Good Investment Retail Stocks: Playing the "Tween" Trend
By Ann Sosnowski
In this article
Not only are “tween” girls buying clothes, but they're buying electronics too.
By partnering with Disney and Nintendo, Tween Brands Inc. is extending its reach into this growing segment of retail.
Tween Brands' stock just rose above its 200-day Moving Average, an extremely bullish signal.
Good Investment Retail Stocks: Playing the “Tween” Trend
Not only has Tween Brands Inc. (TWB:NYSE) profited from the growing trend of increased spending on young girls' apparel, but the chain is recognizing that young girls between the ages of 7 and 14, like young boys, are in tune to technology and electronics.
Tween Brands' electronic sales, including games, phones, CDs and DVDs, was 10% of the company's $884 million in sales during 2006.
Limited Too is TWB's primary storefront that sells these electronics, like cell phones and MP3 players that have become status symbols, even for the younger generation.
Good DVD sales, as well as items stemming from movies like High School Musical, were actualized through a strong marketing relationship with The Walt Disney Company (DIS:NYSE). It's a testament to the purchasing power of the Tween generation when, according to Nielsen SoundScan, the soundtrack to High School Musical was the top-selling CD in 2006 at 3.7 million copies.
With a sequel to the musical coming out later this year, Disney is extremely optimistic and grateful for its deal with Limited Too and Tween Brands Inc.
According to Chris Heatherly, vice president of global electronics for Disney Consumer Products, as cited in a Business First article:
"We are very pleased with the success we are having at Limited Too. The company is every bit as productive for us as mass-market retailers are. But even more than that, they put our products in the context of fashion that speaks directly to the girls we target."
Good Investment Retail Stocks: Girls from Seven to Fourteen Love Electronics
Not only is the partnership with Disney going well, but TWB is reaping the benefits of a marketing agreement with Nintendo (NTDOY.PK).
Limited Too released the more colorful version of Nintendo DS Lite, and sold 4.8 million units of it… as well as 28 million games.
(As a side note, I have a friend with two twin daughters who are now nine. When I went to visit them a month before Christmas, the two girls were cutting pictures out of catalogs making their Christmas list. After a quick perusal of both, I noticed that they both wanted Nintendo DS Lite systems, little portable DVD players, laptops… and oddly enough, a chocolate fountain. It definitely piqued my interest as to what these young girls would do with all this technology that I don't even use.)
A quick run through of the Limited Too Web site shows you that TWB really isn't joking when it comes to marketing electronics to girls… and of course, their parents who will foot the bill. Under “girl stuff” (in my day usually reserved for cheap cosmetics and headbands) there is a plethora of electronic devices: from the Nintendogs Interactive Pups to a micro digital camera (pink, of course), to pink MP3 players and iDogs and iCats that you hook up to your iPod to make it dance to music.
Tween Brands' Web site also persuades you that the days of hand-me-down clothes are out the window. It's now ok for parents to spend $30 on a short-sleeve shirt that said daughter will grow out of by the next “back-to-school” shopping trip, and will of course have to be replaced with another $30 shirt, and so on.
The parents are buying it, and the girls are more than happy to accept it.
Good Investment Retail Stocks: TWB is Up 2.67% Since Gaining Support
I still remain extremely bullish on our free recommendation of Tween Brands Inc. (TWB:NYSE). In fact, since we purchased it in mid-April, only 12 days ago, we're already up 2.67% on the position.
The company reports its earnings on May 23, so make sure to put that on your calendars.
Good for us, the stock just breezed past its 200-day Moving Average and is seeing strong support from its 10-day Moving Average.
Compared to its closest competitor, Gymboree Corp. (GYMB:NASDAQ) which is down below its 200-day Moving Average and has lost 28% since late 2006, we're golden with this position.
Continue to hold your shares of Tween Brands Inc. (TWB:NYSE).
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Ann Sosnowski is a small and mid-cap stock analyst for Taipan Financial News. She is the editor of Diligent Investor, a monthly newsletter that balances conservative and moderately risky investments that pertain to current market trends. She is also the editor of Diligent Investor Micro-Cap Hot Sheet, a monthly newsletter that finds the hottest penny and micro-cap stocks on the market.
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Related Resources
Good Investment Retail Stocks: Tween Brands' Official Website
Good Investment Retail Stocks: Shop Limited Too
Good Investment Retail Stocks: Tween Riding Tech Wave to Higher Sales - Business First