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photo: PITTSBURGH POST-GAZETTE/LANDOV (RETAIL WINDOW) OVERVIEW: Teen clothing retailers, searching for growth opportunities, are The baby-to-young-teen market is roughly $34 billion, a significant slice Children’s clothing tends to be a resilient category; parents buy clothing for
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Teen Stores Aim Younger
By KAREN TALLEY Teen clothing retailers, running out of fruitful locations to open their traditional stores, have been trying to increase sales by expanding their customer base. But reaching up into the adult market has proved challenging. So now they’re aiming younger, moving more forcefully into the growing business of clothes for children and toddlers. This summer, American Eagle Outfitters opened a store in a Pittsburgh mall with clothes for children and babies, a move that will expand its “77kids” product line beyond its limited website. American Eagle’s move mirrors fellow teen retailer Aeropostale, which found more success expanding last year to a younger demographic after failing with Jimmy’Z, its experiment in adult apparel. Aeropostale says its kids’ shops—called P.S. from Aeropostale and aimed at kids 7 to 12—are exceeding expectations. Gap is also in the midst of expanding its kids’ and baby lines, while Abercrombie & Fitch has closed up all of its Ruehl stores, which had been aimed at men and women aged 22 to 35. KIDS GROW SO FAST The baby-to-young-teen market is roughly $34 billion, a significant slice of the overall apparel market, which has $190 billion in annual sales, according to NPD Group. Children’s apparel tends to be more resilient than other categories in tough economic times. As they grow, kids need a steady supply of new clothing, so parents have little option but to keeping buying, even if they have to forgo new outfits for themselves. And retailers see a chance to connect parents and kids to a particular brand early. “There are natural synergies,” says Betsy Schumacher, chief merchandising officer for 77kids. “We like to be able to have a customer start with us at birth and stay right through college.” American Eagle could use the boost. Its sales have been struggling in recent quarters, and discounts have been eroding its profit margins. Its results have also been hurt by the costs of shutting down its Martin + Osa chain, which catered to adults. 77kids, which takes its name from the year American Eagle was founded, started out a year-and-a-half ago as an online offering, with American Eagle preferring to go slow with its new line. This year, it opened five 77kids stores in malls that already have American Eagle stores. Another three will open by the end of this year. Ms. Schumacher said the decision to proceed with new stores was based on the successful reception the line received over the Web. The website also served as a way to experiment so that the stores will have merchandise that customers want, Ms. Schumacher said. “We got to see what styles were popular,” she said. ‘BABY BOOM’ 77kids features clothing for infants on up to preteens, designed along the lines of American Eagle’s own look, featuring plenty of denim, fleece and graphic T-shirts. In contrast to Aeropostale’s focus on age 7 through 12, American Eagle is targeting all kids, including newborns, toddlers and preschoolers as well as elementary- Dorothy Lakner, a retailing expert, gives a nod to the endeavor. “The stores are very funky and colorful, and we’ve just been through something of a baby boom,” she says. “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.” But competition in the segment is increasing. Gap and its “Gap Kids and Baby Gap continue to be a priority and a Ms. Callagy says that parents feel an obligation to spend to keep their children well-dressed. Clothes are bought as kids grow out of old apparel, for different seasons and special occasions, she says, and parents also want their children to look good in their own eyes and those of people they meet. “There is a real emotional component,” she says.
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