Teens are growing into luxury market

Models pose as shoppers

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KAI RYSSDAL: The National Retail Federation offered its official forecast for holiday spending today: $923.36 is their best guess as to what each and every one of us will spend on holiday-related items this year. That's up almost 4 percent from last year, although below the rate of increase over the past decade or so.

The high end of the market has been immune to the queasy economy. Adults with disposable income have kept brand-name retailers feeling no pain. But Andrea Gardner tells us the average luxury consumer is getting younger -- much younger.


Andrea Gardner: Ally, Sara and Amanda are talking jeans. Expensive jeans. The 15-year-olds each bought a few pairs for back-to-school. Many of their wealthy classmates wear designer clothing, brands like Marc Jacobs, Chanel, and Tory Burch. Others sling $1,000 handbags over their shoulders like backpacks.

Ally says she knows the brands, thanks to her subscription to Vogue, MTV and clothing blanketed with the obvious.

ALLY: Everything has sort of a logo on it, so you can know exactly what it is. The pockets on jeans. I could -- show me any jeans, and I could tell you, just seeing a stripe or something embroidered or a piece of thread. I can know -- I know what kind of jean it is. It's pathetic, but it's true.

Teens are a growing segment in the multibillion dollar luxury market, and it's not just wealthy kids -- middle-class teens save up or beg their parents for Coach and Juicy Couture. A recent study found that 15 percent of teen purchases are designer goods, a number that continues to climb. Teens are so fashion-obsessed that they connect around certain brands. Girls at Ally's school wear friendship bracelets from Cartier.

Issa Sawabini from the youth marketing firm Fuse says the luxe brands have targeted teen fashionistas with ads that feature young starlets like Lindsay Lohan for Dooney & Bourke and Kiera Knightly for Chanel. They also created more affordable products for the teen budget.

ISSA SAWABINI: The brands really expanded their product offerings. Louis Vuitton started making shoes and keychains, and a variety of other accessories, so you didn't have to spend many thousands of dollars to enter the world of these brands.

Teens typically enter the luxury market with an accessory or a high-end T-shirt. That brought sales to Christian Dior for years, until the designer scaled back low-cost items to preserve its elite status. Marc Jacobs took a different path with his MARC line, now a teen favorite -- it's lower priced than the signature Jacobs collection, though pieces cost much more than Gap jeans and sweaters.

Designer goods or not, parents usually foot the bill for their kids, though shopping analyst Candace Corlett says today's moms have little say in the matter. As a result, more stores are designed for teens with dim lighting and loud music.

Candace Corlett: It used to be you wanted to be sure that mom was comfortable in the store. That doesn't count anymore.

Clothing retailers aren't the only ones tapping into the trend. Some car companies are marketing luxury to teens, with messages telling young buyers that a luxury car is within the realm of possibilities.

Corlett: BMW has a brilliant campaign advocating how smart to drive around in a previously-owned, highly-warrantied BMW. Kids are getting that message.

And whether it's with a car or a keychain, Issa Sawabini from Fuse marketing says luxury brands have much to gain.

Sawabini: They've opened up a whole new marketplace. And now they are able to reach the teen, and the parent -- and of course, they want to create passion and long-term brand loyalty so that these teens grow up with a lifetime commitment to the brand.

In New York, I'm Andrea Gardner for Marketplace.

About the author

Andrea Gardner is a journalism professor and writer in Pasadena, Calif.

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