Spring 2011 - WordPress.com · Spring 2011 We recently completed our 21st semi-annual, proprietary...

Jeffrey P. Klinefelter Senior Research Analyst 612 303-5537 [email protected] Piper Jaffray & Co.

Neely J.N. Tamminga Senior Research Analyst 612 303-1537 [email protected] Piper Jaffray & Co.

Sean P. Naughton, CFA Senior Research Analyst 612 303-6326 [email protected] Piper Jaffray & Co.

Adam F. Engebretson, CFA Research Analyst 612 303-6473 [email protected] Piper Jaffray & Co.

Jennifer Yung Research Associate 612 303-6472 [email protected] Piper Jaffray & Co.

Alex J. Fuhrman Research Analyst 212 284-9315 [email protected] Piper Jaffray & Co.

Jonathan N. Berg Research Analyst 612 303-6426 [email protected] Piper Jaffray & Co.

T A K I NG S TO C K W I TH T E EN S Spring 2011 We recently completed our 21st semi-annual, proprietary Taking Stock With Teens research project through a combination of geographically diverse high school visits as well as an online survey in partnership with DECA. We visited nine states across the country to discuss fashion and spending trends with teens and also surveyed a wider group of teens through an online survey that included respondents from 37 states. In total, we surveyed 4,500 teens about their spending patterns, brand preferences, and media preferences with an average age for total respondents of 16.5 years.

Key Takeaways From The Survey:

Upper-Income Teen Fashion Spending Stable; Sentiment Improving Results from our upper-income respondents reflect relative stability in total dollars and improvement in intent to spend on fashion over the prior two surveys. Overall, spending on fashion is flat sequentially and year-over-year with low- to mid-single-digit gains in the apparel category. For footwear, we note the trend continues higher year-over-year, but did see some mild loss sequentially. In terms of intent to spend, we observed male and female respondents both want to spend more on fashion this year, which is a reversal of prior surveys and we believe reflects improving sentiment with the teen consumer. In particular, 41% of females indicated they were going to spend more on clothes this year than last year – the highest number since Fall 2008. Given the stable spending metrics on fashion, improved sentiment metrics, and under-investment in the category, we believe the upper-income teen demographic is poised to increase spending in 2011. Average-Income Teen Fashion Spending Remains Constrained; Sentiment Stable The average-income teen fashion budget had remained largely unchanged for the prior three surveys; however, our most recent survey did see a 10% drop in fashion budgets. Importantly, we saw continued stabilization in average-income teens’ willingness to spend on fashion; our male respondents were slightly more encouraged than female respondents. Specifically, the number of females indicating they were going to spend less on fashion increased which we believe is indicative of strong results in lower-priced fashions focused on this customer. Overall, we believe the inflation in non-discretionary categories (food and gas) is impacting the amount of money average-income teens have available to spend on fashion categories. Car and food increased 3ppt as a percentage of total budgets for average-income teens in our Spring survey. Risks: A reliance on key management, fashion changes, mall traffic volatility, competition, cost inflation, inventory and markdown risk, access to capital and compliance with debt covenants, and general economic uncertainty.

I N V E S T M E N T R E S E A R C H April 2011

Piper Jaffray does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm mayhave a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making theirinvestment decisions. This report should be read in conjunction with important disclosure information, including an attestation under Regulation Analystcertification, found on pages 117 - 119 of this report or at the following site: http://www.piperjaffray.com/researchdisclosures

http://www.piperjaffray.com/researchdisclosures

TABLE OF CONTENTS

Survey Summary and Valuation Considerations .................................................................. 3 Survey Summary .................................................................................................................. 3 Teen Specialty Retail Valuation ........................................................................................... 6 Taking Stock With Teens Survey Details ............................................................................. 7 Survey Facts and Process ...................................................................................................... 7 Demographics ...................................................................................................................... 8 Student Demographics – All Students .................................................................................. 8 Student Spending Behavior ................................................................................................ 12 Student Spending Behavior – All Students .......................................................................... 12 Macroeconomic Backdrop for Student Spending ............................................................... 14 Student Spending Behavior – By Gender ............................................................................ 19 Student Spending Behavior – Spending Expectations ......................................................... 24 Student Spending Behavior – By Category ......................................................................... 32 Student Spending Behavior – Parent Spending ................................................................... 35 Student Spending Behavior – Timing of Spending .............................................................. 36 Student Spending Behavior – Shopping Frequency ............................................................. 36 Student Spending Behavior – Shopping Channel Preference ............................................... 40 Upper-Income Student Survey – Brand Preferences ............................................................ 44 Clothing Brand Preferences – All Students ......................................................................... 44 Clothing Brand Preferences – By Gender............................................................................ 50 Clothing Brand Preferences – Action Sports & Boardsport Brands .................................... 53 Clothing Brand Preferences – Fast Fashion ........................................................................ 58 Clothing Brand Preferences – Brand Concentration ........................................................... 60 Clothing Brand Preferences – By Geographic Region ......................................................... 60 Footwear Brand Preferences – All Students ........................................................................ 67 Footwear Brand Preferences – By Gender .......................................................................... 70 Footwear Brand Preferences – By Geographic Region ........................................................ 73 Average-Income Student Survey – Brand Preferences ......................................................... 76 Clothing Brand Preferences – All Students ......................................................................... 76 Clothing Brand Preferences – By Gender............................................................................ 80 Clothing Brand Preferences – Action Sports & Boardsport Brands .................................... 83 Footwear Brand Preferences – All Students ........................................................................ 90 Footwear Brand Preferences – By Gender .......................................................................... 92 Athletic Brand Preferences ................................................................................................. 95 Brand Preferences – Athletic Brands – All Students ............................................................ 95 Pop Quiz! Fresh Insights On Fashion .............................................................................. 100 In-Class – Demographic Data .......................................................................................... 100 Fresh Insights on Fashion Perceptions .............................................................................. 100 End of Denim Dominance? Not So. ................................................................................ 102 Trending Down/ Trending Up: We Show-And-Tell the Brands ...................................... 104 Sources of Influence ......................................................................................................... 108 Sources of Influence – All Students .................................................................................. 108 Media Influences – All Students ....................................................................................... 110 Gift Cards and Wish Lists ................................................................................................ 114 Gift Card Redemption Rates – All Students ..................................................................... 114 Wish Lists – All Students ................................................................................................. 114

Important Research Disclosures ....................................................................................... 117

2 | Taking Stock With Teens; Spring 2011 Piper Jaffray Investment Research

April 2011

SURVEY SUMMARY AND VALUATION CONSIDERATIONS

• Our 21st semi-annual Taking Stock With Teens survey included responses from 4,500 teens and we visited nine cities to discuss current spending trends and brand preferences with teens during the months of February and March.

• Our Spring 2011 Taking Stock With Teens survey results continue to reflect stabilization in spending at the upper-income level and potential for a discretionary recovery in fashion as the overall employment picture begins to improve. However, significant discounting, a lack of confidence and higher product costs could create a difficult environment in the second half of the year. We continue to see a preference for “value” at all levels of household income, but believe teens will spend for differentiated and fashion based merchandise.

• Fast Fashion remains a key theme within the teen demographic for upper-income teen females. Our results have shown this category to average about 18% of total female votes over the last 17 surveys with a significant inflection higher since Fall of 2008. Looking only at the last six surveys, the average mindshare has increased to 26.5%. We believe a general recovery is a positive for fashion, but think it will take time for the consumer to walk back up the pricing continuum and as such “Fast Fashion” will remain a prominent portion of the young female budget.

• Inflation in non-discretionary categories like food and gas is reflected in teen attitudes toward fashion spending budgets. Looking at our results for teen budgets, we note car and food increased by 5ppt for upper-income teens and 3ppt for average-income teens. We think the increase in the price of gas and food is impacting the overall allocation of dollars to the fashion category, but believe upper-income teens want to spend more on fashion categories this year.

• Intent to spend improves dramatically with upper-income teens looking to spend more on fashion categories. While it is clear budgets continue to be impacted by higher costs, we believe the intent to spend on fashion is critically important as setting a budget in high school can be difficult for a student to calculate. We note 41% of females responded they plan to spend more on apparel this year than last year – the highest result since Fall 2008. Also, young men want to spend more on shoes this year than last with 29% of respondents indicating they would spend more on footwear this year than last year – 2ppt higher than our Fall 2010 result and 7ppt higher than the Spring 2010 result.

• In terms of channel dynamics, we note upper-income teens continue to be drawn further online for spending with close to 13% of purchases coming from this channel. This is a 2ppt increase sequentially and 3ppt increase from last year – the largest sequential gain in the internet channel since Fall 2007. In terms of average-income teens, we note channels of purchase remain relatively similar with a mild increase in internet sequentially offset by a small decline in specialty and major chains. Overall, upper-income teens purchase slightly more online then average-income teens by 2ppt.

• For the second consecutive survey, we asked teens what brands they no longer wear and observed Gap, Abercrombie & Fitch, Hollister and Aeropostale all prominently at the top of the list. That said, these brands command a significant amount of share within the marketplace, but is difficult to ignore the potential long-term ramifications associated with losing traction with core customers.

• Influences remain consistent with friends dominating with both upper-income and average-income survey respondents followed by the internet. The internet displaced

Survey Summary

Piper Jaffray Investment Research Taking Stock With Teens; Spring 2011 | 3

April 2011

television as the No. 2 influencer with teens in our Fall 2010 survey, and we believe this trend will likely continue as social networking continues to be a major reason people go online.

• Economic data continues to get incrementally better as year-over-year employment growth stays positive and consumers have rebuilt balance sheets. In addition, income growth has outpaced consumption growth in the first two months of 2011 which we believe is a healthy sign for the economy as we look to establish a new long term savings rate and a new base for the economy to begin growing. While employment is typically a lagging indicator for the market, we believe it will be important to sustain the current level of spending.

• In terms of demographics, we note our upper-income teens had an average household income of $84,000, with an average age of 16.5 years old and 39% of whom had jobs (a 3ppt increase from last Fall). For our average-income teens, the average household income was $45,000, with an average age of 16.6 years old and 41% of whom had part-time jobs (a 2ppt increase from last Fall). We note the average number of teens saying they had a job since Spring 2005 for the upper-income demographic is 44% and 49% for the average-income household.

• Nike rules the roost with teens as the top apparel and footwear brand for upper-income teens and narrowly missed a full sweep with average-income teens as well. Top preferred brands within upper-income changed from Action Sports Brands to Nike. In addition, Forever 21 regained its prior position as the No. 2 preferred brand overall while American Eagle held onto the No. 3 rank. We also noticed Polo Ralph Lauren enter the top five for the first time. In terms of brands moving down in the rankings,

Exhibit 1

TAKING STOCK WITH TEENS – SUMMARY CLOTHING BRAND PREFERENCES

TOP CLOTHING BRAND PREFERENCES (UPPER INCOME STUDENT SURVEY)

No. 1 No. 2 No. 3 No. 4 No. 5

Spring 2011 Nike Forever 21 American Eagle Action Sports Brands Polo Ralph Lauren

F all 2010 Action Sports Brands Nike American Eagle Forever 21 Hollister

Spring 2010 Action Sports Brands Forever 21 Nike Hollister American Eagle

F all 2009 Action Sports Brands Forever 21 Hollister Nike American Eagle

Spring 2009 Action Sports Brands Hollister Nike Forever 21 American Eagle

F all 2008 Action Sports Brands Hollister Forever 21 American Eagle A&F

Spring 2008 Hollister Action Sports Brands American Eagle A&F Forever 21

F all 2007 Hollister Action Sports Brands American Eagle A&F Forever 21

Spring 2007 Hollister American Eagle Action Sports Brands A&F Forever 21

TOP CLOTHING BRAND PREFERENCES (AVERAGE INCOME STUDENT SURVEY)

No. 1 No. 2 No. 3 No. 4 No. 5

Spring 2011 American Eagle Nike Forever 21 Action Sports Brands Hollister

F all 2010 American Eagle Hollister Nike Action Sports Brands Aeropostale

Spring 2010 American Eagle Nike Action Sports Brands Hollister Forever 21

F all 2009 Action Sports Brands American Eagle Nike Hollister Forever 21

Spring 2009 American Eagle Action Sports Brands Hollister Nike Forever 21

F all 2008 American Eagle Action Sports Brands Hollister Nike Aeropostale

Spring 2008 American Eagle Action Sports Brands Hollister Nike A&F

F all 2007 American Eagle Hollister Action Sports Brands Nike A&F

Spring 2007 American Eagle Hollister Action Sports Brands A&F Nike

Source: Piper Jaffray & Co.


April 2011

we noticed Hollister fell out of the top five for the first time since Fall of 2002. In addition, Action Sports Brands fell out of the top 3 for the first time since Spring of 2002.

• Average-income teens continue to vote for American Eagle as the No. 1 brand overall, but we note Nike did gain ground moving back into the No. 2 position overall. We also note that Forever 21 moved back into the top five with a strong showing as the No. 3 brand overall for apparel. In terms of declines, we note the Hollister brand gave back the improvement we saw in Fall of 2010 when it registered as the No. 2 brand overall and fell back to the No. 5 brand with average-income teens.

• In footwear, both upper-income and average-income teens continue to rank Nike as the dominant market share winner with 42% and 45%, respectively. Interestingly, UGG Australia moved up two rank points since Fall of 2010 and maintained the same rank year-over-year with upper-income teens suggesting the brand remains strong with the youth demographic.

SL IGHT CHANGE IN METHODOLOGY ( START ING IN FALL ’ 10 )

• In order to more accurately reflect upper-income versus average-income, we decided to cut our data by household income for the zip codes respondents filled out on the survey. This is a slight change from our prior methodology in which we assigned the schools we visited as a proxy for upper-income and on-line only survey the large sample size as a proxy for average-income. We believe analyzing the data by zip code will enable us to get a better geographic representation of the upper-income demographic as it opens up respondents from our larger pool to be included in the survey for upper-income.

• In addition, we supplemented our in-class survey process with a section we are titling Pop Quiz! to provide additional insights into near-term trends on fashion trend.


April 2011

Valuations In Teen Retail Following our Fall 2008 survey, we recalibrated our valuation multiples across the teen retail space, owing to what we were defining as the "new normal" with square footage growth slowing and more moderate same-store sales expectations. Market multiples for many teen retailers had been predicated on square footage growth, a favorable demographic trend, and easy access to credit. This formula dramatically slowed during the recession as credit availability contracted materially and hurt the teen sector. That said, we believe concepts that have an expansion story, merchandise focused on the value price point consumer or have a compelling international growth component can remain at high-teens to low-20s multiples given the lack of investable growth in the industry. Our Spring 2011 survey provides further evidence of a bifurcated recovery with upper-income teens feeling more confident and willing to spend more on fashion, while average-income teens continue to rationalize budgets and are more heavily impacted by inflation in non-discretionary categories. On balance, we think the industry is poised for a modest recovery but one that takes longer and is more calculated than prior cycles. Until a defined fashion trend (likely bottoms-driven) catalyst is identified (e.g., non-denim?), replenishment in the category will be tied to micro-trends, placing more pressure on merchants to correctly edit trend assortments. In terms of stocks within the teen space, share prices on average are only 42% of their previous peaks, which we believe allows for potential accretion in the space if employment trends continue to improve and concepts continue to resonate with the core customer. Risks to our medium-term recovery thesis include rising unemployment and savings rates, which limit spending capacity; potential changes in taxation laws, affecting upper-income household purchasing power; lack of a fashion catalyst; and input costs.

