NEW YORK — Half-priced jeans and promotional freebies are already popping up at the mall with the start of many schools still weeks away.
Teen-clothing sellers may have had some misplaced optimism about the strength of the economic recovery when orders were placed in the spring, and department stores are armed with hip jeans and fast fashion of their own. The battle for back-to-school dollars is giving parents more affordable choices.
Aeropostale Inc. just started marking down all new jeans by 50 percent. They’re 40 percent off at Abercrombie & Fitch Co. Other sales gimmicks include free cellphones and a chance to audition for a movie.
The economy has hit some speed bumps, and that has some industry experts wondering if teen merchants will be able to get rid of the piles of jeans and flashy T-shirts they bought, expecting a stronger consumer rebound.
Stubbornly high unemployment, especially bad among teens, has shoppers keeping a lid on spending and spurring bargain-hunting in a teen back- to-school clothing market worth $11 billion, according to market research firm NPD Group Inc.
Consumers have been shopping increasingly later for back-to-school needs, with the bulk of the buying in August and September. That’s why stores are trying to grab shoppers now with big discounts, though they could take a hit on profits if the discounting goes too far.
Often, that’s what it takes to get parents to spend.
“If my kids really want something that’s not on sale, I make them use their own money,” said Lori Ahrenhoerster, 40, of Whitefish Bay, Wis., the mother of two daughters, ages 7 and 15, and a 12-year-old son.
With Americans spending more of their limited discretionary dollars away from clothing and more toward gadgets like flat-panel TVs and Apple Inc.’s iPads, the fight to get shoppers to spend for back-to-school fashions will be intense for all clothing merchants.
But for teen chains in shopping malls, it’s been a slower climb out of the recession’s sales funk than for their bigger rivals.
More-expensive merchants such as A&F had to cut prices to cater to thriftier shoppers.
J.C. Penney Co. and Macy’s Inc. are muscling in on their turf as well, taking a page from white-hot fast-fashion chains such as Forever 21 by quickly changing assortments of exclusive, affordable fashions.
Complicating everything is teen-clothing specialists were much more optimistic than rivals when they placed orders earlier in the year when the economy looked stronger, said Eric Beder, retail analyst at Brean Murray, Carret & Co.
Fashioning a plan
RECESSION HANGOVER:The slump for the teen chains, which had routinely posted strong sales gains for a decade, began in 2008 with the recession. Teen unemployment has since risen steadily and is now at 26 percent. The recession also meant teens couldn’t rely on their parents to buy extras and pushed the teen chains to double-digit sales declines.
SINGING THE BLUES: Teen-fashion chains will likely have the biggest challenge grabbing shoppers this fall amid stiffer competition from department stores, discounters and hot chains like Forever 21.
THE UPSHOT: The competition could mean better deals for parents and teens who want skinny jeans or flashy T-shirts.
WHAT’S AT STAKE: The back-to-school season is the retail industry’s second-biggest, after Christmas. For teen merchants, it accounts for 25 percent of annual revenue, though for other merchants it’s about 10 percent, according to Kurt Salmon Associates.
