KEN IGE / KIGE@STARBULLETIN.COM Melissa Sloan, 14, of Pearl City, talked on the phone while shopping Thursday at Macy's new Thisit teen section at Pearlridge Center.

Teen shoppers defy the downturn,
usually on their parents' dime

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By Russ Lynch
rlynch@starbulletin.com

As fears grow among mainland retailers that they may have overestimated a teenage market that is now beginning to lag, Hawaii retailers are investing big in just that market.

The isle retailers are confident the economic setback resulting from Sept. 11 will not trickle down to the disposable income of teen shoppers.

Macy's, for example, recently opened large departments in its Ala Moana and Pearlridge stores aimed specifically at the teen market, incorporating places for teens to gather and, of course, spend money.

Called Thisit, which Macy's says is pronounced "this is it," the sites are a 17,800-square-foot section at Pearlridge Center and one of 13,650 square feet at Ala Moana.

"Macy's is very high on the young business," said Judy Larch, Macy's vice president for marketing in Hawaii. "We've had a really nice response from teens at Ala Moana and Pearlridge."

KEN IGE / KIGE@STARBULLETIN.COM Milton Bradley of Waianae waited for his 13-year-old daughter, Krystal.

One thing Larch likes is that at Pearlridge the Thisit store mixes juniors' (girls') clothes with young men's in the same area, all accompanied by a dance-club atmosphere of music and videos.

"It's become a teens' hangout place and that's what we want," she said. "We want them to think of Macy's as a place to hang out with their friends."

Larch did not have an estimate of the investment the company made in the new concept but she said it wasn't huge.

"It's about an environment, about a concept. There's a bare concrete floor, open ceilings. We're not talking Brooks Brothers mahogany walls here," Larch said.

The result is what counts and kids like it, she said.

Teenage willingness to spend seems well established in the islands, though statistics are hard to come by.

"I think teens are spending more than ever," said Jody Shiroma, editor or "Sassy" and "G," two magazines in one aimed at female and male teens.

The magazine is distributed free in Hawaii schools and aims specifically to "empower teens in Hawaii."

"Most of them (teens) know about Sept. 11 but a lot of them don't feel it has affected them," Shiroma said.

KEN IGE / KIGE@STARBULLETIN.COM Anita Manzano held 1-year-old daughter Janice Manzano as 13-year-old big brother Jason Manzano, right, played foosball against friend Steven Bolosan, 13. The four were shopping Thursday at Macy's teen department, Thisit.

She has friends and contacts across the country and from those sources and her own research she has learned that retailers selling to teens have been hit hard, but she doesn't see that happening here.

"From all the research I've done, and in dealing with teens a lot of the time, adults take teens for granted," she said. "They have opinions, they're smart, they're savvy, they know what they like." In addition, they are more comfortable with technology than their counterparts of only a decade ago, Shiroma said.

"All of them are growing up with computers from kindergarten," she said. They know how to send and receive text messages on their cell phones, download MP3 music files and do a host of other technical things their parents don't know how to do.

Her reading on the teen business climate in Hawaii is that it is going extremely well. "More people are realizing that the youth market is a viable one. They are mini-adults. They build brand loyalty at a young age," she said.

Look around at any shopping mall or other place where teens gather and one aspect of the teen economy is quickly apparent. They carry their own telephones.

Well, most likely Mom and Dad are paying for them, but teen use of wireless gadgets is soaring, dealers say.

And while other aspects of the economy got hit in the spending pull-back that followed Sept. 11, cell phones went in the other direction.

"Sales across the board increased after 9/11," said Andrew Colley, a spokesman for Verizon Wireless.

For example, Verizon's Freeup service, which uses a prepaid card system, has caught on with kids because there is no annual contract and no credit check.

But it is also marketed as a tool for safety and security. One phone can be kept in the glove compartment of the family car just for emergencies and it doesn't run up bills unless it is used, Colley said.

Sprint PCS said the gizmos on wireless phones are catching on fast with teen consumers -- the ability to download photos, music and games, along with fancy colors and customized ringers that play a special tune so you know it's your mother or your boyfriend calling.

"They're pretty much a portable PC. You can send and receive mail or digital pictures, or play interactive games," said Les Young, Hawaii retail manager for Sprint PCS.

Having raised teenagers himself, Young said: "I can't think of another word, but it's really neat stuff."

A phone like that can cost $150-$180, plus the monthly service price, but that doesn't seem to deter teens, he said. "They'll give up the $150 Nike shoes to afford a cell phone," he said. "So maybe the amount they spend hasn't changed," they are just shifting the money.

Meanwhile, teens consider a carry-around phone a necessity rather than a luxury, Young said.

Parents pay the bill, but kids have jobs, too, and many are paying their own way for phones and other goods and services, research shows.

Teens spent $172 billion in the United States last year, according to a national survey by Teenage Research Unlimited. That was up 11 percent from $155 billion in 2000.

Teens spent an average of $104 a week last year, counting their own purchases and goods and services they were buying at their parents' direction, and that was up 23.8 percent from $84 in the previous year.

But the trend-reporting firm said that a lot of its research was done before Sept. 11 so the figures may no longer be accurate.

This year, teens are reporting that their parents are trimming their allowances and they are being more careful with their money.

Teens will spend if they encounter the right mix of goods in the right atmosphere, said Cindy Mikami, merchandise manager in Hawaii for Jeans Warehouse, which has 17 apparel stores in the islands.

"It doesn't seem like they have less money," she said. "The parents will give whatever leftover money they have to the kids."

Mikami said the normal purchase by teens at Jeans Warehouse runs to between $20 and $40.

"It doesn't seem like there's a teen recession," she said.

But a number of publicly traded retailers across the country that cater to teens are reporting lower earnings, including Abercombie & Fitch, Pacific Sunwear and Hot Topic, according to the Wall Street Journal.

Teen spending has slowed, sparking the use of the word "recession" in connection with that market, the paper said.

But some of the retailers have blamed merchandising mistakes -- guessing wrong in the selection of new products, only to find that they didn't sell.

Others said they see no change and teen-age buying still seems recession-proof. Analysts, however, are beginning to see teen spending as a lagging economic indicator, with their outlay beginning to slow now that their parents are feeling the pinch of the slow post-Sept. 11 economy.

Across the country, sales have been slow in the current back-to-school season.

Parents nationally plan to spend an average of $302.31 on back-to-school merchandise, 10 percent less than they forecast last year, according to a survey by America's Research Group reported by Bloomberg News.

Of the 800 parents polled, 86 percent said they would buy less and 14 percent said they would look for cheaper items.

In the islands, there are 164,108 people between the ages of 10 and 19, according to the 2000 census.

There are 32 million people in the United States between the ages of 12 and 19 and the number has been increasing steadily since the early 1990s, as the children of baby boomers entered their own teen years, Teenage Research Unlimited said.

Teen spending Teens across the country spent $172 billion last year, up 11 percent That included an average of $104 a week, counting items bought at their parents' direction. Parents nationally planned to spend $302.31 on back-to-school merchandise, 10 percent less than last year. Of 800 parents polled, 86 percent said they would buy less and 14 percent said they would look for cheaper items.