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03 Oct 2016

Rebel Teens Are Killing America’s Clothing Giants

Two years ago, Aéropostale Chief Executive Officer Julian Geiger shared his view of the adolescent shopper. “The teenager today wants to fit in,” he told analysts. “They want to fit in by wearing things that make them feel safe. If there’s a brand promise toAéropostale, it’s that the teenager can wear our clothes, go to school, and not be teased or made fun of the way they look.”

It turned out he was wrong. After decades of battling with rivals Abercrombie & Fitch and American Eagle, brands that realized normal didn’t sell anymore and sought to reposition themselves, Aéropostale doubled down and ended up the ultimate loser in the teen fashion wars. More broadly, the bankruptcy of this giant of the American mall is a cautionary tale for other retailers, like Gap Inc. and its Banana Republic unit: Not only are teenagers happy to stand out these days—so are their parents.

Back in 2011, Aéropostale was riding high. Annual sales hit a peak of $2.4 billion and the company was profitable. Suddenly, it fell apart. Fickle teens didn’t want to be walking billboards of logo apparel. They flocked to trendier shops like Forever 21 and H&M to buy clothes with more personality. No one wants to be teased, sure. But that won’t sell clothes when kids think being ignored is worse.

Nowhere to turn

Aéropostale was caught in a trap. Teens didn’t want to wear logos anymore, but without its logo, Aéropostale lost its identity. Justina Sharp, a 19-year-old fashion blogger who runs the site A Bent Piece of Wire, said that once logos went out of style, there was nothing unique about Aéropostale that appealed to the teen.

“Aeropostale seems like somewhere your mom takes you for back to school shopping,” said Sharp. An Aéropostale spokesperson didn’t immediately provide a comment.

While A&F and American Eagle also strained to right their ships, Aéropostale was sinking. The New York-based company shed almost 40 percent of its sales in five years—nearly a billion dollars in revenue. Shares fell almost 98 percent, and the retailer managed to post just one quarter of positive comparative sales since its peak back in 2013. Finally in May, Aéropostale filed for Chapter 11 bankruptcy protection, and shut down more than 150 stores.

The collapse ended an era of strife for Aéropostale. In the early 2010s, as teens began to shun logos, the company refused to shift with them at first. Seen as a cheaper alternative to A&F and its sister brand Hollister, which were surging to new highs in the mid and late 2000s, Aéropostale had lower margins and was the most exposed. As more teens drifted away, the company had little room to maneuver, and the moves it did make ended up making things worse.

High school uniform no more

The brand got its start almost 30 years ago as a uniform for preppy kids in Gen X high schools. Like its rivals, Aéropostale’s branded clothes signaled the wearer to be cool, conformist, and therefore acceptable in the suburban American high school. Now, with its name drained of that power, what else could it offer teens? Executives tried to copy the fast-fashion companies, like Zara and H&M, by offering similar, logo-less styles. It didn’t work, and even worse, the clothes were so different they pushed away the loyal shoppers who had stuck around. In its bid to survive, Aéropostale’s clothes lost their common design aesthetic, said Adheer Bahulkar, a partner at consulting firm A.T. Kearney’s retail practice. The brand’s identity was lost.

Read more about it here: http://bloom.bg/2dn18Mx

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