Teen Specialty Retail Valuation


April 2011

TAKING STOCK WITH TEENS SURVEY DETAILS

Survey Facts

• National study of buying behavior and brand preferences based on a sample of 4,500 teens across the United States. Survey results segmented by household income level, gender, category, and respondent type.

• Upper-income student survey included 1,000 students from households with income in the top 25% of U.S. housing units (defined as $70,000/year and greater). Average-income student survey included 3,500 students from households with income below the $70,000 threshold, but slightly above the national average.

• Spring 2011 tour dates: February 22 – March 30, 2011. Survey Process

• Our survey program collects data through two methods: 1) a series of visits to schools across the United States, launched in the Spring of 2001 and 2) an online survey, which has been conducted in partnership with DECA since the Spring of 2005.

• School visits are structured as a half-day workshop which includes a classroom presentation reviewing market research and the role of a securities analyst; in-class and electronic surveys addressing shopping behavior and brand preferences; a mall field trip including in-store surveys focused on fact-finding principles such as pricing, merchandise presentation, and competition.

• The online survey in partnership with DECA is open to students in all 50 states, Canada, and U.S. Virgin Islands during the month of March.

• Data from both sources is combined and then sorted by income level by cross referencing student-provided zip codes and Census Bureau data.

• Students from zip codes with an average income of $70,000/year and greater are included in our upper-income student survey while all others are included in the average-income student survey.

Survey Facts and Process


April 2011

DEMOGRAPHICS

• We surveyed a total of approximately 4,500 students across our Upper-Income and average-income student surveys.

• We visited nine different classrooms across the nation during the months of February and March 2011. Our survey results include site visits in California, Colorado, Florida, Georgia, Minnesota, Nevada, New York, Texas and Washington.

• Our online survey in partnership with DECA received 4,500 responses from 37 states.

Student Demographics – Upper-Income Student Survey

• We surveyed approximately 1,000 students in our upper-income student survey.

• Results included responses from 22 states.

Exhibit 2

TAKING STOCK WITH TEENS – SURVEY DEMOGRAPHICS

UPPER INCOME STUDENT SURVEY Spring 2011 Fall 2010 Spring 2010 Fall 2009 Spring 2009 Fall 2008 Spring 2008 Fall 2007 Spring 2007 Fall 2006 Spring 2006 Fall 2005

Students Surveyed - Upper Income 1,000 1,200 900 1,200 600 850 670 980 600 1,000 700 700

Gender Breakdow n - Female to Male 45%-55% 45%-55% 48%-52% 44%-56% 46% - 54% 47% - 53% 51% - 49% 49% - 51% 58% - 42% 51% - 49% 55% - 45% 49% - 51%

Average Age 16.5 16.2 16.6 16.3 16.3 16.2 16.4 16.6 16.6 16.4 16.6 16.7

Percentage Of Students Part-Time Employed 39% 36% 39% 38% 35% 44% 45% 45% 43% 50% 46% 52%

Average Household Income $84,000 $88,000 $79,000 $75,000 $73,000 $76,000 $77,000 $71,000 $73,000 $74,000 $72,000 $75,000

AVERAGE INCOME STUDENT SURVEY Spring 2011 Fall 2010 Spring 2010 Fall 2009 Spring 2009 Fall 2008 Spring 2008 Fall 2007 Spring 2007 Fall 2006 Spring 2006 Fall 2005

Students Surveyed - Average Income 3,500 4,800 5,100 10,000 7,500 6,800 4,500 3,300 1,200 3,000 1,200 2,300

Gender Breakdow n - Female to Male 49%-51% 50%-50% 53%-47% 52%-48% 52%-48% 51% - 49% 52% - 48% 54% - 46% 49% - 51% 54% - 46% 53% - 47% 49% - 51%

Average Age 16.6 16.3 16.7 16.2 16.7 16.4 17.1 16.6 16.8 16.3 16.9 16.4




Student Demographics – All Students


April 2011

• Approximately 45% of respondents were female and 55% were male in our upper-income student survey, a similar percentage of females relative to our Fall 2010 survey and slightly lower than our Spring 2010 survey. This balance still represents a lower-than-average percentage of female respondents; the average over the last 14 surveys is 51% females and 49% males.

• The average age of respondents was 16.5 years. This is in line with the 14-survey average age. Based on U.S. birth rate statistics for the years 1992-1997 (today’s 14 through 19 year olds), our sample represents trends among roughly 24 million teenagers.

• We believe that by surveying teens in this targeted age bracket and across two unique household income profiles, we are able to monitor discretionary spending, compare and contrast brand preferences and shopping behavior, and observe purchase patterns during highly formative years for young adults.

• As the teen retail landscape becomes more fragmented in terms of target demographic, reach, and lifestyle, we are able to qualify differences in preference and behavior among respondents from their early teens to late teens.

• In addition, we note the highly discretionary nature of teen ‘budgets’ in which wants often overshadow needs, and social status is dictated by image, involvement, association, and achievements.

Exhibit 3

UPPER- INCOME STUDENT SURVEY – RESPONSE BY STATE

10-20% of total responses



No responses

The Spring 2011 Survey:


Exhibit 4

UPPER- INCOME STUDENT SURVEY – SURVEY DEMOGRAPHICS

UPPER INCOME STUDENT SURVEY Spring 2011 Fall 2010 Spring 2010 Fall 2009 Spring 2009 Fall 2008 Spring 2008 Fall 2007 Spring 2007 Fall 2006 Spring 2006 Fall 2005

Students Surveyed - Upper Income 1,000 1,200 900 1,200 600 850 670 980 600 1,000 700 700

Gender Breakdow n - Female to Male 45%-55% 45%-55% 48%-52% 44%-56% 46% - 54% 47% - 53% 51% - 49% 49% - 51% 58% - 42% 51% - 49% 55% - 45% 49% - 51%

Average Age 16.5 16.2 16.6 16.3 16.3 16.2 16.4 16.6 16.6 16.4 16.6 16.7





April 2011

• In terms of part-time employment, 39% of students in our upper-income student survey held jobs at the time of the survey – even with the prior year and up from 36% in the Fall 2010 season. However, this measure is well below the 14-survey average at 44%.

• When looking specifically at employment by gender, roughly 41% of females and 38% of males were employed at the time of our survey. This compares to Fall 2010 when 38% of females and 35% of males were employed and Spring 2010 when 39% of females and 38% of males were employed.

• The average household income of our upper-income student survey sample was approximately $84,000, higher than the 14-survey average of $75,000. The income level compares to $88,000 in Fall 2010 and $79,000 in Spring 2010.

• We note the average household income of our upper-income student survey group represents roughly the top 25th percentile of average household incomes in the United States, based on zip code analysis. According to the 2000 United States Census, national average household income nears $42,000. We think this population of teen households is responsible for roughly 60% of spending power across teen and youth retailing. Were we to apply a living cost and inflation adjustment to mirror the annual census update, the average household income level of our survey would approximate $108,000.

Student Demographics – Average-Income Student Survey

• We surveyed approximately 3,500 students in our average-income student survey.

• Results included responses from 36 states.

• Among our average-income student survey, approximately 49% of respondents were female and 51% were male, a lower percentage of females relative to our prior seven survey cycles. This balance represents a lower-than-average percentage of female respondents as the 13-survey average balance includes 52% females and 48% males.

Exhibit 5

AVERAGE - INCOME STUDENT SURVEY – RESPONSE BY STATE




No responses

The Spring 2011 Survey:



April 2011

• The average age of respondents was 16.6 years which is in line with the 13-survey average age of 16.6 years. Based on U.S. birth rate statistics for the years 1992-1997 (today’s 14 through 19 year olds), our sample represents trends among roughly 24 million teenagers.

• We believe that by surveying teens in this targeted age bracket and across two unique household income profiles, we are able to monitor discretionary spending, compare and contrast brand preferences and shopping behavior, and observe purchase patterns during highly formative years for young adults.

• As the teen retail landscape becomes more fragmented in terms of target demographic, reach, and lifestyle, we are able to qualify differences in preference and behavior among respondents from their early teens to late teens.

• In addition, we note the highly discretionary nature of teen ‘budgets’ in which wants often overshadow needs and social status is dictated by image, involvement, association, and achievements.

• In terms of part-time employment, 41% of students in our average-income student survey held jobs at the time of the survey, down from 43% in the prior year but up from 39% in the Fall 2010 season. However, this measure is also well below the 13-survey average of 49%.

• When looking specifically at employment by gender, 43% of females and 40% of males were employed at the time of our survey. This compares to Fall 2010 when 41% of females and 37% of males were employed and Spring 2010 when 45% of females and 41% of males were employed.

• The average household income of our average-income student survey sample was approximately $45,000, lower than the 13-survey average of $48,000. The income level compares to $49,000 in the prior year and $45,000 in Fall 2010. Were we to adjust the average household income by a rate commensurate with the annualized Census Bureau cost of living and inflation adjustment, our average-income student survey household income would approximate $58,000, slightly above the average adjusted income nationwide of $54,000.

Exhibit 6

AVERAGE - INCOME STUDENT SURVEY – SURVEY DEMOGRAPHICS

AVERAGE INCOME STUDENT SURVEY Spring 2011 Fall 2010 Spring 2010 Fall 2009 Spring 2009 Fall 2008 Spring 2008 Fall 2007 Spring 2007 Fall 2006 Spring 2006 Fall 2005

Students Surveyed - Average Income 3,500 4,800 5,100 10,000 7,500 6,800 4,500 3,300 1,200 3,000 1,200 2,300

Gender Breakdow n - Female to Male 49%-51% 50%-50% 53%-47% 52%-48% 52%-48% 51% - 49% 52% - 48% 54% - 46% 49% - 51% 54% - 46% 53% - 47% 49% - 51%

Average Age 16.6 16.3 16.7 16.2 16.7 16.4 17.1 16.6 16.8 16.3 16.9 16.4





April 2011

STUDENT SPENDING BEHAVIOR

Our Spring 2011 Taking Stock With Teens survey results continue to reflect stabilization in spending and potential for a discretionary recovery in fashion. However, significant discounting, an unstable employment environment, and inflation in non-discretionary categories remain key themes in budgeting decisions for teens. Our Spring 2011 survey indicates fashion spending by upper-income teens is likely to outperform average-income teen spending. We continue to see a preference for “value” at all levels of household income, but believe teens will spend more for differentiated merchandise. Key Highlights: Student Spending Behavior – Upper-Income Student Survey

• We assess fashion budgets for the teen consumer by looking at spending on the apparel, footwear and accessories categories. Spring 2011 fashion budgets appear to be flat compared to our Fall 2010 and Spring 2010 survey results.

• By gender, female fashion budgets increased 1% sequentially from Fall 2010, but declined 3% from Spring 2010. We believe this continues to reflect lower Average Unit Retail prices in the fashion category, a difficult teen employment situation, and a value-oriented consumer mindset. For males, fashion budgets declined 12% sequentially from Fall 2010 but increased 10% from Spring 2010. This marks a significant improvement from the 3% year-over-year decrease observed in our Fall 2010 results and suggests male spending is now increasing following a bottoming in Spring 2010.

• By category, apparel experienced a 4% increase in spending on a sequential and year-over-year basis. Apparel was the best performing fashion category on a sequential basis. Shoes also increased 4% year-over-year but declined 6% from Fall 2010. Accessories was the weakest category with a 27% year-over-year decline and a 4% sequential decline as both genders have reduced their accessories budgets.

• In terms of sentiment, we believe the upper-income teen is feeling much better about spending. We ask students whether they plan to spend more, less or the same on fashion versus the prior year and this survey showed significant improvement in this metric on both a year-over-year and sequential basis. We note 36% of students indicated they plan to spend more on apparel compared to 34% in Fall 2010 and 33% in Spring 2010. Shoe spending expectations increased even more as 30% of students plan to spend more compared to 26% in Fall 2010 and 22% in Spring 2010. The number of students planning to spend less on shoes dropped to 11%, which is the lowest level since Fall 2005.

• Spending expectations improved for both genders, but improvements were more pronounced for females. This bodes well for fashion spending as female fashion budgets are approximately twice the size of male fashion budgets. The percentage of females expecting to spend more on apparel increased to 41%, up from 38% in Fall 2010 and 34% in Spring 2010. Female shoe spending expectations posted an even larger increase as 31% expect to spend more, up from 26% in Fall 2010 and 23% in Spring 2010. Male spending expectations also posted strong gains as the percentage of students expecting to spend more on apparel increased to 33%, up from 30% in Fall 2010 and 31% in Spring 2010. Expected shoe spending for males also posted increased as 31% expect to spend more compared with 26% in Fall 2010 and 23% in Spring 2010.

• Historically, fashion replenishment cycles have lasted three to five years and have been followed by transition cycles lasting another two to four years. We note that the prior peak in fashion spending was the Spring 2006 survey, or five years ago. While fashion

Student Spending Behavior – All Students


April 2011

cycles clearly are dependent on a favorable economic trend, we have yet to see a dominant apparel fashion trend emerge to drive traffic and conversion.

Key Highlights: Student Spending Behavior – Average-Income Student Survey

• We estimate fashion budgets for the teen consumer by looking at spending on the apparel, footwear and accessories categories. We note Spring 2011 fashion budgets declined 10% on both a sequential and year-over-year basis.

• By gender, female fashion budgets declined 3% sequentially from Fall 2010 and declined 8% from Spring 2010. We believe this continues to reflect lower Average Unit Retail prices in the fashion category, a difficult teen employment situation, and a value-oriented consumer mindset. For males, fashion budgets declined 11% sequentially from Fall 2010 and declined 9% from Spring 2010. These results suggest deterioration from the flat sequential and 1% year-over-over improvement in the Fall 2010. We believe this may be caused by higher food and gas prices which are more likely to impact spending on discretionary categories for the average-income teen.

• By category, apparel declined 11% year-over-year and 13% on a sequential basis. Within apparel, female spending declined less than male spending. Shoes was the strongest fashion category with a 6% year-over-year decline and 1% sequential decline. Female shoe spending increased 2% on a sequential basis but declined 8% year-over-year. Among males, shoe spending declined 6% sequentially and 5% year-over-year.

Exhibit 7

FASHION CYCLE

-15%

-10%

-5%

0%

5%

10%

15%

Mar-92 Sep-93 Mar-95 Sep-96 Mar-98 Sep-99 Mar-01 Sep-02 Mar-04 Sep-05 Mar-07 Sep-08 Mar-10

Average Comp = 1.2%

Grunge Surf & Skate

CargoKhakiCleaned Up Casual

Premium Denim

Fast Fashion

Index Includes: ANF, ANN, AEO, ARO, CACH, CHS, GES, GPS, HOTT, JWN, LTD, NWY, PSUN, TLB, & URBN

Cycle TransitionCycle Transition Cycle Transition

Source: Company Reports, Bureau of Labor Statistics, Piper Jaffray & Co.


April 2011

Accessories was the weakest category as spending declined 13% on a year-over-year and sequential basis.

• In terms of sentiment, we believe average-income teens are feeling lukewarm about spending. We ask students whether they plan to spend more, less or the same on fashion versus the prior year and this survey continued to point to consolidation around the same for the average-income teen consumer. To us, this suggests stabilization for spending and a continued slow grind with the average-income teen consumer. We note there was not as much improvement in sentiment among average-income teens versus upper-income teens.

Key Highlights: Macroeconomic Backdrop – Employment, Savings and Capacity to Spend Economic indicators continue to show year-over-year gains as the discretionary recovery continues at a moderate pace. We believe the economy is gradually improving and corporate balance sheets are healthy enough to hire for growth, although employers have been slow to do so. However, we remain cognizant of the potential impact of rising prices in non-discretionary categories such as gas and food. While personal income growth is improving, further inflation in these categories could affect spending on discretionary categories. Employment We continue to believe the current employment picture domestically remains the biggest challenge to the ongoing economic recovery. The unemployment rate is improving on a year-over-year basis and initial unemployment claims have declined 12% year-over-year to approximately 394,000 per week.

