Latest from Aeropostale–shiny, happy, people.

Whether economic forecasters want to admit it or not, clearly many of the big-chain retailers in youth culture industries are feeling the effects of a second recession. And yes, another jailbait photo problem has surfaced.

First, Aeropostale reported yesterday, August 18th that their second quarter net sales were down 5% to $468.2 million from $494.7 million a year ago. Same store sales dropped a whopping 14% compared to a same store sales increase of 4% last year. Year to date net sales decreased 2% to $937.4 million, from $958.3 million in the year ago period.

The bright light for the teen retailer is that their Ecommerce business for the second quarter increased 20% to $25.1 million from $20.9 million a year ago, indicating as we’ve noted in our Summer Youth Culture Study 2011 -Back-to-School that online retail shopping is clearly an important strategy for all brands these days.

So what’s the word for their third quarter forecasts? Gloomy. Thomas P. Johnson, Chief Executive Officer, commented, “Our outlook for the third quarter reflects challenging sales and margin trends, as well as an uncertain macroeconomic environment. While we are very disappointed with our current performance, we are working diligently to integrate the right balance of fashion into our assortment. Additionally, we will find new ways to connect with our customer, and amplify our fashion message. I am very confident that the strategies we have in place and the tenacity of our organization will position us for future growth and success.”

The Gap
Meanwhile, for the Gap, their second quarter net income decreased 19% to $189 million compared with $234 million last year.

According to Glenn Murphy, Chairman and CEO of Gap Inc. “Despite a difficult quarter, we still delivered a net sales improvement and I continue to believe we have far greater opportunities than challenges ahead of us.”

The Gap also opened their 300th re-designed Old Navy store, announced plans to expand their Athleta stores in NY, LA, and DC; opened its first flagship in Rome; third Gap in Shanghai; and new franchises in Egypt and Ukraine. Much of their growth strategy is relying on international expansion.

Interestingly, they are also working on a masstige collaboration with Diane von Furstenberg for Spring 2012. Also, Banana Republic will be launching a “Mad Men” inspired series next year.

The latest controversial image…ends up on a DIY T-shirt.

Jailbait Issue
Urban Outfitters, like American Apparel and Abercrombie & Fitch, and so many others at various times throughout certain campaigns, are now in hot water for the usage of an image of a 15-year-old model by the models’ parents who did not give permission for the photo for $28 million.

The photo shows model Hailey Clauson posing in one of their T-shirts, but legs open and exposing part of her crotch. The lawsuit includes the photographer, Jason Lee Perry, who claims the pictures were stolen from him and appeared on blogs before appearing on the T-shirt.

The ongoing debate of using underage models in ads and various poses continues to draw the ire of some and get-over-it attitude of others. The probably with today’s technology is that images can easily get released online, picked up on blogs, Tumblr, and Flickr accounts, and made into DIY T-shirts. The question is of course, is this the problem of the retailer or the model’s agent? The debate continues.