The shining light in the rather gloomy retailing landscape when it comes to youth culture markets is that Japanese fast-fashion chain Uniqlo announced a 19.2% increase for April 2009 in existing same-store sales in Japan. While we’ve noted previously that Uniqlo, owned by FastRetailing, Inc. has been one a chain to watch in terms of capturing an on-going new consumer base, this increase marks it as an incredible success.
Uniqlo attributed their April success to their aggressive new marketing approach and warm weather in Japan which has helped to boost their trendy summer collections. In addition, their opening of a new store in Singapore April 9th featuring their UT collection and denim, plus an additional 200 pieces specific for the Singapore market, well extremely well. Uniqlo plans to open another store in Singapore in August as part of their ongoing campaign to enter the Southeast Asian market.
Hot Topic Shares Fall
Weaker than expected same-store sales for April 2009 reported by Hot Topic May 7th resulted in a 20.7% fall from $13.87 to $9.81 a share. Despite same-store sales actually increasing 3.1% in April, this is less than half the 7% that was predicted by Hot Topic for their retail chain.
While financial analysts keep trying to pin the license of “Twilight” merch as one reason why Hot Topic has been able to ride out hard times, the main reason, as indicated by our North American Youth Culture Studies and consumer data is that many young people like the punk, Goth, and music-inspired brands, accessories and merch that Hot Topic carries. Interestingly however, the “Twilight” merch, while considered to be a hot topic, didn’t fly off the shelves as fast as anticipated, indicating the while the teen-Goth movie and book series is a sensation among youth culture, it’s the general Hot Topic apparel, accessories, and band merch that continue to do the best for the retailer.
Other interesting aspects for Hot Topic are that their event-driven business strategy is working with excellent traffic thanks hosting various musicians at store locations for local appearances. Again, this is another smart move for the retailer and one that others, such as Urban Outfitters, are trying to duplicate.
Zumiez Down 13.8%
Zumiez reported that their same-stores sales are down 13.8% which is less than they predicted but still a sign that the action sports-based retailer is being hit by the recession like many others in retail. As we’ve noted, action sports in many demographics is not necessarily increasing and in other demographics, is actually on the decline (where in others, are still sitting on untapped potential). In addition, there’s more crossover than ever before of young people moving their shopping to other locations besides action sports retailers and boutiques, especially into fast-fashion stores such as H&M, Uniqlo, Forever 21, and Hot Topic (even though Hot Topic is not considered a fast-fashion retailer). More details on this are available in our new Spring Youth Culture Study 2009.
Finally, to compare other popular youth culture retailers and April same-store sales reports, Abercrombie & Fitch took a hit with a 22% decrease; Aeropostale was down 20%; American Apparel down 7%; American Eagle down 5%, The Gap down 4%, and Urban Outfitters down 9.6%. In comparison, Hot Topic and Uniqlo’s increases seem extraordinary.