Semi-Annual Piper Jaffray ‘Taking Stock with Teens’ Survey Sees Low Single Digit Increase in Fashion Spending

MINNEAPOLIS--(BUSINESS WIRE)--Oct. 7, 2009-- Total teen spending on fashion related items increased by two percent on a year-over-year basis and six percent sequentially, a notable improvement from the mid-teens decline measured in the prior season according to the Fall 2009 “Taking Stock With Teens” survey published by Piper Jaffray. The 18^th 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 12 cities across the United States, surveying approximately 1,200 students with an average age of 16.3 years. In partnership with DECA (an international association of high school students), Piper Jaffray captured online survey responses from an additional 10,000 students with an average age of 16.2 years.

The survey results indicate that spending in the junior apparel category has increased seven percent, but decreased one percent for footwear and 10 percent for accessories. Spending by young men on apparel has increased one percent while spending on footwear increased seven percent.

“We believe the fashion industry is in the early stages of a new cycle with traffic and conversion gradually improving as teenage consumers look to replenish key items in their wardrobes after under-spending on the category over the past three years,” said Jeff Klinefelter, senior research analyst. In addition to year-over-year and sequential increases in fashion budgets, the survey found other spending trends such as shopping frequency improved versus spring and fall of 2008.

Other key findings from the survey in the fashion, beauty and personal care, video game, digital media and restaurant categories include the following:

• West Coast Brands (e.g. Pacific Sunwear, Volcom, Quicksilver, Zumiez) took the No. 1 spot in clothing brand preferences among teens, followed by Forever 21, Hollister, Nike, and American Eagle. Specifically among brands ranked by young women, Forever 21 took the "most preferred" position, while West Coast Brands continued to remain a favorite among young men.
• Beauty spending is down from last year for teens but parents indicate an 11 percent year-over-year increase in spending on the category. When purchasing cosmetics, department stores are preferred whereas discounters are favored when shopping for skin care items.
• Survey results indicate video game spending is seven percent of teen budgets, which is up from three percent five years ago. The results also reveal 88 percent of teens own at least one video game console, while 58 percent own two consoles. Approximately 78 percent of teens own or intend to own a next generation console. GameStop remains the retail destination of choice with a 38 percent share, as teens utilize the company’s trade-in model.
• In digital music, 87 percent of students who own an MP3 player indicated that they own an iPod – up from 86 percent last spring. iTunes share was 97 percent, consistent with a prior season. In addition, 15 percent of students indicate they own an Apple iPhone while 22 percent of students expect to buy an iPhone in the next 6 months.
• In the restaurant category, Starbucks has once again secured the No 1. spot and is preferred by teens in both the school and online surveys. For the first time since the fall of 2007, teens indicate an increase in restaurant spending. Taste is the leading influence dictating where teens dine but value continues to be a critical factor in a challenging consumer environment.

Piper Jaffray also surveyed parents, and the results indicate that spending on themselves and their teen increased sequentially and year-over-year. Apparel spending by parents for their teens was $1,141 compared to spring 2009 at $915 and fall 2008 at $1,085. Parents indicated that annual spending on their own apparel increased 66 percent sequentially and 33 percent year-over-year, shifting toward specialty and value retailing. When shopping for themselves, parents cite Macy’s, Kohl’s, and Nordstrom as preferred. When shopping for their teen, parents picked American Eagle Outfitters, Kohl’s, Nordstrom, and Hollister.

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

Piper Jaffray
Terry Sandven
AnalystMediaRelations@pjc.com