All the places where 16-year-old you bought faux-beaten-up jeans and flannel shirts are fading fast. Aeropostale and American Eagle face tanking stock prices and Delia's has declared bankruptcy, as the AP reported in a recent roundup. And on Tuesday, Abercrombie and Fitch's CEO Mike Jeffries said he was stepping down after 11 consecutive quarters of sales declines.
High schoolers used to covet Abercrombie's expensive clothes (not to mention its catalogs, featuring models who, ironically enough, wore little clothing). These days, the company's stock price is anemic.
What happened to all your old favorite mall haunts? Here are four trends that helped bring them all down.
Teens are spending less
Teens are just spending less on themselves these days. According to this data from the University of Michigan's Institute for Social Research, the amount that teens spend on themselves has slowly tailed off since the late 1980s.
Those lines represent the share of high school seniors who say they spend half or more of their money on different categories. That slow decline of general spending on themselves (the top line, with the Xs through it) is one sign that teens are just less into shopping than they once were — the recession may have simply made our teenagers more frugal.
In addition, many teens are working less than they used to — throughout the 1990s, the teen employment rate was almost always above 40 percent. Today, 28.7 percent of teens have jobs. Couple that with tiny wage gains, and it's easy to see why teens would hold back on spending.
...and they're spending less on clothes in particular
Teens stopped spending so much on clothes around a decade ago, according to data from Piper Jaffray, which Business Insider highlighted earlier this year.
Teens have cut back on their clothing spending and have instead spent more on food, electronics, and video games. One other factor at play here also might be cheap "fast fashion" stores like H&M, said Ken Perkins, founder of retail research firm Retail Metrics.
"Abercrombie's model of $100 jeans and all its logo merchandise was a very high benchmark for most consumers to justify spending long-term, especially post-recession," he says. Meanwhile, cheaper "fast fashion" clothing options started growing aggressively. "Forever 21 has been expanding rather rapidly and bringing prices down. Uniqlo has been expanding in the US [and] also pushing prices down."
They've turned their attentions to cell phones instead
As that above chart shows, one area where teen spending has grown steadily, even while clothing has fallen off, is electronics. Many teens care more about having fashionable electronic accessories now than high-fashion clothing, as Rachel Harris and Elizabeth Abrams wrote in the New York Times earlier this year.
"Apparel is very discretionary and younger consumers aren't as fixated on apparel as previous generations were," says Perkins. "They're spending more on data plans, cable, internet, smartphones, tablets, those types of things, and apparel has become somewhat secondary."
This saps money away from clothing in two ways. One, it gets teens spending on electronics, and two, they need wifi on which to operate their gadgets, as the Times wrote. Wander around a city and where does wifi exist? Restaurants. That may be one reason why spending on food has spiked — teens hang out at restaurants more in order to be able to use their new Androids.
Malls are dying
In the last three years alone, foot traffic at malls has fallen by nearly half, according to this data from Shoppertrak and the Wall Street Journal.
What's really depressing here is that even while the change in foot traffic (right axis) seems to be increasing, it's still negative. For businesses like Abercrombie, Aeropostale, and American Eagle in particular — retailers that are mall mainstays — that hurts. It not only shows that fewer people are visiting those stores, but it also means fewer people wandering through the mall might stop in and make an impulse buy or two.
There are a number of theories behind the demise of the shopping mall: less disposable income for many consumers, particularly low- and middle-income consumers, has hurt malls that cater to those sets. Malls anchored by luxury stores are surviving, while those anchored by mid-priced stores like JCPenney are flagging. In addition, the return of growth to city downtowns — mean that people in urban centers can just shop there, rather than trekking out to a mall in the 'burbs, where teen clothing stores used to thrive.
All clothing stores are having problems
It's not just teen clothing stores; sales at all apparel stores have flattened in the last few years, when you adjust them for inflation. Despite a growing population (one that, presumably, wants to keep getting dressed in the morning), those sales are stuck at roughly where they were pre-recession, making the competition in that field all the tougher.