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Catalogs Court Shop-Till-You-Drop Teenagers

When the new Delia’s catalog arrives in the mail, Anna Forward commandeers a telephone and rushes to compare notes with classmates on the newest dresses, swimsuits and accessories.

“They tell me what they like and I tell them what I like,” says the 14-year-old Mar Vista resident. “And then we decide what we’re going to get.”

The middle school student’s virtual shopping trip--and the peer pressure that helps to drive it--is music to the ears of executives at 2-year-old Delia’s Inc., the New York City-based company that has drawn $45 million in two public stock offerings.

Delia’s, which is on track to do $60 million in annual sales, plans to mail 20 million of its seasonal catalogs this year. And, with an average of 7,000 daily shipments, Delia’s is the clear leader in the fledgling teen catalog business. But Delia’s success is spawning competitors.

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More than half a dozen catalog operators have surfaced in recent months to court young females, who in the past have been dismissed as fickle shoppers with little appetite for the printed word and even less patience for doing business by mail.

Most of the companies are start-ups, but retail chain operator Wet Seal is entering the game, as is Fulcrum Direct, an established children’s apparel catalog company.

The swell of new catalogs is being driven by demographics.

After hitting bottom five years ago, the teen population is now growing at twice the rate of the overall population--a trend that will continue for the next decade. And that has direct marketers seeing green.

“At the end of the day, the [teen] catalog business could easily approach the billion-dollar mark,” said James Palczynski, a New York-based retail industry analyst with Ladenberg, Thalmann. “There’s lots of room for growth.”

There are formidable speed bumps along the way.

The upscale young teens being lured by catalog operators remain tied to mom and dad’s credit cards. That gives parents the ability to squelch orders that are too expensive or risque.

Kate Forward regularly advises her daughter to wait a few days before ordering--a move that’s designed to let passions cool.

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“I have mixed feelings about catalogs,” Kate Forward said. “Invariably, you’re going to have to send things back because they’re the wrong size or color--and that costs money. And these clothes aren’t always the cheapest.”

But the toughest challenge could be keeping pace with teen fashions, which change as fast as MTV cycles through rock videos.

Operators who misjudge colors or styles will end up with mountains of suddenly unfashionable apparel. And there’s a real risk of being swamped with costly returned merchandise from teens whose shopping habits have been shaped by trips to the local mall.

“The retail world is littered with the remains of bankrupt firms that died while chasing teenagers’ fashion whims,” said Alan G. Millstein, editor of a New York-based fashion industry newsletter. “Junior women’s apparel remains some of the most treacherous ground in U.S. retailing.”

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And, Millstein cautions, when it comes to the printed page, “the publishing industry doesn’t have an enviable track record with these kids.”

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These material girls do like to spend.

Girls between the ages of 10 and 12 spend just $2.60 per week on clothing, according to the New York-based Rand Youth Poll. But their older sisters--using a powerful combination of allowances, part-time jobs, birthday cash and easy access to mom’s or dad’s credit cards--drop an average of $28.95 per week on apparel and accessories.

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The International Council of Shopping Centers reports that teens of both sexes spend an average of $38.55 per mall visit--not far behind the consumer average of $59.20 for all shoppers. And catalog operators sense that if they can catch teens during their formative years, there’s no reason they can’t hold on to them as they move into their 20s and beyond.

“These girls are intelligent, sophisticated shoppers, and they have a lot more money than anyone realized five years ago,” said Delia Chief Financial Officer Evan Guillemin. “It’s a huge potential market, and the amount of disposable income is growing with each minimum wage hike.”

Yet despite their spending power, teenage girls have been a missing link in the $80-billion catalog industry.

Some teen-oriented catalogs are sticking with private-label merchandise. But others are loading up their pages with hot labels like Girlstar, 26 Red Sugar and Free People from Urban Outfitters.

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Delia’s hires models who have made their mark in fashionable magazines like Seventeen. Each of the catalogs incorporates bold graphics and designs--like Delia’s KiCkY hEaDlInE sTyLe. And the books are filled with beauty tips and, increasingly, paid advertising for apparel and accessories.