• According to the Bureau of Labor Statistics, there are 7.1 million fewer people employed in March 2011 versus March 2008. Employment levels are showing signs of improvement as total non-farm employment has increased on year-over-year basis for six consecutive months with the first three months of 2011 each posting one million-plus new jobs compared to the year ago period.

• Teen spending continues to be negatively impacted by a teen unemployment near record-high levels. The current 24.5% teen unemployment rate is below last October’s peak of 27.1%, but is still higher than any point between 1983 and 2008 and compares to an average of 15.6% from 1948 to 2008.

• Domestic employers continue to do more with less as productivity continues to show solid gains. Despite strong earnings growth, businesses have not significantly increased headcount.

Below we look at four charts: 1) the rate of change in employment year-over-year relative to the S&P 500, 2) the teen unemployment rate, 3) teen demand for jobs, and 4) improvements in apparel spending after three years of declines. We believe if income growth remains at current levels and apparel keeps its historical relationship with disposable personal income, sales in the category can increase 4-5% in 2011.

Macroeconomic Backdrop for Student Spending


April 2011

Exhibit 8

EMPLOYMENT VERSUS S&P 500

-6%

-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

400

600

800

1,000

1,200

1,400

1,600

1/4

/1993

1/4

/1994

1/4

/1995

1/4

/1996

1/4

/1997

1/4

/1998

1/4

/1999

1/4

/2000

1/4

/2001

1/4

/2002

1/4

/2003

1/4

/2004

1/4

/2005

1/4

/2006

1/4

/2007

1/4

/2008

1/4

/2009

1/4

/2010

1/4

/2011

Em

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ym

en

t C

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ge Y

/Y

S&

P 5

00

S&P500 EMPLOYMENT CHANGE

Source: Baseline, Bureau of Labor Statistics

Exhibit 9

TEEN UNEMPLOYMENT RATE

0

5

10

15

20

25

30

Ja

n-4

8

Ja

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1

Ja

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4

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Ja

n-1

1

TEEN ALL AGES

Source: Bureau of Labor Statistics


April 2011

Exhibit 10

TEEN EMPLOYMENT – BY INCOME LEVEL

41%

76%

39%

71%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Do you have a job? If no, do you want one?

% o

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Average-Income Student Survey Upper-Income Student Survey


Exhibit 11

RETAIL APPAREL/ACCESSORIES SALES

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2006 2007 2008 2009 2010

January 13.3 14.1 14.2 14.6 15.5 16.2 17.4 18.5 18.7 17.3 17.7 18.5 6.2% -0.3% -1.0% 6.6% 4.2%

February 13.6 14.2 14.4 14.2 15.7 16.7 17.4 18.3 18.3 17.7 17.9 18.6 7.1% 1.9% 1.5% 5.0% 3.8%

March 13.9 13.9 14.5 14.5 16.0 16.3 17.4 18.8 18.7 17.0 18.5

April 13.8 14.2 14.4 14.4 15.6 16.8 17.6 18.2 18.6 17.1 18.2

May 14.1 14.0 14.2 14.7 15.7 16.5 17.5 18.6 18.6 17.4 18.1

June 13.9 13.9 14.4 14.9 15.5 16.8 17.6 18.3 18.6 17.2 18.1

July 13.8 14.0 14.2 15.1 15.6 16.5 17.7 18.4 18.5 17.4 18.1

August 14.1 14.2 14.4 15.1 15.6 16.8 17.6 18.3 18.4 17.6 18.1

September 14.4 13.3 14.0 15.2 15.8 16.5 18.3 18.5 17.6 17.6 18.1

October 14.2 14.0 14.6 15.1 16.1 17.2 18.2 18.5 17.3 17.6 18.3

November 14.3 14.0 14.5 15.3 16.0 17.1 17.9 18.7 17.3 17.4 18.6

December 14.1 14.2 14.8 15.5 16.2 17.2 18.4 18.4 16.8 17.4 18.4

Total 167.4 167.8 172.6 178.5 189.2 200.6 213.1 221.7 217.5 208.9 218.3

% Change 0.2% 2.8% 3.4% 6.0% 6.0% 6.2% 4.0% -1.9% -4.0% 4.5%

DPI* 7,327 7,649 8,010 8,378 8,889 9,277 9,916 10,424 10,953 11,035 11,378 11,833

% Change 4.4% 4.7% 4.6% 6.1% 4.4% 6.9% 5.1% 5.1% 0.7% 3.1% 4.0%

% Apparel 2.3% 2.2% 2.2% 2.1% 2.1% 2.2% 2.1% 2.1% 2.0% 1.9% 1.9% 1.9%

Est. apparel $s '11: 228.1

% change from '10 4.5%

*Disposable Personal Income

Represents decelerating and declining investment in apparel

2011 vs. Prior Years

TOTAL RETAIL CLOTHING STORE SALES (SA) VS. PRIOR YEARS

($ BILLIONS)

Source: Census Bureau, Bureau of Economic Analysis, Piper Jaffray & Co.


April 2011

Savings Rate We believe the more elevated levels of the savings rate has been caused by a decline in the value of assets on the consumer balance sheet and a lack of confidence in the economic recovery, specifically with regards to jobs.

• We estimate every 1% increase in the personal savings rate is worth approximately $115 billion in consumer expenditure declines. The current rate of 5.8% is significantly higher than the 3.5% average since January 2000. We estimate a drop in the savings rate to 3.5% would generate $265 billion in incremental consumer spending.

• Not surprisingly, there appears to be an inverse relationship between the Volatility Index (VIX) and consumer’s penchant for savings. For historical perspective, we note the savings rate in the United States has averaged 7.4% over the past 80 years, but has been below this average since 1986.

Capacity to Spend Personal consumption expenditure growth has generally tracked above income growth since mid-2008. However, the spread has narrowed and personal income growth exceeded personal consumption expenditures in January and February 2011. In addition, the personal savings rate remains at elevated levels, suggesting the consumer has the ability to further increase spending but we believe improving levels of confidence are necessary before this trend materializes. We remain encouraged by wage growth and consumers’ ongoing deleveraging, both of which have put money back into consumers’ pockets.

• Personal income less current account transfers has shown year-over-year growth for the last 12 months following 14 months of declines. In January 2011, the year-over-year

Exhibit 12

PERSONAL SAVINGS RATE VERSUS V I X (CBOE VOLAT IL ITY INDEX)

0

10

20

30

40

50

60

70

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

PERSONAL SAVINGS RATE VIX

Stimulus

Source: Bureau of Economic Analysis, Baseline, Piper Jaffray & Co.


April 2011

growth rate accelerated sequentially 140bps to 4.8% and February’s growth rate increased 30bps to 5.1%.

• Access to revolving credit remains limited as the total amount of credit is 7% lower than one year ago. From the peak of credit availability in September 2008, revolving credit has decreased by 18%.

• PCE growth has been tracking above income growth which is similar to other periods with a slowdown in personal income and revolving credit availability. However, in January the relationship reversed suggesting personal income growth could support a higher level of consumption.

• Financial obligation and debt service ratios have declined to levels below historical averages. While not a significant driver of teen spending as teens typically have little debt, we believe the drop bodes well for higher levels of parent contributions to teens’ budgets.

Exhibit 13

PERSONAL INCOME LESS CURRENT TRANSFERS + REVOLVING CREDIT VERSUS PCE CHANGE (YEAR -OVER-YEAR)

-$800

-$600

-$400

-$200

$0

$200

$400

$600

$800

$1,000

-$800

-$600

-$400

-$200

$0

$200

$400

$600

$800

$1,000

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1983-J

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1987-J

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1989-J

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1991-J

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1993-J

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1994-M

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1995-J

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1998-M

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1999-J

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2000-M

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2003-J

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2005-J

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2007-J

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2009-J

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2010-M

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2011-J

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PERSONAL INCOME LESS CURRENT TRANSFERS + REVOLVING PERSONAL CONSUMPTION

Source: Bureau of Economic Analysis, Federal Reserve


April 2011

Total fashion spending trends remain subdued with no change in our upper-income student survey and a 10% decline in our average-income student survey. Fashion spending trends among upper-income females and males outperformed average-income spending on both a sequential and year-over-year basis. Upper-income female spending is beginning to normalize as fashion spending declined 3% year-over-year but improved 1% sequentially. These results are encouraging as upper-income female fashion spending declined 4% sequentially and 20% year-over-year in the Fall 2010 survey. Average-income female spending declined 8% year-over-year and 3% on a sequential basis. Upper-income male fashion spending increased 10% year-over-year but declined 2% sequentially. Average-income male fashion spending declined 11% year-over-year and 9% on a sequential basis. Key Highlights: Upper-Income Student Spending Behavior – By Gender

• By gender, fashion spending remains significantly higher in absolute dollars for females at $1,280 versus $611 for males.

• Female fashion spending declined 3% year-over-year but improved 1% sequentially. Apparel was the top performing fashion category among females as spending increased 5% year-over-year and 3% on a sequential basis. Females reduced footwear spending by 13% sequentially and 9% year-over-year. Spending on accessories by females declined 4% sequentially and 25% year-over-year.

• Male fashion spending increased 10% year-over-year driven by shoes and apparel. Among males, shoes were the top performing category as spending increased 23% year-over-year and 1% on a sequential basis. Apparel followed with an 8% year-over-year increase but declined 1% sequentially. Men’s accessories continued to decline as spending fell 21% year-over-year and 16% from Fall 2010.

• Overall shoes and apparel posted the strongest year-over-year results with an increase of 4%. The relative outperformance of shoes was driven by strength in male spending while apparel spending increased for females and males. We believe increased footwear spending trends in our survey, coupled with strong FQ4 results from footwear brands and retailers, suggests the footwear category can continue to strengthen driven by fashion and technical innovation.

• Accessories were also down year-over-year for both genders with females reporting a 25% decline and males reporting a slightly lower decline of 21%.

• We note that the average household income of our upper-income student survey is approximately $84,000.

• Assuming a total teen population of 24 million (14 to 19 years of age) our survey represents an economic sub-group spending approximately $22 billion annually on fashion products.

Student Spending Behavior – By Gender


April 2011

Exhibit 14

UPPER- INCOME STUDENT SURVEY – FASHION SPENDING, ALL STUDENTS

Fashion Spending Spring-11 Seq Chg Y/Y Chg Fall-10 Seq Chg Y/Y Chg Spring-10 Y/Y Chg Fall-09 Y/Y Chg Spring-09 Y/Y Chg Fall-08 Y/Y Chg Spring-08 Y/Y Chg Fall-07 Y/Y Chg

Apparel $630 4% 4% $608 0% -19% $608 -2% $749 4% $620 -22% $721 1% $795 -21% $715 -20%

Shoes $218 -6% 4% $233 11% 5% $209 -21% $221 2% $263 4% $217 2% $254 -6% $211 -12%

Accessories $85 -9% -27% $93 -20% -17% $116 -14% $113 -9% $135 0% $125 0% $134 -24% $125 -20%

Total - All $933 0% 0% $934 0% -14% $932 -8% $1,083 2% $1,018 -14% $1,062 1% $1,183 -19% $1,052 -18%

Apparel $924 5% 3% $876 -2% -24% $895 -2% $1,154 7% $911 -19% $1,074 7% $1,129 -13% $1,002 -19%

Shoes $221 -13% -9% $253 4% 0% $243 -27% $254 -1% $333 9% $256 1% $305 -3% $253 -9%

Accessories $135 -4% -25% $141 -22% -19% $181 -19% $173 -10% $223 8% $193 3% $206 -12% $188 -10%

Total - Female $1,280 1% -3% $1,270 -4% -20% $1,319 -10% $1,581 4% $1,467 -11% $1,524 6% $1,640 -11% $1,444 -17%

Apparel $354 -1% 8% $358 10% -9% $327 -12% $392 1% $370 -8% $389 -8% $404 -18% $421 -17%

Shoes $216 1% 23% $214 22% 12% $176 -13% $192 7% $202 4% $180 6% $195 2% $169 -17%

Accessories $41 -16% -21% $49 -6% -18% $52 -12% $60 0% $59 17% $60 0% $50 -34% $61 -38%

Total - Male $611 -2% 10% $622 12% -3% $555 -12% $644 2% $631 -3% $629 -3% $649 -15% $651 -19%

Fashion Spending Spring-07 Y/Y Chg Fall-06 Y/Y Chg Spring-06 Y/Y Chg Fall-05 Y/Y Chg Fall-05 Y/Y Chg Spring-05 Y/Y Chg Fall-04 Y/Y Chg Spring-04 Y/Y Chg Fall-03 Y/Y Chg

Apparel $1,007 -1% $888 -1% $1,021 11% $897 -2% $897 -2% $922 1% $920 12% $914 13% $821 12%

Shoes $270 -5% $241 -6% $285 13% $256 34% $256 34% $253 14% $191 -2% $222 -13% $195 -14%

Accessories $177 -21% $156 -20% $225 -6% $195 -20% $195 -20% $240 -16% $242 -3% $287 64% $250 39%

Total - All $1,454 -5% $1,285 -5% $1,531 8% $1,348 0% $1,348 0% $1,415 -1% $1,353 7% $1,423 14% $1,267 11%

Apparel $1,297 -4% $1,243 0% $1,355 18% $1,247 3% $1,247 3% $1,150 1% $1,205 64% $1,137 10% $735 -19%

Shoes $316 5% $277 -7% $302 9% $297 33% $297 33% $277 11% $223 64% $249 -18% $136 -45%

Accessories $234 -25% $210 -24% $312 14% $277 -5% $277 -5% $274 -14% $293 40% $320 44% $210 10%

Total - Female $1,847 -6% $1,730 -5% $1,969 16% $1,821 6% $1,821 6% $1,701 0% $1,721 59% $1,706 9% $1,081 -19%

Apparel $495 -13% $507 -12% $572 4% $573 16% $573 16% $549 -9% $492 -48% $606 12% $945 81%

Shoes $191 -28% $202 -7% $263 22% $218 51% $218 51% $215 16% $144 -49% $185 -7% $281 39%

Accessories $76 -29% $98 -18% $107 -42% $119 -28% $119 -28% $184 -24% $166 -46% $241 106% $308 86%

Total - Male $762 -19% $807 -11% $942 -1% $910 13% $910 13% $948 -8% $802 -48% $1,032 21% $1,534 72%


Exhibit 15


$1,285

$1,468

$1,562

$1,139

$1,244$1,267

$1,423

$1,353

$1,415

$1,348

$1,531

$1,285

$1,454

$1,052

$1,183

$1,062$1,018

$1,083

$932 $934 $933

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

Spring 2001

Fall 2001

Spring 2002

Fall 2002

Spring 2003

Fall 2003

Spring 2004

Fall 2004

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011



April 2011

Exhibit 16


$1,285

$1,468

$1,562

$1,139

$1,244$1,267

$1,423

$1,353

$1,415

$1,348

$1,531

$1,285

$1,454

$1,052

$1,183

$1,062$1,018

$1,083

$932

$934

$933

$1,476

$1,716

$1,458

$1,342

$1,561

$1,081

$1,706

$1,721 $1,701

$1,821

$1,969

$1,730

$1,847

$1,444

$1,640

$1,524$1,467

$1,581

$1,319$1,270

$1,280

$1,116

$1,152

$1,661

$890

$856

$1,534

$1,032

$802

$948$910

$942

$807$762

$651 $649 $629 $631 $644

$555

$622

$611

$500

$700

$900

$1,100

$1,300

$1,500

$1,700

$1,900

Spring 2001

Fall 2001

Spring 2002

Fall 2002

Spring 2003

Fall 2003

Spring 2004

Fall 2004

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Average Spending - All Students Average Spending - Female Average Spending - Male



April 2011

Key Highlights: Average-Income Student Spending Behavior – By Gender

• By gender, fashion spending remains significantly higher in absolute dollars for females at $1,057 versus $735 for males.

