MINNEAPOLIS, Apr 09, 2008 (BUSINESS WIRE) -- Total teen spending on fashion declined nearly 20 percent on a year-to-year basis, indicating a "discretionary recession," according to the 15th semi-annual "Taking Stock With Teens" research survey, recently published by Piper Jaffray. The national study was conducted by senior research analyst Jeff Klinefelter and a collaborative team of research analysts to determine purchasing behavior and brand preferences among teens. Through mall research field trips and classroom visits in 11 cities across the United States, the team surveyed nearly 700 students using in-class, online and in-store surveys this spring. Piper Jaffray also captured an additional 4,500 online survey responses through the national DECA organization, which partnered with the retail research team for the seventh time.

According to the survey results, total spending trends were weakest for young men with a 15 percent year-over-year decline versus an 11 percent year-over-year decline for juniors (young women). While the fashion category represents 41 percent of the total teen budget in the spring 2008 survey and teenagers continue to spend a significant amount of money in this category, the Piper Jaffray retail research team notes this budget allocation is low compared with the past several years.

"We're currently in the 'transition phase' of the fashion cycle and believe that we have not yet hit bottom," said Jeff Klinefelter, senior retail research analyst at Piper Jaffray. "The current economic challenges are impacting consumers at all income levels and ages, indicated by the historic low level of average planned spending in the fashion category this spring."

Key findings from the survey in the fashion, beauty and personal care, home furnishing, video game, digital media and restaurant categories also include the following:

-- The top five brands among all students in the school survey remain largely unchanged from last fall. Hollister remains the No. 1 preferred brand by teens, as ranked by mindshare, followed by West Coast Brands (e.g. Pacific Sunwear, Volcom, Quicksilver, Zumiez), American Eagle, Abercrombie & Fitch and Forever 21. Specifically among brands ranked by girls, Hollister maintained its "most preferred" position, while West Coast Brands continue to resonate as a favorite among young men.

-- A bright spot in consumer spending trends points to an increase in spending from the fall 2007 results among teen girls in the beauty category. Overall, spending by parents was down in both the apparel and beauty categories. In addition, privately-held, Swedish-based IKEA was the top choice among teens followed by Pottery Barn/PB Teen in the home furnishing retailer or cataloger category.

-- By gender, electronics represented 10 percent of total budget for young men and 4 percent for juniors this spring and 7 percent overall, up slightly from 6 percent last year. Spending in the video game system category increased significantly for young men to 13 percent from 9 percent last fall.

-- In the digital media category, 86 percent of the students who own an MP3 player indicated that they also own some form of an iPod, which is an increase from 82 percent last spring. Although iTunes continues to dominate market share at 81 percent, 61 percent of the students surveyed indicated they download music illegally, compared to 64 percent at this time last year. In addition, 6 percent of the students surveyed indicate they own an Apple iPhone, which is double the market share found in the fall 2007 survey; 9 percent expect to buy an iPhone in the next six months.

-- Starbucks continued to be the clear brand leader across the board in both the school and online survey. Premium coffee is potentially a growing category among teens as Dunkin's Donuts appeared in the top ten brands for the first time in the school survey. Chipotle and McDonald's remained in second and third places in the school survey, while Olive Garden and Applebee's remained in second and third in the online survey. However, Chipotle continues to gain teen market share, ranking among the top ten brands in the online survey for the first time. In total, approximately 45 percent of the students surveyed believe they have spent more money this year at restaurants than last year.

Piper Jaffray also polled more than 75 parents on the amount they spend either on themselves or their teens. Parents indicated that annual spending on teen apparel totaled $883 versus $1,487 in the spring 2007 survey, a 41 percent decline on a year-over-year basis. In addition, the survey results show parents' annual spending on their apparel was down 24 percent from last year, totaling $952 versus $1,249 last spring.

About Piper Jaffray

Piper Jaffray Companies 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. With headquarters in Minneapolis, Piper Jaffray has 25 offices across the United States and international locations in London, Hong Kong, and Shanghai. Piper Jaffray & Co. is the firm's principal operating subsidiary. (NYSE: PJC) (http://www.piperjaffray.com)

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SOURCE: Piper Jaffray

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