Teenagers Talk to Wall Street, Shopping Your Way to Better Investments

U.S. Bancorp Piper Jaffray Conducts a National Study of Generation Y Shopping

Behavior and Brand Preferences



Apr 11, 2001, 01:00 ET from U.S. Bancorp Piper Jaffray Inc.

    MINNEAPOLIS, April 11 /PRNewswire/ -- U.S. Bancorp Piper Jaffray Senior
 Softlines Retail Analyst Jeff Klinefelter today released data from a
 proprietary research survey regarding the spending habits and brand perception
 of high school students.  A total of 293 students participated in the national
 study, with an average age of 17.3 years and a gender balance of approximately
 47 percent female and 53 percent male.  As part of the study, Klinefelter
 visited nine high schools in nine cities covering the entire United States.
 Klinefelter began each visit by explaining to students what a Wall Street
 research analyst does, how he conducts research and how he determines ratings
 and price targets for certain retail companies.  Students then had a chance to
 put those research skills to practice by going to the mall and conducting
 their own research.
     Before they went to the mall, Klinefelter surveyed the participants to
 determine their favorite places to shop.  Based on those responses, the Gap
 was found to be the most frequent overall destination for shopping followed by
 Abercrombie & Fitch and The Limited's Express unit.  After they visited the
 stores, students were asked to rate the investment potential of each company
 based on Klinefelter's guidelines.  Teens in eight of the cities rated the Gap
 a "Top Hold" while those in one city rated it a "Top Sell."  None rated it a
 "Top Buy."  Abercrombie & Fitch was rated a "Top Buy" in four of the seven
 cities where teens were able to visit an Abercrombie & Fitch store.
 Abercrombie & Fitch was rated a "Top Hold" in two cities and a "Top Sell" in
 one.  Express was also given four "Top Buy" ratings, with one group rating the
 company a "Top Hold."
     "It is clear that the Gap brand remains 'top of mind' with teenage
 consumers, though they may not always like what they find there.  We expect
 this to translate to accelerating top line growth for the company once its
 product mix gets back on track with trend-right and differentiated product,"
 said Klinefelter.
 
                                      Top                   Activity
                Channel           Destinations              Frequency/
              Preference (%)          Rank                    Month
     Market Spec. Dept. Disc. 1st  2nd      3rd      Mall Movie Concert Sports
     Total    50% 39% 11%   Gap    ANF     Express  2.5  2.0  1.5 yr.  6.7 yr.
     Portland,
      OR      41% 36% 23%   Gap    AE      ANF      3.6  2.3  3.9 yr. 18.3 yr.
     Denver,
      CO      33% 49% 18%   Hot
                             Topic Mervyn's Express 2.7  2.9  1.7 yr   6.5 yr.
     Des
      Moines,
      IA      48% 52%  0%   AE     Old Navy Gap     2.2  2.5  2.1 yr.  3.4 yr.
     Apple
      Valley,
      MN      54% 42%  4%   ANF    Express  Gap     3.8  2.2  2.7 yr.  4.9 yr.
     Miami,
      FL      31% 55% 14%   Burdines Sears  Macy's  2.6  2.1  1.8 yr.  3.1 yr.
     Charlotte,
      NC      44% 42% 13%   Gap      ANF    Express 4.6  2.0  4.4 yr.  7.1 yr.
     Mahwah,
      NJ      71% 22%  7%   ANF      Gap    Old
                                             Navy   2.4  1.6  2.5 yr. 14.4 yr.
     Malibu,
      CA      49% 37% 15%   Gap      PacSun ANF     1.6  2.6  2.1 yr.  4.5 yr.
     Scottsdale,
      AZ      68% 18% 13%   ANF      Gap    Express 1.8  2.0  3.3 yr.  6.6 yr.
 