• Average-income female spending declined 8% year-over-year and 3% on a sequential basis. Accessories was the top performing fashion category among females as spending declined 7% year-over-year but increased 3% on a sequential basis. Female footwear spending declined 8% year-over-year but increased 2% sequentially. Apparel spending declined 8% year-over-year and 6% sequentially and was the worst performing category among average-income females.

• Male fashion spending declined 9% year-over-year and 11% on a sequential basis. Among males, shoes were the top performing category as spending declined 5% year-over-year and 6% on a sequential basis. Apparel followed with a 9% year-over-year decline and 11% sequential decline. Men’s accessories continued to decline as spending fell 17% year-over-year and 27% from Fall 2010.

• On a combined basis, shoes posted the strongest results with a decline of 6% year-over-year and 1% sequentially. We believe increased footwear spending trends in our survey, coupled with strong FQ4 results from footwear brands and retailers, suggests the footwear category can continue to strengthen driven by fashion and technical innovation.

• Accessories were also down year-over-year for both genders with females reporting a 7% decline and males reporting a decline of 17%.

• We note that the average household income of our average-income student survey is approximately $45,000.

• Assuming a total teen population of 24 million (14 to 19 years of age) our survey represents an economic sub-group spending approximately $22 billion annually on fashion products.

Exhibit 17

AVERAGE - INCOME STUDENT SURVEY – FASHION SPENDING, ALL STUDENTS

Avg. Income Fashion Spending Spring-11 Seq Chg Y/Y Chg Fall-10 Seq Chg Y/Y Chg Spring-10 Seq Chg Y/Y Chg Fall-09 Seq Chg Y/Y Chg Spring-09 Seq Chg Y/Y Chg Fall-08 Seq Chg Y/Y Chg

Apparel $560 -13% -11% $640 2% 4% $626 1% 9% $617 7% 6% $576 -1% -15% $582 -15% -10%

Shoes $239 -1% -6% $241 -6% 0% $255 6% -2% $241 -7% -10% $260 -3% -10% $268 -7% 4%

Accessories $103 -13% -13% $119 0% -12% $119 -12% -10% $135 2% 3% $132 1% -6% $131 -7% -10%

Total - All Students $902 -10% -10% $999 0% 1% $1,000 1% 3% $993 3% 1% $968 -1% -13% $980 -12% -7%

Apparel $689 -6% -8% $733 -2% 3% $752 6% 5% $709 -1% -2% $719 -1% -16% $725 -15% -12%

Shoes $233 2% -8% $229 -10% -1% $253 10% -5% $231 -14% -16% $268 -2% -13% $275 -11% 5%

Accessories $134 3% -7% $130 -10% -8% $145 2% -9% $142 -11% -12% $159 -2% -12% $162 -10% -9%

Total - Female $1,057 -3% -8% $1,093 -5% 1% $1,150 6% 0% $1,082 -6% -7% $1,146 -1% -14% $1,162 -13% -8%

Apparel $419 -11% -9% $471 2% 5% $461 2% 13% $450 10% 6% $408 -4% -14% $425 -10% -6%

Shoes $245 -6% -5% $262 2% 0% $257 -1% 3% $260 4% 0% $251 -3% -5% $260 -2% 3%

Accessories $71 -27% -17% $97 14% -21% $85 -31% -15% $123 23% 27% $100 3% 9% $97 6% -10%

Total - Male $735 -11% -9% $830 3% 0% $804 -4% 6% $834 10% 7% $759 -3% -9% $782 -6% -3%

Spring-08 Seq Chg Y/Y Chg Fall-07 Seq Chg Y/Y Chg Spring-07 Seq Chg Y/Y Chg Fall-06 Seq Chg Y/Y Chg Spring-06 Seq Chg Y/Y Chg Fall-05 Seq Chg Spring-05

Apparel $681 5% 2% $649 -3% -1% $667 2% -2% $654 -3% 7% $677 11% -2% $610 -12% $692

Shoes $288 13% 20% $256 6% -1% $241 -7% -7% $259 0% 15% $259 15% 21% $225 5% $214

Accessories $140 -4% 0% $145 4% 1% $140 -3% -29% $144 -27% -6% $197 29% 42% $153 10% $139

Total - All Students $1,109 6% 6% $1,051 0% -1% $1,047 -1% -8% $1,057 -7% 7% $1,133 15% 8% $988 -5% $1,045

Apparel $852 4% -3% $822 -7% 0% $881 7% 5% $822 -2% 5% $842 8% -1% $781 -8% $849

Shoes $308 18% 15% $260 -3% -3% $268 -1% -4% $269 -3% 13% $278 16% 19% $239 2% $234

Accessories $180 1% -13% $179 -13% -1% $206 14% -3% $181 -15% -9% $213 7% 25% $199 16% $171

Total - Female $1,340 6% -1% $1,260 -7% -1% $1,355 6% 2% $1,273 -5% 4% $1,333 9% 6% $1,219 -3% $1,254

Apparel $474 5% 7% $450 2% -5% $442 -1% -7% $445 -6% 3% $475 10% -2% $432 -11% $487

Shoes $265 5% 24% $251 18% 7% $213 -14% -9% $247 5% 18% $235 12% 25% $209 11% $188

Accessories $92 -15% 29% $107 51% -39% $71 -27% -60% $97 -45% -7% $177 69% 82% $105 8% $97

Total - Male $830 3% 14% $809 11% -9% $726 -8% -18% $789 -11% 6% $887 19% 15% $746 -3% $772



April 2011

Exhibit 18


$1,045

$988

$1,133

$1,057 $1,047 $1,051

$1,109

$980$968

$994 $1,000 $999

$902

$700

$800

$900

$1,000

$1,100

$1,200

$1,300

Spring 2005 Fall 2005 Spring 2006 Fall 2006 Spring 2007 Fall 2007 Spring 2008 Fall 2008 Spring 2009 Fall 2009 Spring 2010 Fall 2010 Spring 2011


Exhibit 19


$1,045

$988

$1,133

$1,057

$1,047$1,051

$1,109

$980

$968$994 $1,000 $999 $902

$1,254$1,219

$1,333

$1,273

$1,355

$1,260

$1,340

$1,162$1,146

$1,081

$1,150$1,093

$1,057

$772 $746

$887

$789

$726

$809$830

$782

$759$834

$803$830 $735

$500

$700

$900

$1,100

$1,300

$1,500

Spring 2005 Fall 2005 Spring 2006 Fall 2006 Spring 2007 Fall 2007 Spring 2008 Fall 2008 Spring 2009 Fall 2009 Spring 2010 Fall 2010 Spring 2011

Average Spending - All Students Average Spending - Female Average Spending - Male



April 2011

In order to test perception versus reality, we also ask the teens in our survey to indicate whether they are spending more, the same, or less on the fashion categories. Key Highlights: Upper-Income Student Spending Behavior – Spending Expectations

• As is normally the case, our measure of spending “expectations” is more optimistic than our changes in year-over-year fashion budgets.

• Improvements in spending expectations were most notable for female shoes and apparel, and male shoes.

• In our upper-income student survey, female shoe intent-to-spend saw the biggest improvement as the percentage of students planning to spend more increased to 31% compared to 26% in the Fall and 23% last Spring.

• Intent-to-spend improvement was also notable in the apparel category for females as 41% plan to spend more on the category this year versus 38% in the Fall and 34% last Spring. We note this is the highest level since Fall 2008. 14% of females said they would spend less on clothing, which is slightly higher than the 11% in Fall 2010, but remains below the 15-17% range from Fall 2008 to Spring 2010.

• Female accessories intent-to-spend also improved as 29% expect to spend more versus 26% in the previous two surveys.

• Among males in our upper-income student survey, shoe intent-to-spend improved substantially. The percentage of respondents planning to spend more increased to 29% compared to 27% in the Fall and 22% last Spring. In addition, the percentage expecting to spend less fell to 9%, which is the lowest level since Spring 2004.

• Male clothing spending expectations also showed improvements as 33% expect to spend more versus 30% in the Fall and 31% last Spring. Those expecting to spend less dropped to 8% which the lowest since Fall 2005.

• In aggregate, 30% of all teenage consumers expect to spend more on shoes compared with 26% in the Fall and 22% last Spring. Those expecting to spend less fell to 11%, the lowest level since Fall 2005. 36% of all teenage consumers expect to spend more on clothing compared to 34% in the Fall and 33% last Spring.

• More than half of all teenage consumers (53%) claim to be spending about the same amount of money on clothing, while 59% claim to be spending the same on shoes and 67% expect to spend the same on accessories this year.

Student Spending Behavior – Spending Expectations


April 2011

Exhibit 20

UPPER- INCOME STUDENT SURVEY – CLOTHING SPENDING EXPECTAT IONS , ALL STUDENTS

0%

10%

20%

30%

40%

50%

60%

Spring 2004

Fall 2004

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same


Exhibit 21

UPPER- INCOME STUDENT SURVEY – SHOE SPENDING EXPECTAT IONS , ALL STUDENTS

0%

10%

20%

30%

40%

50%

60%

70%

Spring 2004

Fall 2004

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same



April 2011

Exhibit 22

UPPER- INCOME STUDENT SURVEY – SHOE SPENDING EXPECTAT IONS , FEMALE

0%

10%

20%

30%

40%

50%

60%

70%

Spring 2004

Fall 2004

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same


Exhibit 23

UPPER- INCOME STUDENT SURVEY – CLOTHING SPENDING EXPECTAT IONS , FEMALES

0%

10%

20%

30%

40%

50%

60%

Spring 2004

Fall 2004

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same



April 2011

Exhibit 24

UPPER- INCOME STUDENT SURVEY – SHOE SPENDING EXPECTAT IONS , MALES

0%

10%

20%

30%

40%

50%

60%

70%

80%

Spring 2004

Fall 2004

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same


Exhibit 25

UPPER- INCOME STUDENT SURVEY – CLOTHING SPENDING EXPECTAT IONS , MALES

0%

10%

20%

30%

40%

50%

60%

70%

Spring 2004

Fall 2004

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same



April 2011

Key Highlights: Average-Income Student Spending Behavior – Spending Expectations

• As is normally the case, our measure of spending “expectations” is more optimistic than our changes in year-over-year fashion budgets.

• Spending expectations were largely unchanged and in some cases, worsened in our average-income student survey.

• In our average-income student survey, female intent-to-spend saw no material change as the percentage of students planning to spend more on clothing remained at 38% for the third consecutive survey. The number of females planning to spend less on clothing increased slightly to 15%, up from 13% in the Fall and 14% last Spring. 29% of females plan to spend more on shoes, which is the same as last Fall and a slight decrease from 30% last Spring. Female accessories spending saw a similar decline from 28% planning to spend more last Fall and Spring compared to 27% currently.

• Male clothing intent-to-spend worsened as 31% expect to spend more versus 32% in the Fall and 35% last Spring. Those expecting to spend less dropped to 10%, indicating more average-income males are planning to spend the same amount on clothing.

• Male shoe spending expectations were mixed as 31% are planning to spend more compared to 29% in the Fall and 32% last Spring.

• In aggregate, 30% of all teenage consumers expect to spend more on shoes compared with 29% in the Fall and 31% last Spring. Those expecting to spend less remained at 13%. 35% of all teenage consumers expect to spend more on clothing compared to 35% in the Fall and 36% last Spring.

• More than half of all teenage consumers (53%) claim to be spending about the same amount of money on clothing, while 59% claim to be spending the same on shoes and 65% expect to spend the same on accessories this year.

Exhibit 26

AVERAGE - INCOME STUDENT SURVEY – CLOTHING SPENDING EXPECTAT IONS , ALL STUDENTS

0%

10%

20%

30%

40%

50%

60%

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same



April 2011

Exhibit 27

AVERAGE - INCOME STUDENT SURVEY – SHOE SPENDING EXPECTAT IONS , ALL STUDENTS

0%

10%

20%

30%

40%

50%

60%

70%

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same


Exhibit 28

AVERAGE - INCOME STUDENT SURVEY – ACCESSORIES SPENDING EXPECTAT IONS , ALL STUDENTS

0%

10%

20%

30%

40%

50%

60%

70%

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same



April 2011

Exhibit 29

AVERAGE - INCOME STUDENT SURVEY – CLOTHING SPENDING EXPECTAT IONS , FEMALES

0%

10%

20%

30%

40%

50%

60%

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same


Exhibit 30

AVERAGE - INCOME STUDENT SURVEY – SHOE SPENDING EXPECTAT IONS , FEMALES

0%

10%

20%

30%

40%

50%

60%

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same



April 2011

Exhibit 31

AVERAGE - INCOME STUDENT SURVEY – CLOTHING SPENDING EXPECTAT IONS , MALES

0%

10%

20%

30%

40%

50%

60%

70%

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Less More Same


Exhibit 32

AVERAGE - INCOME STUDENT SURVEY – SHOE SPENDING EXPECTAT IONS , MALES

0%

10%

20%

30%

40%

50%

60%

70%

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

Less More Same



April 2011

Teen consumers continue to spend a significant amount of money on the fashion category as it represents 37%-40% of the total teen budget for Spring 2011. For our upper-income student survey, our Spring 2011 rate of 37% is a decline from 39% in Fall 2010 and Spring 2010. Fashion spending in the average-income student survey was 40%, below 42% in Fall 2010 and 43% in Spring 2010. The impact of inflation in non-discretionary categories such as food and gas was evident with both categories gaining share in both surveys. Key Highlights: Upper-Income Student Spending Behavior – By Category

• Looking back over the past five years, we note the Fashion category has represented between 37% and 44% of the total teen budget and is substantially the largest category, followed by Food at 18% and Car at 11%.

• Females continue to spend more than half of their disposable income on fashion products at 52% of total spending (down from 53% in the Fall and previous Spring) versus a much lower 26% of total budget for males (down from 28% in the Fall and 27% in Spring 2010).

• Food is the second largest category at 18% of total expenditures. Share increased from 16% on a sequential basis and last Spring’s 17%. Males allocate 20% of spending to Food, which is slightly higher than females at 18%.

• Car-related expenditures climbed to 11% of total, an increase from 8% last Fall and 9% last Spring. Following our school visits and conducting teen focus groups, higher gas prices have become an increasing concern and these higher prices likely explain a significant portion of the increase.

• While it is difficult to truly measure the amount of music purchased versus downloaded at no cost by teenage consumers, the Music and Movies (CD/DVD) category maintains a significant share of disposable income. The category represents 8% of the total budget, but is still below the 11% peak in Spring 2009. Spending on the category was 8% of total budget share in the Spring 2010 survey and 9% in Fall 2010.

• The Electronics / Gadgets category represents 7% of total budget share, up from 6% in Spring 2010, but in line with Fall 2010. We believe this slight uptick may be due in part to the buzz over tablet computers and other devices. By gender, Electronics/Gadgets represented 8% of total budget for males and 5% for females in this survey iteration.

• Video Games slipped to 6% versus 7% last Spring but flat with Fall 2010. The Video Game category ranks much higher for males at 10% versus only 1% for females. Among males, share slipped from 14% in Spring 2010 and 11% in Fall 2010.

