Today’s teens, also known as Gen Z, might not like the music, politics or other cultural mainstays of previous generations, but they have definitely taken a liking to an ageless fashion favorite—denim.
Teen-focused retailers Urban Outfitters, American Eagle Outfitters and Abercrombie & Fitch all called out denim jeans as winners in reporting their second quarter results. Among these retailers, much of the denim product is being purchased through e-commerce, although an omnichannel approach is at the forefront.
Jay Schottenstein, executive chairman and CEO of American Eagle, said the American Eagle Brand achieved its 20th straight quarter of record jeans sales.
Related Stories
“The team remains consistently focused on developing the highest-quality and newest fabrics,” Schottenstein said. “We offer compelling fits and styles that strongly resonate with our core consumer and attract new customers to the brand. Our focus on quality and newness goes beyond bottoms. We continue to offer the best merchandise to complement our jeans across all apparel categories.”
The American Eagle and Aerie brands posted positive results across stores and e-commerce in the quarter and through the back-to-school season, and Schottenstein said the momentum is expected to continue.
And it’s bottoms leading the charge, according to American Eagle global brand president Chad Kessler.
“The fall jeans collection is performing extremely well,” Kessler said. “Customers love the next level jeans, which feature the softest, most innovative fabrics and fits yet. Together with our true use sizing, we will extend our leadership at the jeans brand for this generation.”
Kessler noted that digital continues to post the strongest growth for the brand, driven by increases in mobile.
At Abercrombie & Fitch, CEO Fran Horowitz said the Hollister chain’s new “Carpe Denim” campaign, featuring recording artists Khalid and Noah Cyrus as the face of the campaign that supports a multiyear anti-bullying initiative, has seen a highly positive reaction. And from a product perspective, A&F’s aim of delivering consistent style and quality seems to be resonating with consumers, too.
“We have leveraged our closest customers and our agile supply chain to lean into certain trends, such as varsity and track. We saw great response to our emerging trends across bottom categories, including skirts, soft bottoms and denim,” Horowitz said. “We were early to deliver side stripe denim, and we expect this trend to continue to be big in the third quarter.”
Urban Outfitters CEO Richard Hayne for the company’s Free People business, denim and movement (or activewear) are currently the two fastest growing categories.
Emphasizing the multichannel approach, chief financial officer Frank Conforti said, “Within our URBN Retail segment, both the digital and store channels delivered positive comps during the quarter. Digital continued to lead the way, posting double-digit sales increases at each of our brands driven by increases in sessions, average order value and conversion rate. For the store channel, it is now the second quarter in a row that our store comps have been positive at each of our brands.”
Showing its commitment to brick-and-mortar stores despite digital growth, in the six months through July 31, the company opened seven new locations–three Free People stores, two Urban Outfitters units and two Anthropologie locations. It also closed two locations, one Urban Outfitters and one Anthropologie store.
Conforti noted that “the perfect scenario” for omnichannel strategy is strong digital growth offsetting increases in delivering logistics, “and then when the store comp itself is healthy as it is right now, you are able to flow through an even greater rate of leverage…straight to the bottom line.”
