Youth Will Be Served

By Christopher Palmeri, Edited by Deborah Stead

Browse Issues

Browse the BusinessWeek Archive

Story Tools

• post a comment
• e-mail this story
• print this story
• order a reprint
• suggest a story
• digg this
• save to del.icio.us

As most retailers reel from a dreadful holiday season, a little-known apparel chain has cause to celebrate. The Buckle (BKE), a 388-outlet youth-oriented retailer, had a great December, with year-over-year sales climbing 13.5% on average at stores open for at least a year. Overall sales for 2008 are on track to grow 26%, to $780 million, one of the best performances in retailing.

How does the Buckle do it? Most specialty retailers slap their own logo on merchandise. The Buckle does 70% of its business in independently owned lines. Its buyers stay on top of the hot labels—Affliction Clothing and MEK Denim, for instance—a strategy made for the Internet Age, when buzz travels fast and popularity can be measured in months. Using its "shallow and wide" inventory strategy, the chain stocks dozens of hot brands but usually in just a few sizes for each style. Alterations are free. New merchandise arrives daily, but not in the same colors or design as what it replaces. That way, an outlet's customers—typically the 15-to-25 set—don't see friends in the same outfits.

Now with outlets in 39 states, the Buckle began as a men's clothing shop in 1948 in Kearney, Neb., where it is based. The founder's son, Daniel Hirschfeld, is chairman and owns nearly half of the stock. Of the top eight executives, seven began as store clerks. The chain's clerks typically earn a 3% commission, not unheard of but above the norm, says KeyBanc Capital Markets analyst Edward Yruma.

The Buckle isn't the only apparel chain doing well in tough times. Teen-oriented Aeropostale reported holiday sales that were nearly as strong. One reason stores like the Buckle seem to be holding up best, says Maritz Research consultant Thomas Krause: a focus on Gen Y. "This is their first recession, and they're not as scared as everyone else," he says. "Their home equity is not at stake, and their 401(k) is just getting started."