Student Spending Behavior – By Category


April 2011

Key Highlights: Average-Income Student Spending Behavior – By Category

• Looking back over the past five years, we note the Fashion category has represented between 40% and 44% of the total teen budget and is substantially the largest category, followed by Food at 15% and Car at 12%.

• Females continue to spend half or more of their disposable income on fashion products at 50% of total spending (down from 51% in the Fall and 53% last Spring) versus a much lower 29% of total budget for males (down from 33% in the Fall and 32% in Spring 2010).

• Food is the second largest category at 15% of total expenditures. Share increased from 14% on a sequential and year-over-year basis. Males allocate 16% of spending to Food, which is slightly higher than females at 15%.

• Car-related expenditures climbed to 12%, an increase from 10% last Fall and Spring. Following our school visits and conducting teen focus groups, higher gas prices have become an increasing concern and these higher prices likely explain a significant portion of the increase.

• While it is difficult to truly measure the amount of music purchased versus downloaded at no cost by teenage consumers, the Music and Movies (CD/DVD) category maintains a significant share of disposable income. The category represents 8% of the total budget, compared to 7% in Spring 2010 and 8% in Fall 2010.

• The Electronics / Gadgets category represents 7% of total budget share, which is the same as the previous three surveys. By gender, Electronics/Gadgets represented 9% of total budget for males and 5% for females in this survey iteration.

Exhibit 33

UPPER- INCOME STUDENT SURVEY – SPENDING BY CATEGORY

Spending by Category - All Students Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05 Fall-04 Spring-04 Fall-03 Spring-03

Video games / systems 6% 6% 8% 7% 8% 6% 7% 5% 6% 5% 4% 5% 5% 4% 3% 5% 5%

Music / movies (DVD/CD) 8% 9% 8% 9% 11% 7% 8% 8% 9% 10% 9% 10% 10% 9% 8% 8% 9%

Electronics / gadgets 7% 7% 6% 7% 7% 8% 7% 6% 6% 6% 5% 5% 4% 5% 4% 4% 5%

Clothing 20% 22% 22% 23% 23% 24% 23% 23% 24% 23% 25% 22% 29% 27% 27% 28% 26%

Accessories/personal care/cosmetics 10% 10% 10% 10% 10% 10% 11% 11% 13% 11% 11% 10% 8% 7% 7% 8% 8%

Shoes 7% 8% 7% 9% 8% 7% 7% 8% 7% 7% 7% 6% 8% 7% 8% 7% 8%

Food 18% 16% 17% 14% 14% 15% 15% 15% 15% 15% 16% 15% 16% 16% 18% 15% 15%

Concerts/Movies/Sporting events 6% 7% 5% 6% 5% 6% 6% 7% 5% 6% 5% 7% 5% 7% 7% 7% 7%

Car 11% 8% 9% 8% 7% 10% 10% 10% 8% 10% 10% 12% 10% 12% 12% 12% 12%

Books/magazines 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 3% 3% 3% 3% 3%

Furniture / room accessories 1% 1% 1% 1% 2% 1% 1% 1% 1% 1% 1% 1% 3% 2% NA NA NA

Other 4% 4% 3% 3% 4% 3% 3% 3% 3% 3% 4% 4% 1% 3% 3% 3% 3%

Total Fashion (Clothing, Access & Footwear) 37% 39% 39% 42% 41% 41% 41% 42% 44% 41% 43% 39% 45% 41% 42% 43% 42%

Spending by Category - Female Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05 Fall-04 Spring-04 Fall-03 Spring-03

Video Games / Systems 1% 1% 2% 1% 2% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%

Music / Movies (DVD/CD) 7% 8% 7% 8% 10% 6% 6% 6% 8% 8% 8% 8% 8% 7% 7% 6% 6%


Clothing 29% 30% 30% 31% 30% 32% 31% 31% 32% 32% 32% 30% 35% 36% 35% 38% 34%

Accessories / personal care / cosmetics 16% 16% 16% 16% 16% 16% 16% 17% 17% 17% 16% 17% 11% 10% 10% 11% 11%

Shoes 7% 8% 8% 9% 8% 8% 8% 8% 8% 8% 6% 7% 9% 8% 9% 9% 9%

Food 15% 14% 16% 13% 14% 14% 14% 13% 13% 12% 15% 13% 15% 15% 16% 14% 14%

Concerts/Movies/Sporting Events 6% 6% 5% 6% 5% 5% 5% 6% 5% 6% 5% 6% 5% 6% 6% 6% 7%

Car 9% 7% 8% 7% 4% 8% 9% 9% 7% 8% 8% 9% 9% 10% 9% 9% 10%

Books / magazines 2% 3% 2% 3% 3% 3% 3% 3% 2% 3% 2% 3% 3% 3% 3% 3% 3%


Other 2% 2% 2% 1% 2% 1% 2% 1% 1% 2% 3% 2% 1% 2% 2% 2% 3%


Spending by Category - Male Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05 Fall-04 Spring-04 Fall-03 Spring-03

Video Games / Systems 10% 11% 14% 13% 12% 11% 13% 9% 13% 9% 9% 9% 11% 8% 7% 10% 9%

Music / Movies (DVD/CD) 9% 9% 9% 10% 12% 8% 10% 10% 12% 12% 11% 11% 12% 12% 10% 11% 12%


Clothing 13% 15% 15% 16% 17% 17% 16% 16% 14% 15% 17% 15% 18% 14% 14% 15% 15%

Accessories / personal care / cosmetics 5% 6% 6% 5% 5% 5% 5% 5% 6% 6% 4% 4% 3% 3% 4% 3% 4%

Shoes 7% 7% 7% 8% 9% 7% 6% 7% 6% 6% 7% 5% 7% 5% 6% 5% 6%

Food 20% 18% 18% 16% 15% 15% 16% 17% 16% 17% 17% 16% 18% 17% 21% 18% 17%

Concerts/Movies/Sporting Events 6% 7% 5% 7% 5% 7% 6% 8% 6% 6% 6% 8% 6% 9% 8% 9% 7%

Car 12% 10% 11% 9% 9% 13% 11% 11% 10% 13% 12% 15% 11% 15% 15% 15% 15%

Books / magazines 1% 1% 2% 1% 1% 2% 2% 2% 2% 2% 2% 2% 2% 3% 3% 3% 3%


Other 6% 6% 5% 5% 5% 4% 4% 4% 5% 5% 6% 6% 1% 5% 4% 7% 4%




April 2011

• Video Games remained at 6% for the fifth consecutive survey. The Video Game category ranks much higher for males at 11% versus only 2% for females.

Exhibit 34

AVERAGE - INCOME STUDENT SURVEY – SPENDING BY CATEGORY

Spending by Category - All Students Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05

Video games / systems 6% 6% 6% 6% 6% 5% 6% 5% 6% 5% 5% 5% 4%

Music / movies (DVD/CD) 8% 8% 7% 8% 8% 8% 8% 9% 10% 10% 10% 10% 8%

Electronics / gadgets 7% 7% 7% 7% 6% 6% 6% 6% 6% 6% 5% 5% 4%

Clothing 20% 21% 22% 23% 22% 22% 22% 22% 22% 22% 23% 22% 23%

Accessories/personal care/cosmetics 11% 12% 11% 11% 11% 11% 11% 11% 11% 12% 11% 11% 8%

Shoes 8% 9% 9% 10% 10% 10% 9% 9% 9% 9% 8% 8% 7%

Food 15% 14% 14% 13% 14% 12% 13% 13% 12% 13% 14% 13% 16%

Concerts/Movies/Sporting events 5% 6% 5% 6% 5% 5% 5% 5% 5% 5% 5% 5% 6%

Car 12% 10% 10% 9% 10% 12% 11% 12% 11% 10% 13% 14% 16%

Books/magazines 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%

Furniture / room accessories 2% 2% 2% 2% 2% 2% 2% 2% 1% 2% 1% 1% 2%

Other 4% 3% 4% 4% 4% 4% 4% 4% 5% 4% 4% 4% 5%

Total Fashion (Clothing, Access & Footwear) 40% 42% 43% 44% 43% 43% 42% 42% 41% 43% 42% 41% 38%

Spending by Category - Female Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05

Video Games / Systems 2% 1% 1% 1% 2% 1% 2% 1% 1% 1% 1% 1% 1%

Music / Movies (DVD/CD) 8% 8% 7% 7% 8% 8% 7% 8% 9% 10% 8% 9% 7%


Clothing 26% 26% 28% 28% 27% 28% 28% 27% 28% 27% 30% 30% 29%

Accessories / personal care / cosmetics 17% 16% 16% 16% 16% 15% 16% 16% 16% 16% 17% 17% 11%

Shoes 8% 9% 10% 10% 10% 10% 10% 9% 10% 10% 8% 8% 9%

Food 15% 13% 13% 12% 13% 12% 13% 12% 12% 12% 12% 12% 15%

Concerts/Movies/Sporting Events 5% 5% 5% 5% 5% 5% 5% 5% 4% 5% 5% 5% 5%

Car 10% 9% 9% 8% 8% 10% 9% 10% 9% 9% 11% 10% 14%

Books / magazines 2% 3% 3% 3% 3% 3% 3% 3% 3% 3% 2% 2% 3%


Other 2% 2% 3% 3% 3% 2% 2% 2% 3% 3% 2% 3% 3%


Spending by Category - Male Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05

Video Games / Systems 11% 10% 11% 11% 10% 10% 11% 9% 11% 10% 9% 9% 8%

Music / Movies (DVD/CD) 8% 9% 8% 8% 9% 9% 9% 10% 10% 11% 12% 12% 10%


Clothing 15% 17% 16% 17% 17% 16% 15% 16% 16% 16% 15% 15% 15%

Accessories / personal care / cosmetics 6% 7% 7% 7% 7% 7% 6% 6% 6% 7% 5% 5% 4%

Shoes 8% 10% 9% 10% 10% 10% 9% 9% 8% 9% 7% 7% 5%

Food 16% 15% 15% 13% 14% 13% 13% 14% 13% 14% 16% 15% 17%

Concerts/Movies/Sporting Events 6% 6% 6% 6% 6% 6% 6% 6% 7% 5% 5% 6% 7%

Car 13% 11% 11% 11% 11% 13% 13% 14% 12% 12% 14% 17% 18%

Books / magazines 1% 1% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2%


Other 5% 4% 6% 5% 6% 5% 5% 6% 6% 5% 6% 5% 6%




April 2011

Parent contribution is a key driver of teen spending across apparel, electronics, car, and home furnishings categories for both income groups. As the teen unemployment rate remains near 25%, parent contributions constitute a significant proportion of teen’s spending. Key Highlights: Upper-Income Student Spending Behavior – Parent Spending

• Parent contribution up slightly year-over-year. On average, students in our survey come from families with household income of approximately $84,000 versus the national average of $42,000. As such, we do not find that variable expenses such as gasoline or heating fuel tend to impact the family budget as meaningfully as they do for the average household when it comes to buying apparel and footwear for teens. However, teens continue to expect less contributions from their parents as only 8% expect more money for fashion this year versus 27% expecting less.

• We should also note that this demographic is highly dependent on parent contributions (perhaps in part due to high teen unemployment) as 69% of the teens count on their parents for 50% or more of their fashion budgets. We note 42% of teens rely on parents for 76%-100% of their fashion budget. Non-fashion categories including electronics, car and home furnishings are also primarily funded from parent contributions with 65% of the teens counting on their parents for 50% or more their budget for these categories.

Exhibit 35

STUDENT SPENDING BY CATEGORY – BY INCOME LEVEL

37%

11%

18%

8%6% 6% 7%

4%

2% 1%

40%

12%

15%

8%

5% 6% 7%

4%

2% 2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Fash

ion (clo

thes,

footw

ear,

accessories)

Car

Fo

od

Music

/ m

ovie

s (D

VD

/CD

)

Co

ncerts/M

ovie

s/S

port

ing e

vents

Vid

eo

gam

es

/ syste

ms

Ele

ctr

onic

s / g

ad

gets

Oth

er

Bo

oks/m

agazi

nes

Furn

iture

/ ro

om

acce

sso

ries

Upper Income Students Avg Income Students


Student Spending Behavior – Parent Spending


April 2011

Key Highlights: Average-Income Student Spending Behavior – Parent Spending

• Parent contribution up slightly year-over-year. On average, students in our survey come from families with household income of approximately $45,000 versus the national average of $42,000. As such, we believe variable expenses such as gasoline or heating fuel tend to impact the family budget more meaningfully compared to those surveyed in our upper-income student survey. However, teens continue to expect less contribution from their parents as only 11% expect more money for fashion this year versus 28% expecting less.

• We should also note that this demographic is highly dependent on parent contributions (perhaps in part due to high teen unemployment) as 65% of the teens count on their parents for 50% or more of their fashion budgets. We note 41% of teens rely on parents for 76%-100% of their fashion budget. Non-fashion categories including electronics, car and home furnishings are also primarily funded from parent contributions with 60% of the teens counting on their parents for 50% or more of their budget for these categories.

Key Highlights: Student Spending Behavior for Both Surveys – Timing of Spending

• Teens like to "buy now, wear now;" gift cards and Fast Fashion retailing changing traditional seasonal demand.

• We believe the importance of the holiday season has lessened for the apparel category during the past few years — due in part to the growth of gift cards, which are typically redeemed for new Spring or Spring-transitional product after the holidays, as well as the long period of Back-to-School buying from late Summer through October.

• We also believe the advent of Fast Fashion retailers, those with trend-right, in-season product at value prices, are encouraging more consumers to purchase fashion items throughout a season rather than stocking up at the beginning or waiting for clearance at the end.

• Our upper-income student survey indicates 48% of teen fashion purchases are made during the Spring and Summer seasons (more during the Summer than Spring) and another 33% of purchases are made during the key back-to-school season. Only about 18% of teen fashion purchases are made during the Holiday season.

• Our average-income student survey indicates 48% of teen fashion purchases are made during the Spring and Summer seasons (more during the Summer than Spring) and another 34% of purchases are made during the key back-to-school season. Similar to our upper-income student survey, only about 18% of teen fashion purchases are made during the Holiday season.

Key Highlights: Upper-Income Student Spending Behavior – Shopping Frequency

• Shopping frequency for the fashion category declined on both a year-over-year and sequential basis. Clothing and accessories were each down year-over-year while shoes increased slightly. On a sequential basis, all three categories declined. Females’ shopping frequency declined 6% year-over-year, potentially another sign that the teenage consumer is focusing dollars on value and visiting stores less often.

• We believe this decrease in frequency is likely a reflection of less “newness” in the mall for the fashion category and smaller budgets. We believe teens continue to visit the mall more in response to events such as sales, holidays, and back-to-school.

Student Spending Behavior – Timing of Spending

Student Spending Behavior – Shopping Frequency


April 2011

• On a total basis, teens indicate they are shopping for apparel, accessories/personal care, and footwear approximately 14, 9 and 6 times per year, respectively, versus 15, 9, and 6 times per year last Spring.

• Females continue to shop frequently for the apparel category at 21 times per year, down from 23 times per year in Fall 2010 but even with last Spring. Shoe shopping frequency among females did increase slightly year-over-year to eight times per year.

• Males are shopping for apparel approximately eight times per year, down from nine times per year last Spring, and five times per year for accessories and footwear, both flat from last Spring. However, males are more exhibiting more focus and a higher intent to buy as they reduce their shopping trips.