     Source:  U.S. Bancorp Piper Jaffray
 
     Klinefelter also had the students fill out a brand perception survey,
 which asked students to rate the prices of stores, whether they think it is a
 fashion follower or a fashion leader and whether they buy products at full
 price, full price and clearance or just clearance only.  "We confirmed our
 prior assumption that teenage consumers rank product pricing nearly as high as
 they do fashion. This is particularly significant considering the dynamic
 pricing environment in the specialty retail sector this year," said
 Klinefelter.
 
                                               Full
                    Price   Fashion   Fashion  Price  Full Price &   Clearance
     Brand       Perception  Leader  Follower  Only    Clearance       Only
     Abercrombie
      & Fitch (#)    3.2      78%       22%     28%       80%           17%
     American
      Eagle (#)      2.4      41%       60%     13%       77%           10%
     Banana
      Republic       3.3      79%       21%     32%       50%           18%
     Old Navy        1.6      21%       79%     15%       73%           12%
     Express         2.7      79%       21%     23%       68%            9%
     Gap (#)         2.4      60%       40%     13%       81%            6%
     Limited (#)     2.6      59%       41%     19%       71%           10%
     Pacific
      Sunwear (#)    2.4      68%       32%     11%       82%            1%
     Structure       2.7      64%       36%     12%       80%            8%
 
     Note:  Price Perception scale:  4 is very expensive, 3 is expensive, 2 is
 average, 1 is inexpensive.
 
     Source:  U.S. Bancorp Piper Jaffray
 
     Klinefelter said that Generation Y, defined generally as the children of
 the baby boomers and between the ages of 10 and 24, is the focus of several
 growth companies in the Softlines industry.  Estimated between 55 million and
 65 million in the United States, the group is growing faster than the overall
 population.  Furthermore, Klinefelter said there are currently more
 five-year-olds than fifteen-year-olds and this trend is expected to continue
 until 2012, which provides a foundation for several years of healthy growth
 for companies focusing on this age group.
     "In terms of spending patterns in the apparel category, the average
 monthly expenditure is $110, with a range of $60 to $149," said Klinefelter
 "The average number of trips-per-month to the mall is 2.5, which is slightly
 lower than the common assumption that teenagers visit the mall once a week.
 Also somewhat surprising were the indications that teenage consumers prefer to
 shop for apparel during the summer season first, the spring season second and
 the back-to-school season third.  We assume this is at least partly due to the
 timing of our survey (March) and possibly the lack of new fashion trends and
 key items during the most recent back-to-school season."
 
 
                                                              Preferred
             Demographics       Shopping Statistics          Time of Year (%)
     Market  Male  Female  Avg. $/Month % own  Trips/mo.  Spring  Summer  BTS*
                           Age             $
     Total      53%  47%   17.3   $110     49%    2.5        35%     42%   23%
     Portland,
      OR        53%  47%   17.1    $76     68%    3.0        24%     59%   18%
     Denver,
      CO        43%  57%   17.1   $149     59%    4.1        31%     59%   10%
     Des
      Moines,
      IA        55%  45%   17.2    $60     56%    2.5        27%     50%   23%
     Apple
      Valley,
      MN        39%  61%   17.3    $94     54%    3.2        44%     25%   32%
     Miami,
      FL        35%  65%   15.6   $129     33%    2.9        11%     63%   26%
     Charlotte,
      NC        54%  46%   17.8   $107     59%    2.8        46%     40%   14%
     Mahwah,
      NJ        71%  29%   17.5   $116     43%    2.0        47%     37%   16%
     Malibu,
      CA        76%  24%   17.7    $88     39%    2.6        18%     48%   34%
     Scottsdale,
      AZ        53%  47%   17.4   $125     65%    3.0        43%     34%   23%
 
