research. Piper Jaffray headquarters are located in
Minneapolis, Minnesota, with offices across the U.S. and in London,
Hong Kong and Shanghai. Piper Jaffray & Co. is the firm's
principal operating subsidiary. (www.piperjaffray.com)
Since 1895. Member SIPC and FINRA.
© 2009 Piper Jaffray & Co., 800 Nicollet Mall, Suite 800,
Minneapolis, Minnesota 55402-7020
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