Teen Retailers Go Younger

Jul 20, 2010
Tom Ryan

By Tom Ryan

American Eagle Outfitters last week opened "77kids," a
new concept targeting apparel for children and babies. According to an article
in The Wall
Street Journal
, several teen chains are shifting resources to concepts targeting
kids after finding little luck opening ones targeting adults.

P.S. from Aeropostale,
which targets seven to 12 year-old kids and opened last year, was exceeding
expectations in the first quarter. The company now has 31 P.S. from Aeropostale
stores in 12 states. Last year, it closed Jimmy’Z, a California lifestyle-oriented
chain targeting the 18-to-25 year-old crowd.

Abercrombie & Fitch in January
closed up the last of its Ruehl stores, which had been aimed at men and women
aged 22 to 35. It has been slowly expanding its abercrombie kids concept since
launching it in 1997. Aiming at kids between seven and 16, the retailer
now has 202 abercrombie kids locations. In June, comps at abercrombie kids
were up 14 percent.

Meanwhile, Gap Inc. is said to be in the midst of expanding its
kids and baby lines. It opened GapKids in 1986 and babyGap in 1989.

Eagle itself first tried expanding its base by targeting older customers
with the Martin + Osa brand, which proved unsuccessful and is now winding down.
77kids, which takes its name from the year American Eagle was founded, started
out a year-and-a-half ago as an online offering.

"There are natural synergies," Betsy Schumacher, chief merchandising
officer for American Eagle’s 77kids unit, told the Journal. "We
like to be able to have a customer start with us at birth and stay right through

77kids will feature apparel similar to American Eagle’s own preppy
look, with plenty of denim, fleece and graphic T-shirts.

Dorothy Lakner, retail
analyst at Caris & Co., told the Journal that
she sees potential in the 77kids concept. Said Ms. Lakner, "The stores
are very funky and colorful, and we’ve just been through something of a baby
boom. As the kids grow, you have no choice but to buy clothes for them, even
in a recession, even if parents don’t buy clothing for themselves."

Discussion Questions: Why are teen stores apparently finding more success
with kids concepts over adult concepts? What are the distinct challenges
and benefits of operating pre-teen businesses?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

9 Comments on "Teen Retailers Go Younger"

Sort by:   newest | oldest | most voted
Paula Rosenblum
10 years 9 months ago

The good news about kids is they keep growing, so they keep needing new clothes. Nothing bad about nurturing brand loyalty from an early age. Not all kids are going to accept their clothes to be from Walmart.

I can remember when my sister’s kids were young. They all wore Gap Kids. It was an all-Gap family. That’s what these guys are striving for, and it’s a good idea.

Bill Robinson
Bill Robinson
10 years 9 months ago
If teen apparel retailers want to follow their customers into early adulthood, they need to do a lot of testing and a lot of market basket analysis. Their customer loyalty program should enable them to segment transactions to the customer in the upper range of their age demographics. What do the baskets look like? Favorite price points? Coordinated purchases? Where do accessories begin to fall off? How about frequency of visits? This learning will strongly suggest where assortments need to change to appeal to the customer aging out of the target demographics. The next step is to test out broadened or extended assortment in the field. Does the target customer linger? What impact does it have on core business? Finally, as the new concept store opens, it is vital to make offers to the target customer. So many retailers don’t want to do this in fear of losing business in the core concept. It is apparent that most retailers lack the analytical and testing tools to pull this off. So they rush to market with… Read more »
Gene Hoffman
Gene Hoffman
10 years 9 months ago

What kid wants to be guided or dressed by adult concepts? The answer: No one. Pre-teens and teens want new and different things that are constantly in tune with “their” times. That projects a large market. So go for it, teen chains.

Bill Emerson
Bill Emerson
10 years 9 months ago

Moving younger makes a lot more sense than moving older for teen apparel retailers. As teenagers grow into their adult years, they are choosing clothes for themselves and, more importantly, paying for these clothes themselves. Instead of school, they are working. Their aspirations and self-image changes quickly and substantially. All of this makes for a very different design sensibility and effectively creates a completely different company. Moving younger is far more consistent with the operating model and brand DNA of teen apparel.

The only disadvantage of going younger is that success is completely bounded by demographics. Kids grow out of kids’ sizes. This doesn’t happen as dramatically in the older market.

Bill Hanifin
10 years 9 months ago

The brand awareness is first created with the adult parents of the kids in the targeted age group (7-12 or so). Most parents would choose to dress their children in something fun and fashionable rather than utilitarian, prices being in the same range.

Once engaged with the brand (i.e. clothes on back of the child), the awareness transfers to the child and (hopefully) they build preference for the brand as one commenter noted about Gap.

As long as value is not overlooked in the equation, these concepts should do well. I’m less confident should one of these brands strive to exact price premium for this age group.

Ed Rosenbaum
10 years 9 months ago

Of course retailers are going to target teens and younger as their audience. Why not? Teens are going to become adults so now is the time to attract them to your brand. Start them buying now and it will continue when they become parents taking their children shopping.

This will be far more successful a venture than targeting the parents now. Parents have the buying habits they are comfortable with already ingrained. The same will happen with today’s teens. Isn’t it amazing how marketing has changed in such a short time?

Dan Berthiaume
Dan Berthiaume
10 years 9 months ago

Tweens/teens are extremely fad conscious and will shell out money (their own or parents’) to keep up with trends even if they have a closet full of recently purchased clothing. While some adults are like this, usually at a certain point adults start getting more utilitarian about their clothing and favor classic styles that do not quickly go “out.” Which demographic offers apparel retailers more potential for frequent repeat sales?

Doug Stephens
Doug Stephens
10 years 9 months ago

I agree with many of the comments my colleagues are making regarding the life-time value and loyalty of the early teen customer. It makes sense to connect early with a customer you may have for life.

I also believe that parents are often the ones making material sacrifices in order to continue to buy brand-name goods for their kids. Parents will move to buying store brands or simply buying less in order to maintain the image and style of their children.

Cathy Briant
Cathy Briant
10 years 9 months ago

I have a teen and a toddler (yes, go ahead and smile; it’s been interesting) and my personal observation is that it is indeed easier for a teen brand to skew younger than to venture into adult territory.

As many people said, parents still have control (if not necessarily influence) over teen purchases, so the parent driving to a teen store will be comfortable taking the younger ones to a children’s store of the same banner.

Then there are the demographics themselves. Young kids like to emulate their teen counterparts, so a children’s line is likely to parallel the success of the teen line (as long as it’s revised for age appropriateness, of course). A young adult, however, is more likely to want to distance themselves from their younger, more awkward selves, so a clean start with a new banner helps them make that break.

I won’t even talk about adults wanting to dress like teens, however, as that is an entirely different topic!


Take Our Instant Poll

What do you think of the growth potential in kids concepts for traditional teen chains?

View Results

Loading ... Loading ...