A few months ago, the biggest problem Abercrombie & Fitch Co. (NYSE:ANF) seemed to have was its CEO Mike Jeffries’ aversion to “fat” or “not-so-cool” kids wearing his company’s clothes.
But on the heels of surprisingly disappointing second-quarter earnings on Thursday, the apparel retailer appears to be facing another a different demographic problem: Not enough kids -- plump or petite, pretty or popular -- to buy its products, an analyst told International Business Times.
Sure, other problems could be to blame. Unseasonably cold weather drove down apparel sales in July. Increased competition from cheaper, fast-fashion outlets like H&M, Zara (MCE:ITX) and Forever 21. A shift in teen values as pubescent consumers spend more on electronics than clothing.
But the steadily declining birth rate in the U.S. means fewer and fewer teenagers sifting through Abercrombie’s piles of perfume- and cologne-steeped sportswear.
“The number of younger teenagers is in decline,” Jessica Bemer, an analyst at Snow Capital Management, told IBTimes. “Certainly there are far more 21-year-olds today than there are 15-year-olds -- that’s clearly an issue for teen retailers.”
Indeed, data released in June by the federal government showed that the U.S. birthrate hit new record lows in 2011. The figure, 3,953,590 births, was down 1 percent from the previous year.
Other teen retailers are feeling the squeeze, too.
Aeropostale Inc. (NYSE:ARO) and American Eagle Outfitters (NYSE:AEO) -- which, with Abercrombie, comprise the so-called “3As” -- suffered losses in the last quarter.
“There will be fewer consumers for the teen retailers going forward,” Bemer said. “[Those brands] may not be as powerful as other retailers.”