PJC Piper Jaffray Companies

Piper Jaffray Completes Eighth Bi-Annual 'Taking Stock With Teens' National Study of Generation Y Shopping Behavior and Brand Preferences MINNEAPOLIS, Oct. 7 /PRNewswire-FirstCall/ -- Piper Jaffray & Co. Senior Retail Analyst Jeff Klinefelter and a collaborative team of other senior research analysts recently released the results of the eighth bi-annual proprietary research survey on teen spending habits and retail brand perception, titled "Taking Stock With Teens." Klinefelter and team conducted mall research field trips with approximately 600 teens from nine high schools in eight states across the country. Overall, the survey shows that total fashion spending continues to increase on strong gains last year. "Total fashion spending remains on par with a strong performance during the fall 2003 survey," said Klinefelter. "In addition, spending by female students increased driven by apparel and accessories and spending by male students also increased driven by footwear." Brand Preferences Survey Results: Klinefelter and team surveyed teens on their favorite places to shop as well as their spending habits. Based on their responses, Abercrombie & Fitch (ANF, Market Perform, $32.20, #) remains the most frequent overall destination for the seventh survey in a row, grabbing 13 percent of the total votes. In second place is Pacific Sunwear of California (PSUN, Outperform, $21.37, #=) with 11 percent of mindshare votes and in third is Abercrombie's Hollister concept with nine percent. In addition, American Eagle Outfitters (AEOS, Outperform $37.42, #) ranked fourth this spring and Pacific Sunwear's d.e.m.o concept was fifth. Pacific Sunwear and d.e.m.o combined for 15 percent of mindshare, which is up from 11 percent last spring. "Mindshare in terms of preferred brands seems to be merging at the top again, after this spring's relatively democratic dispersion of votes across a wider variety of retailers," said Klinefelter. "In the spring the three top choices garnered 25 percent mindshare among students surveyed, while this fall the top three choices took 33 percent of all votes." The students were also surveyed on video game products and other consumer electronics. Results of the survey point out that 81 percent of student households have at least one video game platform and 54 percent of students are occasional game players (playing at least monthly). In addition, 69 percent of student households own Sony's PS2, 36 percent own Microsoft's Xbox, 19 percent own Nintendo's GameCube and 47 percent own a GameBoy System (38 percent own two consoles). In addition to video game products, the students were surveyed about Apple's (AAPL, Outperform, $40.64, #) iPod product. Of the students surveyed, 16 percent currently own an iPod and 24 percent plan to buy an iPod within the next year. Looking at portable digital audio players overall, 32 percent of students are looking to purchase a portable digital audio player within 12 months and of those 32 percent, 75 percent expect that they will buy an iPod, versus an alternative player (Rio, Sony, etc.). Gen Y - Teen and Parent Spending Increases Total spending on fashion products (apparel, shoes and accessories) decreased modestly by 2.5 percent to $1,699 per student annually on a year- over-year basis, as compared to $1,742 during the fall 2003. Spending however, is up a strong 17 percent from the spring 2004 survey and is the second highest fashion spending indication since the inception of the survey in spring 2001. In addition, spending on fashion products by female students increased 15 percent as compared to the fall 2003 survey. The male students increased spending 17 percent year-over-year on fashion products. In addition to surveying students on their spending, Klinefelter and team also polled their parents. Parents have tightened their spending on apparel for themselves and their children over the past year and six-month periods. Parents decreased the amount of money they spend on apparel for their teens by 15 percent, versus fall 2003 and 23 percent, versus spring 2004. They also decreased the dollars spent on themselves nine percent, versus fall 2003 and by 24 percent, versus spring 2004. Piper Jaffray & Co. is the chief operating subsidiary of Piper Jaffray Companies (NYSE:PJC), a focused securities firm dedicated to delivering superior financial advice, investment products and transaction execution within selected sectors of the financial services marketplace. The company operates through two primary revenue-generating segments: Capital Markets and Private Client Services. Investment Research, an independent group reporting to the CEO, supports clients of both segments. Piper Jaffray & Co. has served corporations, government and non-profit entities, institutional investors and the financial advisory needs of private individuals since 1895. Headquartered in Minneapolis, Piper Jaffray has approximately 3,000 employees in 111 offices in 23 states across the country and in London. For more information about Piper Jaffray, visit us online at < http://www.piperjaffray.com/ >. Since 1895. Member SIPC and NYSE. Research Disclosures Piper Jaffray & Co. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decisions. This report should be read in conjunction with important disclosure information at the following site: http://www.piperjaffray.com/researchdisclosures . Customers of Piper Jaffray in the United States can receive independent, third-party research on the company or companies covered in this report, at no cost to them, where such research is available. Customers can access this independent research by visiting piperjaffray.com or can call 800 747-5128 to request a copy of this research. Research Disclosures The following disclosures apply to securities mentioned in this report if and as indicated: (#) Piper Jaffray was making a market in the Company's securities at the time this research report was published. Piper Jaffray will buy and sell the Company's securities on a principal basis. (^) A Piper Jaffray analyst who follows this Company or a member of the analyst's household has a financial interest (a long equity position) in the Company's securities. 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