The mix is designed to ignite peer pressure, the powerful force that powers the look-alike teen apparel market. Parents say the catalogs have teens talking.

“It was a crisis when Anna’s friends got a recent catalog before she did,” said Kate Forward. “She’s not what I’d call a clotheshorse, but when the catalog didn’t get here in the mail, she went into crisis mode.”

As for budding consumer Anna Forward? She offers an observation that’s right out of the Direct Marketing Assn.'s handbook.

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“Sometimes you don’t have lots of time to go shopping. It’s easy to look at a catalog and decide what you want, and then have it come to you rather than having to go out and get it.”

Delia’s inroads with teens haven’t gone unnoticed. In recent months, at least half a dozen new catalogs have surfaced or are in the works:

* Rio Rancho, N.M.-based Fulcrum Direct, which last year purchased Walt Disney Co.'s Playclothes line, has moved into the teen market with zoe. The upscale catalog hopes to lure older teens and younger twentysomethings with a top-heavy blend of private-label apparel.

* MoXiegirl filled 76 pages in its August premiere issue. The Manhattan Beach-based newcomer bills itself as a “magalog,” because its ads and editorial content lean heavily upon what teens see in leading magazines.

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* Dramazine, a Laguna Beach-based start-up, is the most risque entry. Its underground nature blends the quirky nature of online ‘zines with fashions from leading designers. Quiksilver Inc. designer Melissa Martinez publishes the stylish catalog in her spare time.

* Wet Seal, the Irvine-based operator of Wet Seal and Contempo Casuals, has announced plans for a catalog that would augment sales at its 300-unit chain.

* Girlfriends LA, a Northridge-based catalog, mirrors the squeaky clean look of Delia’s. It features a six-page section jammed with accessories ranging from temporary tattoo art and body paints to hand-painted designer light bulbs and “frou-frou-scented” pillows.

* Airshop and Alloy, which operate Internet sites, have announced plans to offer print catalogs.

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Apparel manufacturers view catalogs as a double-edged sword.

Quiksilver Inc. Chairman Robert McKnight Jr. is using catalogs to help market the Roxy junior women’s line in areas where the Costa Mesa-based apparel company doesn’t have strong distribution through traditional retail outlets.

But catalogs have a downside, McKnight said: “Some of them won’t turn out to be ‘wholesaler-friendly’ because they’re just using popular brands to build up business so they can then introduce their own private-label brand.”

Catalog operators also have had to struggle to find financing from investors, who’ve often doubted that teens will bother to leaf through pages and manipulate measuring tapes.

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Martinez, who has published three editions of Dramazine in the last year, is now searching for venture capital.

“It’s a struggle, because we’re funding ourselves,” Martinez said.

The founders of Delia’s eventually won private investors over after they began comparing the catalog’s business plan to MTV’s approach to television programming.

“We told them to think of us as a ‘channel’ through which you can program different types of apparel brands,” Guillemin said. “We, like MTV, stay constant . . , but we’ll provide them with a constantly changing assortment of designs and brands.”

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And as far as the fickle reputation of teens?

“If they were less fickle, we’d do a lot less sales,” Guillemin said. “Thank God they constantly change.”

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Catalog Calculations

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The number of females ages 10 to 19 has been growing at twice the rate of the overall population--a trend that will continue until at least 2010, according to Census Bureau statistics. And as teens turn into twenty somethings, catalog operators will try to retain them as customers by offering more mature fashions.

Source: Census Bureau

Researched by Scott Wilson

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Teen Sprees

Given their modest incomes, teenage girls are big spenders, making them a prime target for marketers. Teenagers spend less per shopping trip than older females. But while twentysomethings go shopping about three times a month, teenage girls average about four trips a month.

Who Spends What

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Age % of female Mean expenditure % of overall group shoppers per trip spending* All females $61.98 15-19 10 44.18 7 20-24 10 57.15 9 25-29 9 59.25 9 30-44 30 70.44 34 45-54 17 72.50 20 55-64 11 61.11 11 65+ 13 50.62 11

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* Overall percentage tops 100% due to rounding.

Source: Stillerman Jones & Co., 1997 National Benchmarks of Shopping Patterns.

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