     Source:  U.S. Bancorp Piper Jaffray, * Back To School
 
     According to Klinefelter's research, the specialty retail channel is the
 most preferred by teenage consumers for purchasing apparel and accessories.
 However, while 50 percent of survey respondents noted specialty stores as a
 destination, Klinefelter was surprised to find that department stores also
 ranked high with the students.
     "While we believe this is partly due to a narrower offering of specialty
 stores, it could also point to a lasting 'mind share' for department stores,"
 said Klinefelter.  "We also believe the department stores are important in
 urban markets due to the unique assortment of brands, many of which are
 available only in this channel."
     Jeff Klinefelter is a vice president of U.S. Bancorp Piper Jaffray and a
 senior research analyst, focusing on the softlines retail industry.
 Klinefelter joined the Equity Research department in 1997.  Prior to joining
 U.S. Bancorp Piper Jaffray, Klinefelter worked at Universal Asset-Based
 Services, Inc., performing asset evaluations for commercial lending
 institutions.  He also worked for Target Stores Division for six years in
 various merchandising, operations and strategic planning positions, including
 working in Inventory Management for multiple merchandise divisions.
 Klinefelter received a bachelor's degree in economics at St. Olaf College and
 an M.B.A. at the University of Minnesota Carlson School of Management.
     U.S. Bancorp Piper Jaffray, a subsidiary of Minneapolis-based
 U.S. Bancorp (NYSE:   USB), provides a full range of investment products and
 services to businesses, institutions and individuals.  The company's
 investment banking business has grown exponentially in the last several years
 by focusing on the needs of growth companies in the health care, technology,
 financial institutions, consumer and industrial growth sectors.  U.S. Bancorp
 Piper Jaffray has a national reputation for its expertise in fundamental
 research and equity and debt financing.  U.S. Bancorp offers a comprehensive
 range of financial solutions through U.S. Bank, First American Asset
 Management, U.S. Bancorp Investments and its Libra Division and U.S. Bancorp
 Piper Jaffray.  Securities products and services offered through U.S. Bancorp
 Piper Jaffray, Inc., member SIPC and NYSE, Inc., a subsidiary of U.S. Bancorp.
 
     Some or all of the following hedges may apply. (#) U.S. Bancorp Piper
 Jaffray, Inc., makes a market in the company's securities.  (~) A U.S. Bancorp
 Piper Jaffray, Inc., officer, director or other employee is a director and/or
 officer of the company. (@) Within the past three years, U.S. Bancorp Piper
 Jaffray, Inc., was managing underwriter of an offering of, or dealer manager
 of a tender offer for, the company's securities of an affiliate.  Additional
 information is available upon request.  Not FDIC Insured.  No Bank Guarantee.
 May lose value.
 
     This material is based on data obtained from sources we deem to be
 reliable; it is not guaranteed as to accuracy and does not purport to be
 complete.   This information is not intended to be used as the primary basis
 of investment decisions.  Because of individual client requirements, it should
 not be construed as advice designed to meet the particular investment needs of
 any investor.  It is not a representation by us or an offer or the
 solicitation of an offer to sell or buy any security.  Further, a security
 described in this release may not be eligible for solicitation in the states
 in which the client resides.  U.S. Bancorp Piper Jaffray individual officers,
 employees, or members of their families may own securities mentioned and may
 purchase or sell those securities in the open market or otherwise.  In the
 United Kingdom, this report may only be distributed or passed on to persons of
 the kind described in Article 11 (3) of the Financial Services Act of 1986
 (Investment Advertisements) (Exemptions) Order 1996 (as amended by the
 Financial Services Act 1986 Investment Advertisements) (Exemptions Order
 1997). Securities products and services offered through U.S. Bancorp Piper
 Jaffray, Inc., member SIPC and NYSE, Inc., a subsidiary of U.S. Bancorp.
 
