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Retailers turn to Facebook, teen models to boost back-to-school shopping

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MarketWatch
Published:
  • Tanya Alvarez, center, of Manhattan, and Courtney Strange, left, of Philadelphia, shop during the grand opening of the Material Girl clothing line at ...

    Tanya Alvarez, center, of Manhattan, and Courtney Strange, left, of Philadelphia, shop during the grand opening of the Material Girl clothing line at Macys, Tuesday, Aug. 3, 2010, in New York. Half-priced jeans and promotional freebies are already popping up at the mall with the start of school still weeks away. (AP Photo/Mary Altaffer)

  • Escalator traffic is light during the lunch hour at Pioneer Square shopping center in Portland, Ore., Tuesday. Retailers are putting their focus on th...

    Associated Press

    Escalator traffic is light during the lunch hour at Pioneer Square shopping center in Portland, Ore., Tuesday. Retailers are putting their focus on the back-to-school season, hoping that will spur sales.

NEW YORK -- For the first time, teen retailer Abercrombie & Fitch Co. is tapping Facebook as a marketing tool in a promotion that gives teens a shot at Hollywood fame.
Abercrombie also relaunched its racy quarterly magazine for the first time in seven years, and rival Aeropostale Inc.'s new initiatives include advertising in Teen Vogue and featuring real teens in addition to models in its campaigns.
Discounter Target Corp. will increase the number of schools it offers transportation to and from for college freshmen's after-hours shopping. And office-supply chain Staples Inc. has a new deal to give back the full cost of its computer service plan if the customer never uses it throughout the plan's life.
As retailers head into the critical back-to-school season, the industry's second-biggest selling period, they're using an array of new tools and deals to spur consumers to buy. They also hope exclusive products such as Madonna's Material Girl line at Macy's Inc. and trends such as skinny jeans, so-called jeggings and iPads, will spur demand.
The stakes are high because back-to-school sales typically serve as a barometer of consumers' propensity to spend during the critical holiday season. Retailers look at the period's performance to see if they need to tweak any holiday plans, analysts said.
"This is a great indicator for the holiday season," said Edward Yruma, an analyst at KeyBanc Capital Markets. "It's going to be pretty negative as consumers demand more value and retailers have to be more promotional than they were last year. Promotions are at a very near-term high."
With second-quarter GDP showing a slowing U.S. economy, consumer confidence falling to the lowest level since February, and teens' jobless rate about triple the already high national average, retailers are accelerating discounts and other promotions to clear excess goods and to entice budget-conscious shoppers, some of whom have taken a pause in spending, analysts said.
"I wouldn't want to be in the teen apparel business right now," said Maggie Gilliam of industry research and advisory firm Gilliam & Co. "It's too competitive."
Target, for instance, has been "strategically lowering" its kids' apparel prices, such as reducing its Cherokee girls T-shirts to $4.99 from $5.99, to be "priced competitively," said Janna Fischer, a company spokeswoman. She said the company has added more "weekly wows" including $7 denim in its circulars. Abercrombie said in July that its quarter-to-date average selling price declined 16 percent.
"It's really hard to predict back to school," said Chief Executive Wesley Card of Jones Apparel Group Inc., maker of l.e.i. jeans for Wal-Mart Stores Inc., in an interview.
"Consumers have been a little softer in recent weeks. They have clearly reacted to the various economic indicators," he said.
One sign of consumers' money worries: More parents are taking over the decision of what their kids will get for school. Only 24 percent of parents said they would let their children decide on the majority of their back-to-school spending, according to an America's Research Group and UBS survey.

Retail sales poor in July
Worried about the stalling economic recovery, Americans remained reluctant to spend at stores in July, especially on pricier items like jewelry, though they let go of some money for travel, according to data released Wednesday.
Revenue from high-end jewelry, which had held steady in June, plummeted in July from a year earlier, when the figures already were dismal. Furniture also suffered as the boost from homebuyer tax credits wore off. Shoppers even pulled back on shoes and children's clothing, while luxury spending -- excluding baubles -- was virtually unchanged.
The figures from MasterCard Advisors' SpendingPulse, which include transactions in all forms including cash, signal that spending remains choppy as shoppers grapple with an almost 10 percent unemployment rate and tight credit.

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