Clothing retailers hurt by changing youth attitudes

Gap, which drew legions of young adults in the 1990s with classic khakis and swing-dancing ads, is again banking on young, hip customers to resuscitate its sales.

Too bad they’re broke now.

Weighed down by high unemployment, student-loan debt and concerns that the economy will continue to struggle, young people are reluctant to shop, according to researcher WSL Strategic Retail.

That reluctance, while particularly troubling for Gap, is hurting sales at other clothing chains such as Urban Outfitters and Aeropostal, while a few, such as Hennes & Mauritz, are doing better. In a few years, it also may deprive higher-end retailers, such as Nordstrom, of customers.

WSL chief executive Wendy Liebmann said: “There is a notion among retailers that young shoppers are more resilient and will come back sooner. The reality is that they don’t have money to spend, and retailers aren’t paying enough attention to this.”

Almost a quarter of 18-to 34-year-olds do not make enough money to cover basic needs such as rent, car payments and food, WSL said. These shoppers do not have much to spend and seek promotions instead of desirable brands, she said.

Companies tried to hook customers in their 20s, hoping to gain a loyal customer for decades to come, said Eric Beder, an analyst at Brean Murray Carret & Co.

“The age group Gap is marketing to, 18- to 34-year-olds, is only drawn in by sales and promotions, maybe they want to be wired and fashion-driven, but they’re not willing to pay for it.” Mr Beder said.

It may take more than ads to get young adults back, he said. Retailers such as Gap, Urban Outfitters and Abercrombie & Fitch are offering “unprecedented” sales and discounts, he said.

“This shopper refuses to pay a premium,” Ms Liebmann said.