The three mall brands generally held responsible for the preppy, tight-fitting, logo-tee'd uniformity plaguing teens over the past decade might finally be losing their appeal.
For me, throughout middle school and most of high school, you pretty much didn't fit in if you weren't wearing something from Abercrombie & Fitch or American Eagle. The same seemed to be true all over the country, with Aeropostale cornering the East Coast market.
However, according to a report in Reuters, the "three A's" as they've been called aren't doing so hot anymore. American Eagle reported its lowest shares in a year and a half and its gross margin fell 3.6 percentage points; Aeropostale's comparable sales fell 15 percent last quarter; and profit estimates for Abercrombie are low as well.
According to analysts, they're simply falling out of style. "The teen retailers seem to be not in style or in vogue at this point in time for their target consumers," said Bryan Keane, portfolio manager of the Alpine Global Consumer Growth Fund. "That usually does not turn around quickly."
Especially when teens now have so many alternatives, with rapidly expanding fast fashion chains like Forever 21, H&M, and Zara competing for their (or, more likely, their parents') limited disposable income. Fast fashion retailers were once only available in big cities, but they're popping up in more malls every week. H&M even has e-commerce now. They're also quicker to pick up new trends, have a faster inventory turnaround, and are often more affordable than the "three A's." If my mall had an H&M or a Zara when I was younger, I wouldn't have so much as glanced at those overpriced, smelly, loud, and very, very white purveyors of prep.
It's unlikely that the competition is going to get any less stiff. Even Gap is doing better again. And Uniqlo, with its ambitious U.S. expansion plans and innovative fabrics, will also likely begin eating away at the "three As'" market share.
Reuters also points to statistics saying teens are now more likely to spend their money on electronics than clothes. It's not something I can relate to, but, hey, these are kids who were born after the Internet.