     Nondeposit investment products are not insured by the FDIC, are not
 deposits or other obligations of or guaranteed by U.S. Bank National
 Association or its affiliates, and involve investment risks, including
 possible loss of the principal amount invested.  Securities products and
 services are offered through U.S. Bancorp Piper Jaffray Inc., member SIPC and
 NYSE, Inc., a subsidiary of U.S. Bancorp.   (5/99-0679)
 
 

SOURCE U.S. Bancorp Piper Jaffray Inc.
    MINNEAPOLIS, April 11 /PRNewswire/ -- U.S. Bancorp Piper Jaffray Senior
 Softlines Retail Analyst Jeff Klinefelter today released data from a
 proprietary research survey regarding the spending habits and brand perception
 of high school students.  A total of 293 students participated in the national
 study, with an average age of 17.3 years and a gender balance of approximately
 47 percent female and 53 percent male.  As part of the study, Klinefelter
 visited nine high schools in nine cities covering the entire United States.
 Klinefelter began each visit by explaining to students what a Wall Street
 research analyst does, how he conducts research and how he determines ratings
 and price targets for certain retail companies.  Students then had a chance to
 put those research skills to practice by going to the mall and conducting
 their own research.
     Before they went to the mall, Klinefelter surveyed the participants to
 determine their favorite places to shop.  Based on those responses, the Gap
 was found to be the most frequent overall destination for shopping followed by
 Abercrombie & Fitch and The Limited's Express unit.  After they visited the
 stores, students were asked to rate the investment potential of each company
 based on Klinefelter's guidelines.  Teens in eight of the cities rated the Gap
 a "Top Hold" while those in one city rated it a "Top Sell."  None rated it a
 "Top Buy."  Abercrombie & Fitch was rated a "Top Buy" in four of the seven
 cities where teens were able to visit an Abercrombie & Fitch store.
 Abercrombie & Fitch was rated a "Top Hold" in two cities and a "Top Sell" in
 one.  Express was also given four "Top Buy" ratings, with one group rating the
 company a "Top Hold."
     "It is clear that the Gap brand remains 'top of mind' with teenage
 consumers, though they may not always like what they find there.  We expect
 this to translate to accelerating top line growth for the company once its
 product mix gets back on track with trend-right and differentiated product,"
 said Klinefelter.
 
                                      Top                   Activity
                Channel           Destinations              Frequency/
              Preference (%)          Rank                    Month
     Market Spec. Dept. Disc. 1st  2nd      3rd      Mall Movie Concert Sports
     Total    50% 39% 11%   Gap    ANF     Express  2.5  2.0  1.5 yr.  6.7 yr.
     Portland,
      OR      41% 36% 23%   Gap    AE      ANF      3.6  2.3  3.9 yr. 18.3 yr.
     Denver,
      CO      33% 49% 18%   Hot
                             Topic Mervyn's Express 2.7  2.9  1.7 yr   6.5 yr.
     Des
      Moines,
      IA      48% 52%  0%   AE     Old Navy Gap     2.2  2.5  2.1 yr.  3.4 yr.
     Apple
      Valley,
      MN      54% 42%  4%   ANF    Express  Gap     3.8  2.2  2.7 yr.  4.9 yr.
     Miami,
      FL      31% 55% 14%   Burdines Sears  Macy's  2.6  2.1  1.8 yr.  3.1 yr.
     Charlotte,
      NC      44% 42% 13%   Gap      ANF    Express 4.6  2.0  4.4 yr.  7.1 yr.
     Mahwah,
      NJ      71% 22%  7%   ANF      Gap    Old
                                             Navy   2.4  1.6  2.5 yr. 14.4 yr.
     Malibu,
      CA      49% 37% 15%   Gap      PacSun ANF     1.6  2.6  2.1 yr.  4.5 yr.
     Scottsdale,
      AZ      68% 18% 13%   ANF      Gap    Express 1.8  2.0  3.3 yr.  6.6 yr.
 
     Source:  U.S. Bancorp Piper Jaffray
 
     Klinefelter also had the students fill out a brand perception survey,
 which asked students to rate the prices of stores, whether they think it is a
 fashion follower or a fashion leader and whether they buy products at full
 price, full price and clearance or just clearance only.  "We confirmed our
 prior assumption that teenage consumers rank product pricing nearly as high as
 they do fashion. This is particularly significant considering the dynamic
 pricing environment in the specialty retail sector this year," said
 Klinefelter.
 
