Teens cut costs amid job loss, price hikes

ASSOCIATED PRESS

The souring job market and rising costs of the usual teenage indulgences — a slice of pizza, a drive to the mall, the hottest new jeans — are causing teens to do something they rarely do: be thrifty.

It’s a far cry from the freewheeling spending of recent years, when teens splurged on $100 Coach wristlet handbags, $60 Juicy Couture T-shirts and $80 skinny jeans from Abercrombie & Fitch.

Now jobs for teens are less plentiful, and parents who supply allowances are feeling the economic pinch themselves.

The stalwart retailers of teen apparel, such as Abercrombie and American Eagle Outfitters Inc., are reporting sluggish sales, defying the myth that teen spending is recession-proof: It holds up longer, but eventually it can fold.

It’s even becoming cool to be frugal.

Last month, Ellegirl.com, the teen offshoot of Elle magazine, launched a new video fixture called Self-Made Girl, which shows teens how to make clothes and accessories. The first video offers tips on how to create a prom clutch.

“It’s a little tacky in the economic unrest to tote a big logo bag,” says Holly Siegel, the site’s senior editor. She says it’s no longer about teens “one-upping each other,” but rather where they can get something cheap.

Victoria Bradley, a 16-year-old from Springfield, Mo., says the $80 she earns each month from baby-sitting is being eaten up by more expensive school lunches, late-night snacks with friends and stylish clothes.

Now, she says, she and her friends head for the thrift store or just browse at the mall.

“I used to be able to buy a T-shirt and jeans every couple of months,” Victoria says, adding that some of her friends are even “making their own clothes or altering their old ones to fit or look better.”

Victoria’s mother, Michelle Bradley, says she and her husband cut back spending on themselves last year and early this year also started paring back “frivolous” buying for their three daughters.

“We have made a conscious effort to not use credit cards,” says Mrs. Bradley, who stopped paying for Victoria’s text messages in March. The top priority is school supplies and choir fees.

The job market for teens isn’t what it used to be, either. Nathan Reeser, a Cincinnati 15-year-old, lost his job making pizza five months ago and has had to cut back on spending. He’s shopping more at Target and less at Abercrombie & Fitch’s Hollister stores.

“Now, I just get money from my parents, but they don’t have as much because of taxes and everything else,” he says.

Teen hiring has slumped by 5 percent since March 2007, with many mom-and-pop stores, which typically hire younger workers, laying off employees. Hiring in the overall job market fell by just 0.1 percent during the same period.

That’s still not as bad as the 13 percent drop in teen hiring in the early 1990s. That means that if the larger job market mirrors the last teen hiring slump, “we’re not out of the woods,” says Michael P. Niemira, chief economist at the International Council of Shopping Centers.

Economists say this teen spending slump could be the worst in 17 years, when teen frugality led to the demise of once-hot Merry-Go-Round Enterprises Inc. and ushered in an era of flannel shirts and torn jeans.

What makes this slump different, says Deloitte Research chief economist Carl Steidtmann, is the soaring cost of basics such as food and gas, which have a direct impact on younger consumers.

Gas could reach $4 a gallon this summer, and prices for such teen favorites as pizza and potato chips have climbed, squeezing the amount of cash teens can spend elsewhere.

Secondhand clothing chains have seen business surge this year as teens and their parents buy popular brands such as Gap, Banana Republic and Juicy Couture at a fraction of the regular price.

Kerstin Block, president and co-founder of Buffalo Exchange, a Tucson, Ariz.-based chain that sells secondhand clothing, says Gap jeans there run $9 to $20. A new pair runs $50 to $60. Miss Block notes that buying secondhand also is appealing to a growing eco-friendly sentiment among teenagers.

“It is way cooler to get a super deal on that shirt rather than being able to spend the most money on something,” says Anna D’Agrosa, director of consumer insights at the Zandl Group, a market research company focusing on teens. “Kids are becoming really aware of what is happening to their economy and to their families.”