Exhibit 36

UPPER- INCOME STUDENT SURVEY – SHOPP ING FREQUENCY BY CATEGORY

Shopping Frequency by Category - All Students Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05 Fall-04 Spring-04 Fall-03

Video games / systems 2.5 3.2 3.4 3.4 4.3 3.0 4.1 3.1 2.9 2.9 2.0 2.9 2.5 3.1 1.6 2.8

Music / movies (DVD/CD) 10.4 11.8 11.0 11.5 12.9 6.0 6.4 5.9 6.3 6.0 6.0 7.1 9.6 11.2 5.5 8.9

Electronics / gadgets 4.3 4.8 4.3 4.2 5.5 4.3 4.5 4.2 3.7 4.1 3.8 4.1 3.6 2.9 2.4 5.7

Clothing 13.9 15.1 14.7 17.0 15.5 16.0 18.3 18.5 19.0 18.4 17.6 17.8 20.9 11.7 15.2 19.0

Accessories/personal care/cosmetics 8.8 9.0 9.4 10.3 10.2 8.6 10.7 10.4 12.4 10.5 11.2 10.4 16.3 9.8 13.5 15.0

Shoes 6.3 6.6 6.2 7.1 7.5 6.0 7.1 7.1 7.0 6.3 6.7 6.6 9.2 3.7 7.0 6.6

Food 35.3 36.5 34.9 36.0 34.2 36.6 36.8 38.6 42.4 42.5 42.2 43.1 44.1 41.9 45.1 43.8

Concerts/Movies/Sporting events 9.7 11.8 10.4 11.4 10.8 10.9 10.6 13.4 10.3 10.3 10.1 11.8 9.6 12.5 8.4 12.3

Car 20.9 19.1 24.2 18.0 18.5 20.3 21.2 22.7 21.5 23.0 21.5 26.8 22.6 24.4 28.0 16.4

Books/magazines 3.2 3.8 5.2 4.5 5.2 4.9 4.9 5.1 6.0 5.1 5.9 6.3 6.9 5.1 3.2 6.5

Furniture / room accessories 1.6 1.5 2.0 1.5 2.2 1.5 1.9 1.5 1.8 1.6 1.4 1.5 2.1 1.3 NA NA

Other 6.4 5.2 6.2 6.1 7.4 6.6 5.7 5.0 6.1 6.0 5.4 5.0 4.9 12.4 13.1 26.8

Shopping Frequency by Category - Female Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05 Fall-04 Spring-04 Fall-03

Video Games / Systems 0.7 0.8 0.7 0.9 1.8 0.8 0.9 0.7 0.6 0.7 0.4 0.5 0.5 0.7 0.5 0.5

Music / Movies (DVD/CD) 9.8 10.6 10.2 11.5 10.9 5.4 5.5 4.8 5.0 4.6 5.7 5.7 8.3 11.7 3.0 6.1


Clothing 21.1 22.6 21.3 24.9 21.4 23.3 25.6 26.7 25.4 27.9 23.2 24.9 26.5 21.5 19.9 27.0

Accessories / personal care / cosmetics 14.0 14.2 13.7 16.5 16.2 13.7 16.5 16.7 17.1 16.8 15.7 15.8 21.8 21.4 18.8 21.0

Shoes 8.4 8.5 7.3 9.6 9.4 8.3 9.7 9.8 8.8 8.7 9.0 9.5 11.1 6.0 9.9 9.0

Food 35.2 36.3 36.8 37.0 36.3 37.4 38.2 37.4 43.3 42.7 42.7 44.6 44.9 45.4 42.9 45.0

Concerts/Movies/Sporting Events 9.2 11.8 9.7 10.5 12.1 11.4 10.6 12.8 9.6 9.5 10.2 11.9 8.8 14.2 11.0 12.0

Car 18.8 17.9 23.8 16.6 16.4 17.5 22.3 21.4 21.5 22.2 21.4 24.3 20.8 27.6 26.2 10.4

Books / magazines 4.4 5.1 5.9 6.2 6.5 7.2 6.8 6.9 7.1 7.0 7.5 7.9 8.3 7.2 4.2 7.0


Other 4.0 3.5 5.0 5.2 5.8 4.7 5.5 3.6 5.0 4.5 4.2 3.4 4.7 15.6 6.4 23.6

Shopping Frequency by Category - Male Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05 Fall-04 Spring-04 Fall-03

Video Games / Systems 3.9 5.2 5.8 5.4 6.4 5.0 7.4 5.4 6.2 4.9 4.3 5.1 5.4 4.1 3.3 5.5

Music / Movies (DVD/CD) 10.9 12.8 11.7 11.6 14.5 6.5 7.4 6.9 8.1 7.4 6.5 8.5 11.6 12.1 9.0 11.5


Clothing 8.1 8.9 8.6 10.6 10.5 9.6 10.6 10.5 10.1 9.3 10.2 11.1 11.7 6.2 10.0 7.0

Accessories / personal care / cosmetics 4.5 4.7 5.4 5.2 5.1 4.1 4.5 4.3 5.7 4.5 5.3 5.3 7.3 3.1 8.3 7.5

Shoes 4.6 5.1 5.1 5.0 5.9 4.0 4.4 4.4 4.3 4.1 3.6 3.8 5.8 2.3 2.4 3.0

Food 35.3 36.7 33.1 35.2 32.4 36.0 35.3 39.8 41.2 42.3 41.5 41.7 43.1 38.6 42.9 42.4

Concerts/Movies/Sporting Events 10.2 11.8 11.0 12.1 9.7 10.4 10.5 14.0 11.2 11.1 9.9 11.8 10.8 12.7 7.7 13.5

Car 22.5 20.2 24.6 19.1 20.3 22.8 20.1 24.0 21.6 23.7 21.8 29.2 25.9 27.5 26.2 21.4

Books / magazines 2.3 2.7 4.5 3.2 4.2 2.9 3.0 3.3 4.5 3.4 3.8 4.9 4.4 4.5 3.8 6.0


Other 8.2 6.6 7.4 6.8 8.8 8.3 5.9 6.5 7.7 7.4 7.1 6.6 4.8 13.1 19.0 29.2



April 2011

Key Highlights: Average-Income Student Spending Behavior – Shopping Frequency

• Shopping frequency for the fashion category declined on both a year-over-year and sequential basis. Clothing and shoes were each down year-over-year while accessories were unchanged. On a sequential basis, all three categories declined. Females’ shopping frequency increased 1% year-over-year but declined 3% sequentially.

• We believe this decrease in frequency is likely a reflection of less “newness” in the mall for the fashion category and smaller budgets. We believe teens continue to visit the mall more in response to events such as sales, holidays, and back-to-school.

• On a total basis, teens indicate they are shopping for apparel, accessories/personal care, and footwear approximately 16, 11 and 8 times per year, respectively, versus 18, 11, and 9 times per year last Spring.

Exhibit 37

UPPER- INCOME STUDENT SURVEY – SHOPP ING FREQUENCY BY CATEGORY , BY GENDER

0

5

10

15

20

25

30

35

40

Vid

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syste

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Mu

sic

/ m

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VD

/CD

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Ele

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Clo

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Accesso

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Sh

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Fo

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s/M

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Car

Bo

oks/m

ag

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Fu

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/ ro

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accesso

ries

Oth

er

Female Male



April 2011

• Females continue to shop frequently for the apparel category at 22 times per year, down slightly from 23 times per year in the Fall and last Spring. Shoe shopping frequency among females declined slightly while accessories increased year-over-year.

• Males are shopping for apparel approximately 11 times per year, down from 13 times in the previous two surveys. Shoe shopping frequency fell to six from seven in Fall 2010 and Spring 2010.

Exhibit 38

AVERAGE - INCOME STUDENT SURVEY – SHOPPING FREQUENCY BY CATEGORY

Shopping Frequency by Category - All Students Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05

Video games / systems 3.3 3.3 3.6 3.3 3.6 3.7 4.1 3.6 3.6 3.5 3.6 3.2 2.8

Music / movies (DVD/CD) 9.3 9.6 5.6 6.0 6.3 6.9 6.7 7.3 7.1 7.9 6.8 8.5 10.0

Electronics / gadgets 5.0 5.2 5.1 4.8 5.1 5.4 5.7 5.4 5.6 5.1 4.5 4.1 3.6

Clothing 16.4 17.5 18.3 18.7 18.6 20.3 20.0 20.1 18.6 22.1 17.2 19.1 18.1

Accessories/personal care/cosmetics 11.4 12.0 11.4 11.2 11.6 12.3 12.7 12.8 11.7 13.6 11.7 14.3 15.9

Shoes 7.7 8.4 8.8 8.8 9.5 10.4 9.9 9.6 8.4 10.2 7.9 8.3 7.6

Food 34.0 33.9 34.4 33.5 34.5 35.0 35.9 37.2 41.4 41.7 38.2 40.8 41.6

Concerts/Movies/Sporting events 9.2 11.6 10.2 11.4 10.4 12.0 10.8 12.3 10.5 11.5 8.6 11.4 9.5

Car 23.6 22.6 23.3 21.9 23.0 24.6 24.0 26.6 25.6 24.6 26.3 28.0 30.6

Books/magazines 3.1 3.6 4.4 4.8 5.1 5.3 5.7 6.5 6.1 6.6 5.9 5.3 4.8

Furniture / room accessories 1.8 2.0 2.4 2.3 2.3 2.7 2.5 2.7 2.6 2.9 2.3 2.0 2.2

Other 6.6 6.2 7.1 6.8 7.6 7.4 7.8 8.1 7.1 7.8 6.2 6.9 6.6

Shopping Frequency by Category - Female Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05

Video Games / Systems 1.1 1.0 1.1 1.0 1.4 1.1 1.3 1.2 1.1 1.0 1.0 0.9 0.7

Music / Movies (DVD/CD) 8.8 9.0 5.2 5.7 6.1 6.2 6.0 6.4 6.4 7.3 5.8 7.3 7.9


Clothing 21.8 22.5 23.4 23.7 23.6 25.8 25.5 25.6 24.8 28.1 23.2 26.4 24.0

Accessories / personal care / cosmetics 16.5 17.2 14.9 15.0 15.1 16.6 17.0 17.3 16.9 18.2 16.9 20.3 21.4

Shoes 10.0 10.3 10.6 10.7 11.5 12.8 12.0 11.8 11.1 0.0 9.9 10.9 10.4

Food 35.5 34.7 34.6 33.7 35.1 35.3 36.2 37.8 42.1 42.1 38.7 41.2 42.3

Concerts/Movies/Sporting Events 8.2 11.1 9.6 10.4 9.7 10.6 9.4 11.5 9.3 10.9 8.1 10.6 9.2

Car 23.2 22.1 22.5 21.0 21.4 23.4 22.1 25.4 23.6 23.4 26.1 26.2 29.7

Books / magazines 4.0 4.5 5.3 6.2 6.3 6.6 6.8 8.1 7.4 7.5 6.7 6.1 5.9


Other 5.1 5.3 6.0 5.9 6.4 6.3 6.7 7.3 5.8 6.9 4.9 5.4 5.3

Shopping Frequency by Category - Male Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05

Video Games / Systems 5.3 5.5 6.4 5.7 6.0 6.3 7.2 6.3 6.0 6.5 6.6 5.4 5.5

Music / Movies (DVD/CD) 9.8 10.2 6.1 6.3 6.6 7.7 7.5 8.2 7.7 8.6 8.0 9.6 12.7


Clothing 11.1 12.6 12.5 13.3 13.1 14.6 14.0 13.7 12.6 14.9 10.4 11.9 10.8

Accessories / personal care / cosmetics 6.5 6.9 7.4 7.1 7.7 7.8 8.0 7.6 6.6 8.1 5.9 8.4 9.0

Shoes 5.6 6.5 6.7 6.8 7.3 8.0 7.6 7.2 5.7 0.0 5.5 5.7 4.2

Food 32.6 33.1 34.2 33.3 33.8 34.7 35.6 36.5 40.8 41.2 37.6 40.5 40.7

Concerts/Movies/Sporting Events 10.2 12.1 10.9 12.6 11.2 13.3 12.4 13.3 11.7 12.2 9.1 12.2 9.8

Car 24.0 23.1 24.3 22.9 24.7 25.9 26.1 28.0 27.5 26.0 26.6 29.7 31.7

Books / magazines 2.3 2.6 3.4 3.4 3.7 4.0 4.5 4.7 4.9 5.4 4.9 4.4 3.6


Other 8.1 7.1 8.4 7.7 9.0 8.6 9.0 9.1 8.4 9.0 7.8 8.3 8.2



April 2011

Key Highlights: Upper-Income Student Spending Behavior – Shopping Channel Preference

• Specialty stores continue to be the No. 1 preference for teen consumers at 28% share, but internet and major chains continue to gain share. The specialty channel has been declining steadily from an average of 42% during 2003-2005 due to steady gains in the “value channels” as well as the internet and outlet stores. Specialty store share declined to 28% from 30% in Fall 2010 and 29% in Spring 2010.

• We believe the long-term trend toward a lower share for specialty retail is a function of both the growth of the internet channel and stronger fashion brands and assortments in the discount and outlet channels.

• A “transition” fashion cycle is also likely contributing to the diversification of channel preferences as teenage consumers look to multiple store formats and alternative brands for unique and or value-priced fashion products, given the lack of any dominant bottoms trends.

• We attribute sequential decline in the discount channel and flat share in outlets to more promotional activity at specialty retailers. As prices fall in the mall, the value proposition offered by discount and outlet channels is significantly reduced.

• The internet channel increased to a 13% share which is the highest level in the history of the survey. This is an improvement from 11% in Fall 2010 and 10% in Spring 2010. It is also important to recognize that a substantial portion of internet sales are likely

Exhibit 39

AVERAGE - INCOME STUDENT SURVEY – SHOPPING FREQUENCY BY CATEGORY , BY GENDER

0

5

10

15

20

25

30

35

40

Vid

eo

gam

es /

syste

ms

Mu

sic

/ m

ovie

s (D

VD

/CD

)

Ele

ctr

on

ics /

gad

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Clo

thin

g

Accesso

ries/p

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on

al

care

/co

sm

eti

cs

Sh

oes

Fo

od

Co

ncert

s/M

ovie

s/S

port

ing

even

ts

Car

Bo

oks/m

ag

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es

Fu

rnit

ure

/ ro

om

accesso

ries

Oth

er

Female Male


Student Spending Behavior – Shopping Channel Preference


April 2011

from the web sites of mall-based youth retailers, thus understating the actual specialty store share.

• The internet channel is showing share gains for both genders, although it is much stronger for males at 17% share this Spring and 7% for females. We believe the lower share among young women is due to shopping remaining a mall-based, social event.

Exhibit 40

UPPER- INCOME STUDENT SURVEY – SHOPP ING CHANNEL PREFERENCE

0%

5%

10%

15%

20%

25%

30%

35%

40%S

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Spring-08 Fall-08 Spring-09 Fall-09 Spring-10 Fall-10 Spring-11



April 2011

Key Highlights: Average-Income Student Spending Behavior – Shopping Channel Preference

• Specialty stores continue to be the No. 1 preference for teen consumers at 29% share, a slight decrease on a sequential basis from 30%. The specialty channel has been declining steadily from the high-30%’s level from 2005 due to steady gains in the “value channels” as well as the internet and outlet stores.

• We believe the long-term trend toward a lower share for specialty retail is a function of both the growth of the internet channel and stronger fashion brands and assortments in the discount channel.

• A “transition” fashion cycle is also likely contributing to the diversification of channel preferences as teenage consumers look to multiple store formats and alternative brands for unique and or value-priced fashion products, given the lack of any dominant bottoms trends.

• We attribute year-over-year declines in the discount channel to recent heavy promotional activity at specialty retailers. As prices fall in the mall, the value proposition offered by the discount channel is significantly reduced.

