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Luxury goods market thriving on young girls { December 24 2004 }

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What a Girl Wants -- and Gets -- Are Prada Handbags and Dior Sunglasses
Spending by teens and young women is helping to boost the luxury retail market this year.
By Leslie Earnest
Times Staff Writer

December 24, 2004

The pointed toe, sling-back Guccis caught Sormeh Salimpour's eye.

The shoes were tempting, in the same shade of teal as the Gucci bag she got last summer and marked down to just $299.

But the 19-year-old college student couldn't coax her mom into buying them on a recent excursion to Cabazon Outlets in Riverside County, no doubt because her shopping bags already contained Gucci loafers, D&G sneakers by Dolce & Gabbana and D&G tank tops.

Salimpour isn't the only teenager helping the luxury market hum this year. Retail analysts say teen girls and young women are forking over big bucks on showy items like Prada handbags and Jimmy Choo shoes. If they have to scrimp, they'll buy some basics at lower priced stores, such as Target or Forever 21, where a skirt and a top can be had for $35.

And that is putting the squeeze on mid-range retailers that pursue the same group of females, including San Francisco-based Gap Inc. and Limited Brands Inc. in Columbus, Ohio.

"Status and brand recognition has really become the focus," said Jeffrey Klinefelter, an analyst with Piper Jaffray & Co., "versus value and style."

Indeed, girls 13 to 17 shelled out 11% more on luxury items (probably using their parents' money) in the 12 months ended Oct. 31 than in the same period a year earlier, even while their overall spending on clothes, shoes and accessories fell 3%, according to NPD Group, a market research firm.

"That tells me clearly that the young are saying, 'I have to have that designer handbag and expensive pair of shoes,' " said NPD analyst Marshal Cohen.

Young women aged 18 to 24, meanwhile, spent 14% more on luxury goods and 10% more overall than a year earlier.

In some parts of the nation, young shoppers fancy Prada, Cohen said, while in others they're partial to Gucci or Louis Vuitton. Southern California teens seem to appreciate variety.

"I love shopping at Chanel or Dior or Louis Vuitton, just for the accessories, like hairpins or purses," said Salimpour, who owns three Prada purses.

Diana Murray, an 18-year-old with a part-time job in a boutique, put $300 Prada sunglasses on her Christmas list. She said she'd also like a Louis Vuitton handbag, "but I'm not totally asking for that because I use this Fendi bag and it's great."

To acquire such high-priced items, teenage girls often negotiate with their parents, sometimes forgoing other wardrobe staples in exchange for a snazzy accessory or two.

Another tactic that seems to work: promising to share with mother.

"My mom and I definitely share a lot of purses," Salimpour said. "Unfortunately, her shoe size is much smaller than mine."

Eli Portnoy, who has been conducting focus groups with females aged 10 to 21, said that even preteen girls, or "tweens," have developed an awareness of expensive brands "that is a little mind-boggling."

"I can't imagine a 10-year-old having a sense of what a Coach bag costs," said Portnoy, chief brand strategist for Portnoy Group Inc. in Los Angeles, which gathers data for businesses about children's influence on household purchases. "They were frighteningly astute, in my judgment."

The phenomenon was, not surprisingly, particularly prevalent in upper-middle-income communities.

In sessions with parents, Portnoy found that they were uneasy about their children's sophistication but "none of these baby boomer parents want their kids to feel deprived."

"They almost feel they can't say no," he added.

Celebrities are also shaping purchases as they haven't in the past, with well-dressed television shows such as "The O.C." and style sections in magazines like Us Weekly helping youngsters decide what's in.

Whatever the reason for teens' interest in high-rank fashion, the businesses that sell expensive brands are excited about the spending power and influence of young Americans and are putting more advertising in magazines that target teens.

"It is a notable marketing change in the way retailers market and deal with things," Portnoy said.

Retailers know that if they can develop brand loyalty in shoppers early, the "lifetime payoff is tremendous," said Jacqueline Conard, assistant professor of management at Vanderbilt Owen Graduate School of Management in Nashville.

Many of today's savvy young shoppers aren't just interested in status, Conard said. They want quality, value and products that show off their personal style or how they live their lives.

"For younger consumers, their experience with the product is incredibly important," Conard said. "Thus, spending a lot for a special designer purse or a great pair of designer jeans can be rationalized because they will wear them often."

Indeed, Avalon Barrie has become a discerning shopper since moving to Malibu two years ago. In North Carolina, the 17-year-old said, she knew nothing about Prada or Gucci.

But she was quick to adapt. Her first luxury brand purchase (her dad paid half) was a pair of $250 Dior sunglasses. Then, about a year ago, she bought a $500 Chanel bag, another purchase split with her father.

"It's a really nice bag," said Barrie, an aspiring actress who modeled for a few years and saved up some money. "It's worth it."

"At my school pretty much all the girls have Louis Vuitton bags," she added, explaining that although boys also are brand conscious, they're into casual clothes made by Southern California companies, such as Volcom, Vans or Hurley.

The boy fashion trend is just different, she said. "It's not as expensive and as crazy as girls."

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