Retailers like Abercrombie & Fitch, Aeropostale, and American Eagle are facing slow traffic and declining sales.
The brands are shuttering stores and changing their strategies to lure back customers.
Business has gotten so bad that famed Abercrombie CEO Mike Jeffries abruptly retired last week after more than two decades on the job.
Three major trends have led to the decline of Abercrombie and other major teen retailers, retail expert Robin Lewis writes on his blog.
Here are the trends.
1. Advancing competition.
For years, Abercrombie & Fitch and others ruled teen retail. Young customers unquestioningly bought the brands’ logo t-shirts and expensive jeans.
But fashion fashion retailers like H&M and Forever 21 have changed the game. These brands offered wider assortments, cheaper prices, and fresher styles than the typical teen retailers.
As a result, teens were hooked and haven’t looked back.
Abercrombie & Fitch has been particularly hurt by this trend, according to Lewis. While American Eagle and Aeropostale tried to offer more trendy clothing, Abercrombie has only recently begun changing its styles.
2. Customers aren’t spending as much money.
While the economy has recovered from the Great Recession, apparel retailers continue to struggle.
Macy’s CFO Karen Hoguet told analysts that consumers had priorities other than clothing and housewares.
“Shoppers are spending more of their disposable dollars on categories we don’t sell, like cars, healthcare, electronics, and home improvement,” Hoguet said in a call with investors.
To make matters worse, teens are increasingly spending money on technology and fast food.
When their limited dollars are going toward iPhones and lattes, there isn’t much leftover for clothing.
Teen retailers have adjusted prices accordingly, but many customers have already moved on to fast fashion.
3. Changing fashions.
US customers are fed up with logos and are increasingly wearing nondescript clothing.
This trend favoured the fast fashion retailers.
Abercrombie & Fitch’s business was built on the idea that people would pay for the status of its brand.
But as brands became less important, teen retail started hurting.
Abercrombie has stated it will phase out logos by 2015.
American Eagle and Aeropostale have also started offering trendy pieces over logos.
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