Aeropostale Busts Record Shares -Invests in Technology
The distinct differences in performance between some companies in youth culture fashion are so opposing these days, that it’s fascinating to report when one company, such as Aeropostale, reports a fourth quarter increase of 48% to a record $.99 per share, for a total net sales in the fourth quarter increasing some 16% to $801.2 million, and same store sales increasing 9%, while other brands in this report continue to struggle based on strategies that proved they were late to the game.
This news is on the cusp of the release of Label Networks’ 10th Spring Youth Culture Study -North America tracking 13-25-year-olds across a broad variety to topics, including fashion, footwear, and accessory brand preferences. By knowing what the consumer is thinking, vs. retail performance that indicates what happened in the past, brands can stay ahead of trends rather than wonder what ever happened to their former reign of success.
Back to Aeropostale, their March 11, 2010 reports are absolutely glowing, indicating that not all of the youth culture marketplace in fashion is in trouble, despite the recession.
Co-Chief Executive Officers Mindy C. Meads and Thomas P. Johnson, said, “We are very pleased with our strong performance for both the fourth quarter and full year. We continued to build upon our brand momentum and experienced record breaking periods for Aeropostale. These results were achieved through the power of our nimble and flexible operating model, combined with the hard work of our entire organization.”
Why is Aeropostale doing so well? We think there are a couple of key reasons: the Spring merchandise was on trend with their consumers and their ecommerce solutions increased a tremendously %u201342% to $63.9 million from $45 million a year ago.
What’s interesting about both of these strategies is that so many stories are now coming out about how the fashion industry was woefully slow on utilizing new technology, including streaming fashion runaway shows, and developing ecommerce solutions. Now, as fashion runway season wraps-up in Paris, this is the first time that more than a handful of top designers actually launched streaming video of their shows. This is a good thing, especially if brand hopes to attract more consumers (a generation that has grown-up online) to their collections. While the much-hyped Burberry 3-D stream, for example, isn’t yet quite at the technological level of Tokyo Girls Collection show where you can not only watch it, but buy the clothing right there, live, and on your mobile phone, things are moving in a more efficient and consumer-friendly direction.
And as Aeropostale points out, one of their reasons for success is due to “investing in technology.”
Pacific Sunwear Reports Another Beating on Long Road to Recovery
It depends on which financial news you read vs. the actual financial reports from publicly traded companies themselves to get a sense of the real news behind how many youth culture brands are doing today. Pacific Sunwear, once the sweetheart retailer of the surfing and skateboarding industry, even bringing on formerly retired Vans CEO Gary Schoenfeld, admitted that they still had a long way to go. On March 11, the Anaheim, CA, company reported their 4th quarter 2009 ending January 20, 2010 down a whopping 17% from $293 million from $353 million and year previous.
However read various publications such as the Orange Country Register and you see the glimmer of hope with statements that start of the article such as “Pacific Sunwear beat Wall Street expectations ” so, like, that’s a good thing.
After hearing the news, investors started selling, with shares dropping 15%.
According to Schoenfeld, the future lies in the young men’s market vs. young women’s which still goes by the derogatory label “juniors” in many fashion industry circles.
“When I joined PacSun, given all that we needed to do I knew it would take time to turn things around. Eight months into the job, I’m encouraged by the changes we’re making and the prospects for PacSun to once again become a leader for teens in the mall,” stated Gary H. Schoenfeld, President and Chief Executive Officer. “We’ve still got a tough period ahead of us in our Juniors’ business, yet I believe our Young Mens’ categories can begin to lead the turnaround of our business as we look further ahead to Back to School and Holiday.”
Given that our data just came out in our 10th Spring Youth Culture Study -North America, we can say that we saw this coming from young consumers. Quite frankly, PacSun’s decrease has been happening for a longer time than the last year, which we’ve reported about previously. By looking at consumer data vs. sales data, it provides forecasting possibilities from the marketplace itself. In addition, we have data tracking top brands that PacSun has carried for the last 10 years and can tell you quantitatively which brands do well and which have fallen by topline, gender, and a variety of age groups -which also provides where specific target markets have been overlooked.
PacSun reports in their financial outlook that they hope to get back to positive same-store sales by the 4th quarter of 2010. But let’s face it, that’s quite a long ways off. And for brands depending on PacSun’s ability for a turn-around, they should be looking at other alternatives if they haven’t already.
Another major announcement on March 11, 2010 came from Quiksilver, which reported that consolidated new revenues from the 1st quarter of 2010 decreased 2% to $432.7 million from $443.3 million. Specifically, new revenues in the Americas decreased 8% during the first quarter to $187 million from $203.4 million, compared with 2% decrease in European net revenues, and a 16% increase in Asia/Pacific. Like many other large action sports and lifestyle brands, new markets in Europe and Asia (China, Taiwan, South Korea) are less saturated than in North America.
When looking at our Global Youth Culture Studies, including North America, Western Europe, Japan, and China, Quiksilver ranks within the top 5 brands that we have tracked that has changed the most in terms of youth culture preferences in the past 10 years. For more information, please email email@example.com about our Premium Subscription.
Quiksilver concluded by predicting 2nd quarter revenues to be down also.
Buckle Bucks Trends and Reports Increase
Finally in this week’s Retail Round-up, we take a look at the youth culture friendly brand Buckle, which reported comparable store new sales increase of 3.8%, or sales increase from 9.2% to $274.4 million from $251.4 million a year ago.
Like Aeropostale, Buckle did very well thanks their online sales, which increased 35.6%.
Retail Round-up: Aeropostale Busts Record Shares: PacSun’s Long Road; Quiksilver Down; Buckle Up
Aeropostale Busts Record Shares -Invests in Technology