• The internet channel increased slightly to 11% on a sequential basis but was flat year-over-year. The internet channel is much stronger for males at 15% share versus 7% for females. We believe the low share among females is due to shopping remaining a mall-based, social event.

Exhibit 41

UPPER- INCOME STUDENT SURVEY – SHOPP ING CHANNEL PREFERENCE

Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05 Fall-04 Spring-04 Fall-03 Spring-03

Specialty 28% 30% 29% 31% 35% 32% 35% 38% 36% 38% 43% 40% 36% 42% 42% 47% 42%

Major Chain 16% 15% 15% 14% 13% 14% 16% 15% 14% 14% 15% 14% 15% 14% 15% 14% 15%

Department 15% 16% 15% 14% 14% 16% 14% 14% 18% 15% 15% 16% 18% 16% 17% 16% 15%

Discount 15% 15% 17% 15% 14% 16% 16% 14% 15% 14% 12% 13% 14% 12% 12% 10% 12%

Outlet 11% 11% 11% 12% 10% 11% 8% 9% 9% 8% 8% 8% 8% 8% 7% 7% 8%

Mail order 2% 3% 3% 3% 3% 3% 3% 3% 2% 3% 3% 3% 3% 2% 3% 3% 4%

Internet 13% 11% 10% 11% 10% 10% 9% 8% 6% 8% 6% 7% 5% 6% 4% 4% 4%


Specialty 33% 35% 31% 35% 39% 37% 36% 39% 38% 42% 45% 42% 38% 45% 46% 48% 47%

Major Chain 13% 13% 14% 13% 10% 12% 15% 14% 13% 12% 14% 14% 15% 15% 14% 13% 14%

Department 18% 20% 20% 18% 18% 20% 19% 18% 21% 19% 16% 20% 19% 19% 18% 15% 17%

Discount 16% 15% 19% 16% 17% 15% 16% 15% 15% 14% 13% 12% 13% 11% 10% 11% 10%

Outlet 10% 9% 9% 12% 8% 9% 8% 8% 8% 7% 7% 7% 8% 5% 6% 7% 7%

Mail order 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 2% 3%

Internet 7% 6% 5% 5% 6% 5% 5% 4% 4% 4% 3% 3% 3% 3% 3% 4% 2%


Specialty 24% 26% 27% 29% 31% 27% 33% 37% 33% 34% 40% 38% 33% 38% 35% 49% 36%

Major Chain 18% 18% 16% 15% 15% 15% 17% 15% 15% 16% 16% 14% 15% 13% 17% 15% 17%

Department 13% 12% 11% 11% 11% 12% 9% 10% 13% 12% 12% 12% 16% 12% 15% 17% 13%

Discount 14% 15% 15% 15% 13% 16% 15% 13% 15% 13% 11% 13% 14% 16% 12% 8% 13%

Outlet 12% 12% 14% 12% 12% 12% 9% 10% 11% 9% 9% 9% 9% 10% 9% 6% 10%

Mail order 3% 4% 4% 4% 4% 4% 4% 4% 3% 4% 3% 3% 5% 3% 4% 2% 4%

Internet 17% 14% 14% 15% 14% 14% 13% 12% 9% 12% 9% 11% 9% 9% 8% 3% 7%

Shopping Channel Preference - Male

Shopping Channel Preference - All Students

Shopping Channel Preference - Female



April 2011

Exhibit 42

AVERAGE - INCOME STUDENT SURVEY – SHOPPING CHANNEL PREFERENCE

0%

5%

10%

15%

20%

25%

30%

35%

Sp

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Spring-08 Fall-08 Spring-09 Fall-09 Spring-10 Fall-10 Spring-11


Exhibit 43

AVERAGE - INCOME STUDENT SURVEY – SHOPPING CHANNEL PREFERENCE

Spring-11 Fall-10 Spring-10 Fall-09 Spring-09 Fall-08 Spring-08 Fall-07 Spring-07 Fall-06 Spring-06 Fall-05 Spring-05

Specialty 29% 30% 29% 29% 28% 31% 33% 33% 34% 32% 34% 35% 38%

Major Chain 17% 18% 16% 16% 16% 16% 15% 17% 17% 17% 19% 20% 19%

Department 11% 11% 12% 12% 13% 12% 12% 12% 11% 12% 12% 11% 10%

Discount 17% 17% 19% 18% 19% 17% 16% 17% 17% 17% 17% 15% 17%

Outlet 11% 11% 10% 11% 10% 10% 10% 9% 10% 10% 8% 9% 7%

Mail order 3% 3% 4% 4% 4% 4% 4% 4% 4% 4% 3% 4% 3%

Internet 11% 10% 11% 11% 11% 10% 10% 9% 8% 8% 7% 6% 5%


Specialty 31% 31% 31% 32% 30% 34% 35% 34% 36% 34% 37% 37% 39%

Major Chain 17% 18% 16% 16% 16% 16% 15% 17% 17% 17% 19% 20% 19%

Department 12% 13% 13% 13% 14% 13% 14% 13% 13% 13% 13% 13% 11%

Discount 19% 18% 20% 19% 20% 18% 17% 18% 17% 18% 18% 16% 17%

Outlet 11% 10% 10% 10% 10% 9% 9% 9% 9% 9% 7% 8% 7%

Mail order 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%

Internet 7% 7% 8% 7% 7% 7% 6% 6% 5% 6% 4% 4% 4%


Specialty 27% 29% 27% 26% 25% 28% 30% 32% 31% 30% 31% 33% 37%

Major Chain 18% 17% 16% 16% 16% 17% 16% 16% 17% 17% 20% 20% 19%

Department 10% 10% 10% 10% 11% 10% 10% 10% 9% 10% 11% 9% 8%

Discount 15% 15% 17% 17% 18% 16% 15% 15% 17% 17% 16% 15% 17%

Outlet 11% 12% 10% 11% 11% 10% 10% 10% 11% 10% 9% 11% 7%

Mail order 4% 4% 5% 5% 5% 5% 5% 5% 5% 4% 4% 4% 4%

Internet 15% 13% 15% 14% 15% 14% 14% 13% 10% 11% 9% 8% 7%

Average Income Student Survey - All Students

Average Income Student Survey - Female

Average Income Student Survey - Male



April 2011

UPPER- INCOME STUDENT SURVEY – BRAND PREFERENCES

The following exhibits are the results from our upper-income student survey from across the country. We asked the students to list their favorite clothing, footwear, athletic apparel, room furniture, and fragrance brands in order of preference. Students were asked to write responses onto blank lines, rather than choose them from a list, which has yielded an unaided list of brands. Mind share ranks for all categories are determined by tallying student “votes” in order of preference.

We asked students to list their favorite clothing brands, in order of preference. Students cited their favorite top three brands and the following exhibits each teen’s top choice.

Clothing Brand Preferences – All Students


April 2011

Exhibit 44

UPPER- INCOME STUDENT SURVEY – CLOTHING BRAND PREFERENCES , ALL STUDENTS

Spring 2010 Fall 2009Rank Brand % Total Rank Brand % Total Rank Brand % Total Rank Brand % Total

1 Nike 15% 1 Action Sports Brands 13% 1 Action Sports Brands 13% 1 Action Sports Brands 14%2 Forever 21 10% 2 Nike 12% 2 Forever 21 10% 2 Forever 21 10%3 American Eagle 9% 3 American Eagle 10% 3 Nike 9% 3 Hollister 8%4 Action Sports Brands 8% 4 Forever 21 9% 4 American Eagle 7% 4 Nike 8%5 Polo Ralph Lauren 6% 5 Hollister 7% 5 Hollister 7% 5 American Eagle 8%6 Nordstrom 4% 6 Nordstrom 4% 6 Aeropostale 4% 6 Abercrombie & Fitch 4%7 Hollister 3% 7 Polo Ralph Lauren 3% 7 Abercrombie & Fitch 3% 7 Urban Outfitters 4%8 Kohl's 2% 8 Aeropostale 3% Charlotte Russe 3% 8 Aeropostale 3%9 Urban Outfitters 2% 9 Urban Outfitters 3% 9 H&M 2% 9 Buckle 3%

Name Withheld 2% 10 Buckle 2% 10 Nordstrom 2% Kohl's 3%Abercrombie & Fitch 2% Urban Outfitters 2% Nordstrom 3%

Spring 2009 Spring 2008 Fall 2007Rank Brand % Total Rank Brand % Total Rank Brand % Total Rank Brand % Total

1 Action Sports Brands 12% 1 Action Sports Brands 18% 1 Hollister 13% 1 Hollister 14%2 Hollister 12% 2 Hollister 10% 2 Action Sports Brands 11% 2 Action Sports Brands 13%3 Nike 6% 3 Forever 21 8% 3 American Eagle 9% 3 American Eagle 10%4 Forever 21 5% 4 American Eagle 7% 4 Abercrombie & Fitch 5% 4 Abercrombie & Fitch 8%5 American Eagle 5% 5 Abercrombie & Fitch 4% 5 Forever 21 5% 5 Forever 21 6%6 Abercrombie & Fitch 4% 6 Urban Outfitters 4% 6 Nordstrom 4% 6 Nike 6%7 Aeropostale 4% 7 Nike 4% 7 Nike 4% 7 Aeropostale 3%8 Urban Outfitters 3% 8 Charlotte Russe 3% 8 Aeropostale 4% 8 Polo Ralph Lauren 2%9 Nordstrom 2% Nordstrom 3% 9 Old Navy 2% 9 Nordstrom 2%10 Charlotte Russe 2% 10 Kohl's 2% 10 Urban Outfitters 2% Urban Outfitters 2%


1 Hollister 13% 1 Hollister 14% 1 Hollister 16% 1 Hollister 13%

2 American Eagle 11% 2 Action Sports Brands 12% 2 American Eagle 10% 2 Abercrombie & Fitch 10%

3 Action Sports Brands 9% 3 Abercrombie & Fitch 8% 3 Action Sports Brands 9% 3 Action Sports Brands 9%

4 Abercrombie & Fitch 8% 4 American Eagle 8% 4 Abercrombie & Fitch 9% 4 American Eagle 9%

5 Forever 21 6% 5 Urban Outfitters 4% 5 Forever 21 4% 5 d.e.m.o. 4%

6 Nordstrom 6% 6 Forever 21 3% 6 Nordstrom 4% 6 Nordstrom 4%

7 Nike 3% Kohl's 3% 7 Nike 3% 7 Polo Ralph Lauren 3%

8 Old Navy 2% Nordstrom 3% 8 d.e.m.o. 3% 8 Macys Inc. 2%

9 Kohl's 2% 9 Nike 2% 9 Hot Topic 3% Urban Outfitters 2%

10 Gap 2% 10 Polo Ralph Lauren 2% 10 Old Navy 2% 10 Hot Topic 2%

Guess 2% Name Withheld 2%Urban Outfitters 2%

Spring 2005 Spring 2004 Fall 2003

Rank Brand % Total Rank Brand % Total Rank Brand % Total Rank Brand % Total

1 Hollister 12% 1 Abercrombie & Fitch 13% 1 Abercrombie & Fitch 13% 1 Abercrombie & Fitch 15%

2 Abercrombie & Fitch 10% 2 Action Sports Brands 11% 2 American Eagle 6% 2 American Eagle 8%

3 Action Sports Brands 10% 3 Hollister 9% 3 Action Sports Brands 6% Action Sports Brands 8%

4 American Eagle 8% 4 American Eagle 6% 4 Name Withheld 5% 4 Name Withheld 7%

5 d.e.m.o. 7% 5 d.e.m.o. 4% Hollister 5% 5 Hollister 5%

6 Name Withheld 3% 6 Forever 21 3% 6 d.e.m.o. 5% 6 Gap 3%

7 Urban Outfitters 3% Name Withheld 3% 7 Old Navy 4% 7 Old Navy 3%

8 Gap 3% 8 Guess 3% 8 Gap 3% 8 Nordstrom 3%

9 Guess 2% Buckle 3% 9 Polo Ralph Lauren 3% 9 d.e.m.o. 3%

10 Forever 21 2% 10 Nordstrom 3% 10 Guess 2% 10 Forever 21 2%

Nike 2%Nordstrom 2%


1 Abercrombie & Fitch 12% 1 Abercrombie & Fitch 18% 1 Abercrombie & Fitch 13% 1 Abercrombie & Fitch 13%

2 Name Withheld 11% 2 Action Sports Brands 7% 2 Name Withheld 10% 2 Name Withheld 10%

3 Action Sports Brands 10% 3 Name Withheld 7% 3 American Eagle 6% 3 American Eagle 7%

4 American Eagle 9% 4 American Eagle 6% 4 Gap 5% 4 Gap 5%

5 Hollister 5% 5 Gap 5% 5 Action Sports Brands 5% 5 Action Sports Brands 5%

6 Guess 4% 6 Nike 4% 6 Wet Seal 4% 6 Structure 4%

7 d.e.m.o. 3% 7 Old Navy 3% 7 Banana Republic 3% 7 Old Navy 4%

8 Polo Ralph Lauren 3% 8 d.e.m.o. 2% 8 Old Navy 3% 8 Charlotte Russe 3%

9 Gap 3% Polo Ralph Lauren 2% 9 d.e.m.o. 3% 9 Banana Republic 3%10 Old Navy 2% 10 Forever 21 2% 10 Nike 3% 10 Wet Seal 2%

Spring 2001Rank Brand % Total

1 Gap 17%

2 Abercrombie & Fitch 16%

Name Withheld 16%

4 American Eagle 10%

5 Old Navy 8%

6 Action Sports Brands 6%

7 Limited 5%

8 Structure 5%

9 Nordstrom 4%10 Banana Republic 4%

Fall 2010

Fall 2008

Spring 2011

Fall 2002

Fall 2006

Fall 2004



April 2011

Exhibit 45

UPPER- INCOME STUDENT SURVEY – CLOTHING BRAND PREFERENCES , FEMALES

Spring 2010 Fall 2009


1 Forever 21 22% 1 Forever 21 18% 1 Forever 21 20% 1 Forever 21 19%

2 American Eagle 10% 2 American Eagle 11% 2 Hollister 7% 2 Hollister 8%

3 Nordstrom 7% 3 Nordstrom 9% 3 American Eagle 6% 3 American Eagle 7%

4 Buckle 4% 4 Hollister 8% 4 Charlotte Russe 5% 4 Action Sports Brands 7%

5 Urban Outfitters 3% 5 Action Sports Brands 5% 5 Aeropostale 5% 5 Urban Outf itters 6%

Action Sports Brands 3% 6 Urban Outfitters 4% 6 Action Sports Brands 5% 6 Abercrombie & Fitch 4%