                                               Full
                    Price   Fashion   Fashion  Price  Full Price &   Clearance
     Brand       Perception  Leader  Follower  Only    Clearance       Only
     Abercrombie
      & Fitch (#)    3.2      78%       22%     28%       80%           17%
     American
      Eagle (#)      2.4      41%       60%     13%       77%           10%
     Banana
      Republic       3.3      79%       21%     32%       50%           18%
     Old Navy        1.6      21%       79%     15%       73%           12%
     Express         2.7      79%       21%     23%       68%            9%
     Gap (#)         2.4      60%       40%     13%       81%            6%
     Limited (#)     2.6      59%       41%     19%       71%           10%
     Pacific
      Sunwear (#)    2.4      68%       32%     11%       82%            1%
     Structure       2.7      64%       36%     12%       80%            8%
 
     Note:  Price Perception scale:  4 is very expensive, 3 is expensive, 2 is
 average, 1 is inexpensive.
 
     Source:  U.S. Bancorp Piper Jaffray
 
     Klinefelter said that Generation Y, defined generally as the children of
 the baby boomers and between the ages of 10 and 24, is the focus of several
 growth companies in the Softlines industry.  Estimated between 55 million and
 65 million in the United States, the group is growing faster than the overall
 population.  Furthermore, Klinefelter said there are currently more
 five-year-olds than fifteen-year-olds and this trend is expected to continue
 until 2012, which provides a foundation for several years of healthy growth
 for companies focusing on this age group.
     "In terms of spending patterns in the apparel category, the average
 monthly expenditure is $110, with a range of $60 to $149," said Klinefelter
 "The average number of trips-per-month to the mall is 2.5, which is slightly
 lower than the common assumption that teenagers visit the mall once a week.
 Also somewhat surprising were the indications that teenage consumers prefer to
 shop for apparel during the summer season first, the spring season second and
 the back-to-school season third.  We assume this is at least partly due to the
 timing of our survey (March) and possibly the lack of new fashion trends and
 key items during the most recent back-to-school season."
 
 
                                                              Preferred
             Demographics       Shopping Statistics          Time of Year (%)
     Market  Male  Female  Avg. $/Month % own  Trips/mo.  Spring  Summer  BTS*
                           Age             $
     Total      53%  47%   17.3   $110     49%    2.5        35%     42%   23%
     Portland,
      OR        53%  47%   17.1    $76     68%    3.0        24%     59%   18%
     Denver,
      CO        43%  57%   17.1   $149     59%    4.1        31%     59%   10%
     Des
      Moines,
      IA        55%  45%   17.2    $60     56%    2.5        27%     50%   23%
     Apple
      Valley,
      MN        39%  61%   17.3    $94     54%    3.2        44%     25%   32%
     Miami,
      FL        35%  65%   15.6   $129     33%    2.9        11%     63%   26%
     Charlotte,
      NC        54%  46%   17.8   $107     59%    2.8        46%     40%   14%
     Mahwah,
      NJ        71%  29%   17.5   $116     43%    2.0        47%     37%   16%
     Malibu,
      CA        76%  24%   17.7    $88     39%    2.6        18%     48%   34%
     Scottsdale,
      AZ        53%  47%   17.4   $125     65%    3.0        43%     34%   23%
 
