When Kathleen Jordan stopped at a Victoria’s Secret a year ago to buy something for herself, the visit had an unintended consequence: her 13-year-old daughter got hooked on Pink, the lingerie brand’s young collegiate line.
“Now she has more bras than I do, in every color under the sun,” said Jordan, a principal at design and architecture firm Gensler in New York. “She’s not alone -- all her girlfriends are into Pink, too. I recently overheard one of her girlfriends excitedly sharing the details of her favorite Christmas gift from Pink.”
Limited Brands Inc. (LTD)’s Victoria’s Secret isn’t the only retailer generating sales as it becomes more acceptable for middle-and high-school girls to show off bras under clothing and buy intimates. Teen chains are, too. Hot Topic Inc. (HOTT:US) is testing an edgy lingerie line called Blackheart, and Urban Outfitters Inc. (URBN) (URBN), which has said intimates could eventually make up 10 percent of sales, has bolstered such offerings across its brands. Even Justice, the store for 7- to 12-year-olds owned by Tween Brands Inc., is selling $21.90 tie-dye bras and $9 flowered panties online.
Retailers are taking care to present the garments as cute versus sexy, said Marcie Merriman, founder of retail and brand strategy consultancy PrimalGrowth in Columbus, Ohio.
Stores are “all going to say they’re targeting 18- to 22-year-olds, but the reality is you’re going to get the younger customer,” she said.
U.S. retail sales growth slowed last month, according to the Commerce Department, climbing 0.1 percent amid stubborn joblessness and higher taxes. Clothing stores eager to boost sales see a goldmine in women’s intimates. The category now generates more than $11.1 billion in annual sales, according to NPD Group, a Port Washington, New York-based market research firm. Limited Brands has said its approximately $1.5 billion Pink brand may be a $3 billion business in a few years.
Limited Brands (LTD), American Eagle Outfitters Inc. (AEO:US) and Hot Topic were among the top-performing retail stocks last year. Limited Brands gained 17 percent, Hot Topic rallied 46 percent and American Eagle rose 34 percent, compared with a 13 percent increase for the Standard and Poor’s 500 Index. About 96 percent of analysts recommend holding or buying Limited Brands shares, according to data compiled by Bloomberg. All 24 analysts surveyed recommend buying or holding American Eagle.
“Sensuality and body image continues to be a message that young girls are seeing and are being exposed to in a much less controlled fashion perhaps than even 10, 12 years ago,” said Dan Stanek, executive vice president at brand consultancy Big Red Rooster in Columbus, Ohio. They’re aiming to imitate the lingerie styles worn by role models and celebrities seen on the Web and social media, he said.
Victoria’s Secret was among the first to tap the market, introducing Pink in 2004. The sub-brand is geared toward college girls, with sweatshirts emblazoned with university sports team logos and brightly-colored bras and panties. Limited Brands is opening freestanding Pink stores and adding more of the merchandise to Victoria’s Secret locations.
The brand, while shopped by a variety of ages, is a hit with younger customers and working to lure more. At the Victoria’s Secret Fashion Show in November, the company hired teen heartthrob Justin Bieber to perform during a segment showcasing Pink merchandise.
“When somebody’s 15- or 16-years-old, what do they want to be?” Stuart Burgdoerfer, chief financial officer of the Columbus, Ohio-based company, said at a conference in Miami last month. “They want to be older, and they want to be cool like the girl in college, and that’s part of the magic of what we do at Pink.”
Teen retailer American Eagle, which introduced its $250 million Aerie intimates brand in 2006, is also betting on the category, opening more stores alongside namesake locations and expanding online. It’s leveraging pop culture as a marketing tool, as well. Last month, the Pittsburgh-based company said it hired Jenn Rogien, the costume designer for HBO’s “Girls,” as Aerie’s style and fit expert for six months.
American Eagle (AEO), which had 154 Aerie stores as of Oct. 27, started carrying more bras, underwear and loungewear in the past couple of years while cutting back on broader apparel.
“It has been timely because you do see this as a growing category in the industry for sure,” Jennifer Foyle, Aerie’s senior vice president of global merchandising, said in a telephone interview from Hong Kong, where she was traveling for business.
A major part of that is the fashion trend of wearing bright, lacy bandeau tops, bras that allow multiple strap positions and longer items called bralettes that can be glimpsed under tank tops, crop tops and other shirts. The bra as a fashion item has grown popular at outdoor music festivals, with Aerie even promoting a “Concert Bra” -- which can be worn on its own or under a blouse or jacket -- in conjunction with the Coachella festival last year, she said.
Lingerie makers have to be careful adjusting their messaging for a younger audience so it’s more about the girl and less about dressing in a way that’s appealing for men, Merriman of PrimalGrowth said.
“We really use the word ‘pretty’ more than ‘sexy’ --that’s really not the Aerie girl,” Foyle said. “We see this white space out there for the kind of trends we want to address. We see Gen Y as a very confident young lady who doesn’t need to be the showy supermodel, she’s just confident in herself.”
Limited fell 1 percent to $44.27 at 9:32 a.m. in New York while American Eagle declined 0.1 percent to $20.19. Hot Topic was unchanged at $10.94.
For Hot Topic’s new Blackheart lingerie line, Chief Executive Officer Lisa Harper described a customer searching for a different look than that worn by Victoria’s Secret’s iconic supermodels.
“We feel like the darker, edgier, sexier rock star mentality works well with our core brand,” she said in a telephone interview. Blackheart, which recently featured a $20 skull-print balconette bra and $65 cheetah-print lace corset among top picks on its website, hopes to draw in graduates of the Hot Topic stores in their late teens and 20s, she said.
The dark, neon-lit stores contrast with the bubblegum appeal of Victoria’s Secret’s Pink stores and Harper said the models intentionally look older than those at Aerie as Blackheart is not looking for a young teenage customer.
“Victoria’s Secret has taught the consumer that they should have this fantastic experience while they’re shopping for their lingerie and intimate apparel, and the department stores aren’t as able to give that specialized perspective or experience to the customer,” Harper said. “Other specialty players are looking at providing that equivalent or a better experience.”
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