Challenging Economy and Low Consumer Confidence Lead to 14 Percent Drop in Teen Spending
MINNEAPOLIS, Apr 08, 2009 (BUSINESS WIRE) -- A challenging economy and low consumer confidence has led to a dramatic 14 percent decline in fashion spending, according to the "Taking Stock With Teens" survey published by Piper Jaffray. The 17th semi-annual survey is a national study, which is conducted by senior retail research analyst Jeff Klinefelter and a collaborative team of research analysts, aiming to determine purchasing behavior and brand preferences among teens. This spring, the team visited nine cities across the United States, surveying approximately 600 students with an average age of 16.3 years. In partnership with DECA, Piper Jaffray captured online survey responses from an additional 7,500 students with an average age of 16.7 years.
The survey results indicate that spending in the junior apparel category has decreased 19 percent, but increased 9 percent for footwear and 8-percent for accessories. Footwear posted the strongest year-over-year and sequential results at a 4 percent and 21 percent gain respectively - an indication that the strong footwear cycle, particularly relative to the weakness in apparel, continues for the youth demographic.
"After the drop in teen spending stabilized last fall, it is apparent that the continued challenges in the economy are having a dramatic impact on teen spending this spring and the 14 percent decrease is a direct reflection of this," said senior research analyst Jeff Klinefelter. "The decrease in spending leads us to believe that the economy is forcing parents and teens to cut back on spending across the board. Teens and their parents are still buying new clothes, footwear and accessories, but are more selective and increasingly price conscious. This will force retailers to discount prices and offer unique promotions to keep a steady flow of spending until the economy improves."
Other key findings from the survey in the fashion, beauty and personal care, video game, digital media and restaurant categories include the following:
Piper Jaffray also surveyed parents and the results indicate that spending on themselves and their teen decreased sequentially yet spring 2009 levels appear to be stabilizing and slightly ahead of last year. Apparel spending by parents for their teens was $915 compared to fall 2008 at $1,085 but this level is above the $883 average in spring 2008. Parents indicated that annual spending on their own apparel declined 20 percent sequentially and 6 percent year-over-year and with a shift toward discount and value retailing. When shopping for themselves, parents cite Nordstrom and Kohl's as preferred. When shopping for their teen, parents picked Hollister, Nordstrom, and West Coast Brands.
About Piper Jaffray
Piper Jaffray Companies (NYSE: PJC) is a leading, international middle market investment bank and institutional securities firm, serving the needs of middle market corporations, private equity groups, public entities, nonprofit clients and institutional investors. Founded in 1895, Piper Jaffray provides a comprehensive set of products and services, including equity and debt capital markets products; public finance services; mergers and acquisitions advisory services; high-yield and structured products; institutional equity and fixed-income sales and trading; and equity and high-yield research. Piper Jaffray headquarters are located in Minneapolis, Minnesota, with offices across the U.S. and in London, Hong Kong and Shanghai. Piper Jaffray & Co. is the firm's principal operating subsidiary. (www.piperjaffray.com)
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SOURCE: Piper Jaffray
Rob Litt, 612-303-8266