     Source:  U.S. Bancorp Piper Jaffray, * Back To School
 
     According to Klinefelter's research, the specialty retail channel is the
 most preferred by teenage consumers for purchasing apparel and accessories.
 However, while 50 percent of survey respondents noted specialty stores as a
 destination, Klinefelter was surprised to find that department stores also
 ranked high with the students.
     "While we believe this is partly due to a narrower offering of specialty
 stores, it could also point to a lasting 'mind share' for department stores,"
 said Klinefelter.  "We also believe the department stores are important in
 urban markets due to the unique assortment of brands, many of which are
 available only in this channel."
     Jeff Klinefelter is a vice president of U.S. Bancorp Piper Jaffray and a
 senior research analyst, focusing on the softlines retail industry.
 Klinefelter joined the Equity Research department in 1997.  Prior to joining
 U.S. Bancorp Piper Jaffray, Klinefelter worked at Universal Asset-Based
 Services, Inc., performing asset evaluations for commercial lending
 institutions.  He also worked for Target Stores Division for six years in
 various merchandising, operations and strategic planning positions, including
 working in Inventory Management for multiple merchandise divisions.
 Klinefelter received a bachelor's degree in economics at St. Olaf College and
 an M.B.A. at the University of Minnesota Carlson School of Management.
     U.S. Bancorp Piper Jaffray, a subsidiary of Minneapolis-based
 U.S. Bancorp (NYSE:   USB), provides a full range of investment products and
 services to businesses, institutions and individuals.  The company's
 investment banking business has grown exponentially in the last several years
 by focusing on the needs of growth companies in the health care, technology,
 financial institutions, consumer and industrial growth sectors.  U.S. Bancorp
 Piper Jaffray has a national reputation for its expertise in fundamental
 research and equity and debt financing.  U.S. Bancorp offers a comprehensive
 range of financial solutions through U.S. Bank, First American Asset
 Management, U.S. Bancorp Investments and its Libra Division and U.S. Bancorp
 Piper Jaffray.  Securities products and services offered through U.S. Bancorp
 Piper Jaffray, Inc., member SIPC and NYSE, Inc., a subsidiary of U.S. Bancorp.
 
     Some or all of the following hedges may apply. (#) U.S. Bancorp Piper
 Jaffray, Inc., makes a market in the company's securities.  (~) A U.S. Bancorp
 Piper Jaffray, Inc., officer, director or other employee is a director and/or
 officer of the company. (@) Within the past three years, U.S. Bancorp Piper
 Jaffray, Inc., was managing underwriter of an offering of, or dealer manager
 of a tender offer for, the company's securities of an affiliate.  Additional
 information is available upon request.  Not FDIC Insured.  No Bank Guarantee.
 May lose value.
 
     This material is based on data obtained from sources we deem to be
 reliable; it is not guaranteed as to accuracy and does not purport to be
 complete.   This information is not intended to be used as the primary basis
 of investment decisions.  Because of individual client requirements, it should
 not be construed as advice designed to meet the particular investment needs of
 any investor.  It is not a representation by us or an offer or the
 solicitation of an offer to sell or buy any security.  Further, a security
 described in this release may not be eligible for solicitation in the states
 in which the client resides.  U.S. Bancorp Piper Jaffray individual officers,
 employees, or members of their families may own securities mentioned and may
 purchase or sell those securities in the open market or otherwise.  In the
 United Kingdom, this report may only be distributed or passed on to persons of
 the kind described in Article 11 (3) of the Financial Services Act of 1986
 (Investment Advertisements) (Exemptions) Order 1996 (as amended by the
 Financial Services Act 1986 Investment Advertisements) (Exemptions Order
 1997). Securities products and services offered through U.S. Bancorp Piper
 Jaffray, Inc., member SIPC and NYSE, Inc., a subsidiary of U.S. Bancorp.
 
     Nondeposit investment products are not insured by the FDIC, are not
 deposits or other obligations of or guaranteed by U.S. Bank National
 Association or its affiliates, and involve investment risks, including
 possible loss of the principal amount invested.  Securities products and
 services are offered through U.S. Bancorp Piper Jaffray Inc., member SIPC and
 NYSE, Inc., a subsidiary of U.S. Bancorp.   (5/99-0679)
 
 SOURCE  U.S. Bancorp Piper Jaffray Inc.

RELATED LINKS

http://www.fbs.com