MINNEAPOLIS (MCT)– While their parents may be fretting about losing their jobs or being able to retire at a decent age, the nation’s teenagers are sick of all this gloom and doom. For the first time in three years, they’re ready to shop.
Teens plan to spend 2 percent more on clothes, shoes and accessories than they did a year ago, and 6 percent more than they were thinking about just six months ago. That’s according to a nationwide survey of 11,000 students released this week by Minneapolis-based investment banking firm Piper Jaffray.
It’s the first time since the spring of 2006 that Piper’s twice-a-year survey has found teens in the mood to spend, giving retailers a ray of hope in what is expected to be another tough holiday season.
“We’re encouraged, because it’s a reversal of a relatively long-term trend,” said Piper Jaffray analyst Jeff Klinefelter, who directed the September survey of students and some of their parents. “The teenage demographic is seeing a need to reinvest modestly in their wardrobes.”
Part of that is to be expected. Teens outgrow their old duds and need new ones. But Klinefelter said the fashion world is delivering some new trends, too. Plaid tops are bringing in young shoppers who want a fresher look than the graphic T-shirts and hooded sweatshirts of recent fashion cycles, he said.
A report by RetailMetrics echoes Piper Jaffray’s findings, showing spending at the nation’s teen apparel stores is up 1.6 percentage points since September. That’s a bigger increase than general apparel retailers (up 1.1 percentage points), department stores (up 0.6) and discounters (up 0.3).
America’s 28 million teens spend about $70 billion a year on food, gas, electronics, movies and music, according to Klinefelter, giving them decent clout with retailers who covet their discretionary dollars.
Teens now sink about 42 percent of their budget into clothes and accessories, and another 7 percent into video games, according to the Piper survey. Both are increases from last year, probably because teens are spending less on cell phones and music players as the pace of innovation has slowed.
But this itch to buy is fairly new. As recently as this spring, teens surveyed by Piper Jaffray planned to cut back spending by 14 percent.
Heading into the holidays, parents say they’ll spend more on themselves and their kids compared with last year, when the global financial crisis struck. With 401(k)s rebounding and some positive recent signs in the housing market, parents may be feeling more confident about their financial futures. But they also may be kicking in because teens are having a tougher time finding work. Last year, about 51 percent of the 10,000 students who took Piper’s online survey had part-time jobs, compared to 39 percent today.
That might help explain why kids aren’t spending willy-nilly, even with a stepped-up contribution from their folks. A recent survey from retail analyst Eric Beder of Brean Murray Carret & Co. found sales are stronger at the clearance racks and with buy-one, get-one free offers, according to store workers at American Eagle, Urban Outfitters, Aeropostale and Abercrombie & Fitch.
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