A handful of teen-targeted retailers are the only bright spots in retail other than the discounters.
Buckle bke, Hot Topic hott and Aéropostale ARO were the only specialty stores this week to report positive same-store sales again in March. Despite record drops in sales at once-favored Abercrombie & Fitch anf— which has refused to follow the trend toward deep discounting and saw a 33% sales drop in March — the three chains' sales continue to suggest some recession resistance in the teen market.
Even Wal-Mart wmt faltered a bit in its last quarter — with sales up just 1.4%, an increase that lagged analysts' expectations. Department stores each saw sales declines from March of last year. Easter fell in March last year rather than April, a fact that Wal-Mart and other down-trending retailers blamed.
Midwest-based Buckle, however, watched sales soar by 17.4%, the most of any chain reporting. Buckle sells low to midprice clothing lines, including Lucky Brand and Quiksilver.
Even though March sales were down 16%, American Eagle Outfitters aeo raised its guidance for its first-quarter earnings. Analysts say factors unique to teens and the stores they frequent are working in the retailers' favor.
Retail stock analyst Jennifer Black notes "cheap is the new cool." That's helped Aéropostale, which offers the same type of apparel found at American Eagle and Abercrombie & Fitch but at lower prices.
On top of that, "cool" is simply cool. "The peer pressure when you're in high school is just unbelievable," says Black. Young people, unlike their parents, will seldom stoop to shopping their closets.
Sometimes they simply can't, says Mary Brett Whitfield, senior vice president at the management consulting and research firm Retail Forward.
"Teens are still growing and might actually need new clothes," says Whitfield.
For Hot Topic, merchandise tied to the hugely popular Twilight movie and book franchise has lured more mainstream teens into the once mostly gothic stores.
Black says cutting back for Hot Topic customers, who she says spend an average of just $21 a visit, means focusing more on music and books, "an inexpensive way to have an outlet."
The stores' success offers lessons for retailers, says Whitfield: "It will take longer for retailers that don't have an established value proposition to improve — unless they have a unique or differentiated product."