7 Hollister 3% 7 Charlotte Russe 3% 7 Urban Outfitters 4% 7 Nordstrom 4%

8 Name Withheld 3% 8 Buckle 3% 8 Wet Seal 4% 8 Charlotte Russe 4%

9 Victoria's Secret 2% 9 Abercrombie & Fitch 2% 9 Nordstrom 3% 9 Aeropostale 4%

10 H&M 2% 10 Aeropostale 2% 10 H&M 3% 10 Buckle 3%

H&M 2%

Guess 2%



1 Hollister 14% 1 Forever 21 15% 1 Hollister 14% 1 Hollister 15%

2 Forever 21 10% 2 Hollister 10% 2 Forever 21 9% 2 Forever 21 13%

3 Action Sports Brands 7% 3 Action Sports Brands 8% 3 American Eagle 8% 3 Abercrombie & Fitch 8%

4 American Eagle 5% 4 American Eagle 7% 4 Nordstrom 8% 4 American Eagle 8%

5 Nordstrom 5% 5 Urban Outfitters 7% 5 Abercrombie & Fitch 5% 5 Nordstrom 4%

6 Abercrombie & Fitch 4% 6 Charlotte Russe 5% 6 Action Sports Brands 4% 6 Urban Outf itters 3%

Aeropostale 4% 7 Abercrombie & Fitch 5% 7 Aeropostale 3% Wet Seal 3%

Charlotte Russe 4% Nordstrom 5% 8 Wet Seal 3% 8 Aeropostale 3%

Urban Outfitters 4% 9 Wet Seal 3% 9 Urban Outfitters 3% Action Sports Brands 3%

10 Buckle 3% 10 Aeropostale 2% 10 Charlotte Russe 2% 10 Charlotte Russe 3%

Macy's Inc. 2%



1 American Eagle 13% 1 Hollister 17% 1 Hollister 18% 1 Hollister 16%

Hollister 13% 2 Abercrombie & Fitch 10% 2 Abercrombie & Fitch 11% 2 Abercrombie & Fitch 12%

3 Forever 21 10% 3 American Eagle 7% 3 American Eagle 10% 3 American Eagle 9%

4 Nordstrom 9% 4 Urban Outfitters 7% 4 Forever 21 8% 4 Nordstrom 7%

5 Abercrombie & Fitch 8% 5 Nordstrom 5% 5 Nordstrom 7% 5 Action Sports Brands 4%

6 Old Navy 3% 6 Forever 21 5% 6 Action Sports Brands 4% Macys Inc. 4%

7 Action Sports Brands 3% 7 Action Sports Brands 5% 7 Urban Outfitters 3% 7 Forever 21 4%

8 Urban Outfitters 2% 8 Guess 4% 8 Charlotte Russe 3% 8 Urban Outf itters 3%

Name Withheld 2% 9 Macy's Inc. 3% Name Withheld 3% 9 Guess 2%

10 Buckle 2% Wet Seal 3% 10 Hot Topic 2% 10 Wet Seal 2%

Guess 2% d.e.m.o. 2%




2 Abercrombie & Fitch 12% 2 Hollister 10% 2 Name Withheld 8% 2 Name Withheld 9%

3 American Eagle 8% 3 American Eagle 6% 3 Hollister 8% 3 Hollister 8%

4 d.e.m.o. 5% 4 Forever 21 6% 4 American Eagle 7% 4 American Eagle 7%

5 Action Sports Brands 4% 5 Action Sports Brands 5% 5 Action Sports Brands 4% 5 Action Sports Brands 5%

6 Name Withheld 4% 6 Guess 4% 6 Guess 4% 6 Forever 21 4%

7 Urban Outfitters 4% Nordstrom 4% 7 d.e.m.o. 4% Nordstrom 4%

8 Guess 3% 8 The Buckle 4% 8 Charlotte Russe 3% 8 Gap 3%

9 Forever 21 3% Name Withheld 4% Old Navy 3% 9 Wet Seal 3%

10 Wet Seal 2% 10 d.e.m.o. 3% 10 Wet Seal 2% 10 Guess 2%

Target 2%



1 Name Withheld 15% 1 Abercrombie & Fitch 19% 1 Name Withheld 14% 1 Abercrombie & Fitch 13%

2 Abercrombie & Fitch 12% 2 Name Withheld 9% 2 Abercrombie & Fitch 10% 2 Name Withheld 11%

3 American Eagle 8% 3 Gap 7% 3 Wet Seal 9% 3 Gap 8%

Action Sports Brands 8% 4 American Eagle 6% 4 Gap 6% 4 American Eagle 6%

5 Guess 7% 5 Action Sports Brands 5% 5 American Eagle 5% 5 Charlotte Russe 5%

6 Hollister 7% 6 Wet Seal 4% Guess 5% 6 Wet Seal 4%

7 Forever 21 4% 7 Forever 21 4% 7 Old Navy 4% 7 Old Navy 3%

8 Charlotte Russe 2% 8 Old Navy 3% 8 Action Sports Brands 3% 8 Guess 3%

Gap 2% 9 Charlotte Russe 3% 9 Banana Republic 3% 9 Action Sports Brands 3%

Old Navy 2% 10 Guess 3% bebe 3% 10 bebe 2%

Forever 21 2%

Fall 2010

Fall 2004

Fall 2002

Spring 2011

Fall 2008

Fall 2006



April 2011

Exhibit 46

UPPER- INCOME STUDENT SURVEY – CLOTHING BRAND PREFERENCES , MALES



1 Nike 27% 1 Nike 23% 1 Action Sports Brands 21% 1 Action Sports Brands 21%

2 Action Sports Brands 12% 2 Action Sports Brands 20% 2 Nike 17% 2 Nike 15%

3 Polo Ralph Lauren 11% 3 American Eagle 8% 3 American Eagle 10% 3 American Eagle 8%

4 American Eagle 7% 4 Hollister 5% 4 Hollister 7% 4 Hollister 8%

5 Kohl's 3% 5 Polo Ralph Lauren 5% 5 Polo Ralph Lauren 3% 5 Polo Ralph Lauren 4%

6 Levis 3% 6 Aeropostale 3% 6 Aeropostale 3% 6 Abercrombie & Fitch 3%

7 Gap 2% 7 Kohl's 2% 7 Abercrombie & Fitch 2% 7 Aeropostale 3%

8 Hollister 2% 8 Abercrombie & Fitch 2% 8 Ecko Unlimited 2% 8 Hot Topic 3%

9 Abercrombie & Fitch 2% 9 Under Armour 2% 9 Adidas 2% 9 Buckle 2%

10 Name Withheld 2% Levis 2% 10 Hot Topic 2% Kohl's 2%




2 Nike 11% 2 Hollister 11% 2 Hollister 13% 2 American Eagle 13%

3 Hollister 9% 3 American Eagle 8% 3 American Eagle 10% 3 Hollister 12%

4 American Eagle 5% 4 Nike 7% 4 Nike 7% 4 Abercrombie & Fitch 7%

5 Abercrombie & Fitch 4% 5 Abercrombie & Fitch 3% 5 Abercrombie & Fitch 6% 5 Nike 6%

6 Aeropostale 3% 6 Name Withheld 2% 6 Aeropostale 4% 6 Kohl's 2%

7 Old Navy 3% 7 Kohl's 2% 7 Old Navy 2% 7 Name Withheld 2%

Polo Ralph Lauren 3% 8 Champs 2% Polo Ralph Lauren 2% Polo Ralph Lauren 2%

9 Hot Topic 2% 9 Ecko 1% 9 Under Armour 2% 9 Aeropostale 2%

10 Gap 2% Polo Ralph Lauren 1% 10 Ecko 2% 10 Hot Topic 2%

Kohl's 2% Target 1%

Levis 2% Under Armour 1%

Under Armour 2%

Urban Outfitters 2%





3 Abercrombie & Fitch 9% 3 American Eagle 9% 3 American Eagle 10% 3 Abercrombie & Fitch 8%

American Eagle 9% 4 Abercrombie & Fitch 7% 4 Abercrombie & Fitch 6% American Eagle 8%

5 Nike 7% 5 Nike 5% 5 Nike 6% 5 d.e.m.o. 7%

6 Aeropostale 3% 6 Polo Ralph Lauren 4% 6 d.e.m.o. 4% 6 Polo Ralph Lauren 5%

7 Gap 3% 7 Kohl's 3% 7 Old Navy 4% 7 Wal-Mart 3%

Kohl's 3% 8 Hot Topoic 3% 8 Hot Topic 3% 8 Hot Topic 3%

9 Hot Topic 2% 9 ecko unltd. 2% 9 Wal-Mart 3% 9 Levi 2%

10 Polo Ralph Lauren 2% Lacoste 2% 10 Polo Ralph Lauren 2% 10 Gap 2%

Wal-mart 2% Kohl's 2%

Lacoste 2%



1 Action Sports Brands 20% 1 Action Sports Brands 21% 1 Abercrombie & Fitch 13% 1 Action Sports Brands 14%

2 d.e.m.o. 11% 2 Abercrombie & Fitch 10% 2 Action Sports Brands 8% 2 American Eagle 10%

3 Hollister 9% 3 Hollister 8% 3 American Eagle 5% 3 Abercrombie & Fitch 9%

4 Abercrombie & Fitch 8% 4 Nike 7% Polo Ralph Lauren 5% 4 Old Navy 6%

5 American Eagle 7% 5 d.e.m.o. 5% d.e.m.o. 5% 5 Gap 5%

6 Nike 5% American Eagle 5% 6 Gap 5% 6 d.e.m.o. 4%

7 Gap 3% 7 Gap 4% 7 Banana Republic 4% 7 Name Withheld 3%

8 Name Withheld 2% 8 Polo Ralph Lauren 3% Old Navy 4% Nike 3%

Old Navy 2% Name Withheld 3% 9 Nike 3% Polo Ralph Lauren 3%

Polo Ralph Lauren 2% Old Navy 3% 10 Hollister 3% Target 3%

Buckle 3%



1 Action Sports Brands 13% 1 Abercrombie & Fitch 16% 1 Abercrombie & Fitch 16% 1 Abercrombie & Fitch 14%

2 Abercrombie & Fitch 12% 2 Action Sports Brands 9% 2 Action Sports Brands 8% 2 Name Withheld 9%

3 American Eagle 9% Nike 9% 3 Name Withheld 6% 3 Action Sports Brands 7%

4 Polo Ralph Lauren 7% 4 American Eagle 6% 4 American Eagle 6% 4 American Eagle 7%

5 Name Withheld 6% d.e.m.o. 6% 5 Polo Ralph Lauren 5% 5 Old Navy 5%

6 d.e.m.o. 6% 6 Polo Ralph Lauren 6% 6 Nike 5% 6 Mr. Rags 3%

7 Nike 4% 7 Old Navy 5% 7 Banana Republic 5% 7 Foot Locker 3%

8 Quiksilver 3% 8 Nautica 3% Gap 5% 8 Gap 2%

9 Nautica 3% 9 Anchor Blue 3% 9 Tommy Hilf iger 4% Kohl's 2%

6 brands tied for 10th place Ecko Unlimited 3% 10 Old Navy 3% J.C. Penney 2%

Gap 3%

Fall 2002

Fall 2010

Fall 2004

Fall 2006

Fall 2008

Spring 2011



April 2011

Key Highlights: Brand Preferences – All Students

• When looking at the top ten brands as a group, approximately eight brands repeated their top ten inclusions from the prior season and six brands from the prior year. Kohl’s moved into the top ten, while Aeropostale, The Buckle, and Abercrombie & Fitch fell out of the top ten. When compared to the prior year, American Eagle and Polo Ralph Lauren were an addition to the list while the remaining brands were the same. The last time Kohl’s made our top ten brand preference list was in Fall 2009 (three surveys ago).

• In total, most of the brands selected were those we had expected. Brands with national presence or store bases in states surveyed tended to rank highest, particularly in the top five brands listed.

• The shift in rank among brands was the most notable takeaway from our brand preferences question. We note a drop-off in the Action Sports Brands group at an 8% share and No. 4 rank compared to Fall 2010 and last Spring’s 13% share and No. 1 rank. However, Nike rose to the No. 1 spot by gaining 2ppt, which could indicate some tradeoff from action sports to mainstream sports.

• Among the top five brands, American Eagle holds steady at the No. 3 position for the second consecutive season. Forever 21 jumped two spots to No. 2 from Fall; we note that Forever 21 has held the No. 2 position in three of the last four surveys. Conversely, Abercrombie & Fitch, which has always appeared on our top ten Upper-Income list, did not make the top ten ranking this iteration (No. 12), which could possibly speak to the company’s promotional pricing posture limiting its appeal. However, Hollister remains on our list, falling from No. 5 year-over-year and sequentially to No. 7.

• The top five brands accounted for 48% mindshare, down from 51% in Fall but up slightly from 47% last Spring. This compares to a 19-survey average of 46%. The top

Exhibit 47

UPPER- INCOME STUDENT SURVEY – BRAND CONCENTRAT ION

Top 5 Top 4 Top 31 Fall 2001 39% 34% 29%2 Fall 2002 47% 42% 33%3 Spring 2003 47% 42% 33%4 Fall 2003 43% 38% 31%5 Spring 2004 35% 30% 25%6 Fall 2004 43% 39% 33%7 Spring 2005 47% 40% 32%8 Fall 2005 45% 41% 32%9 Spring 2006 48% 44% 35%10 Fall 2006 47% 41% 33%11 Spring 2007 51% 45% 37%12 Fall 2007 51% 45% 37%13 Spring 2008 43% 39% 33%14 Fall 2008 47% 43% 36%15 Spring 2009 41% 35% 30%

16 Fall 2009 46% 39% 31%

17 Spring 2010 47% 40% 32%

18 Fall 2010 51% 44% 35%

19 Spring 2011 48% 41% 34%



April 2011

four brands accounted for 41% mindshare, down 3ppt from Fall and up 1ppt from Spring 2010. The top three brands accounted for 34% mindshare, slightly down from 35% in Fall and up from 32% in Spring 2010.

• We notice more strength in the top five, top four, and top three brands these last few years; in Spring 2008, the top five brands owned 43% of our survey responses which then dropped to 41% in Spring 2009 but Spring 2010 and this current season has increased to 47% and 48% respectively. One possibility could be the booming marketplace pre-recession explains the top five dilution in 2008/2009 (as retailers typically place orders six months before they sell) and fewer small brands and retailers post-recession. Additionally, because pricing has become a more important consideration for consumers, large retailers with buying power can provide better prices and hence can win more mindshare.

• Relative to the prior years, brands included among the top ten were largely similar. Hollister fell out of the top five rank from Fall and last Spring (to No. 7); Polo Ralph Lauren swapped places with Hollister (up from No. 7 in Fall).

• Action Sports Brands did not maintain its top ranked position, falling to No. 4 with 8% share. This grouping of brands has been the most popular brand for five consecutive seasons, peaking with 18% share in Fall 2008. The level achieved this Spring is not consistent with historical low-double-digit share, and we believe a lower response rate from the West Coast (48% fewer surveys taken than in the Fall) is largely responsible since West Coast lifestyle weighs more heavily on Action Sports Brands.

• While the spread between the top two brands has been narrowing the last two seasons, our Spring survey reversed this trend. Nike gained 3ppt to hold a 15% share with Forever 21 5ppt behind at 10% share.

• In the Fall, we noted the sports apparel brands (Action Sports and Nike) had never held the No. 1 and No. 2 positions in our brand preference survey. The combined 25% share of Action Sports Brands and Nike is the group’s highest percentage total since the inception of our survey. This Spring, Nike appears to be gaining more strength and is pulling away from the pack.

• In regards to the other top five brands, season-to-season share was slightly lost at American Eagle (from 10% to 9%) and slightly gained by Forever 21 (+1ppt from 9% to 10%).

• Together, Abercrombie & Fitch Co. brands commanded approximately 4% share, down from 9% in Fall 2010, 10% in Spring 2010, 12% share in Fall 2009, 16% in Spring 2009, and 14% in Fall 2008. This marks the company’s lowest point to-date with respect to collective mindshare. Share peaked in Spring 2006 at 25% (Abercrombie & Fitch with 9% share and Hollister with 16% share). The brand is still important to teens aged 14 to 17 years, but not in the same manner it was when it peaked at 25% in

Exhibit 48

UPPER- INCOME STUDENT SURVEY – CLOTHING BRANDS PREFERRED, ALL STUDENTS

Rank Spring 2011 % Total Fall 2010 % Total Spring 2010 % Total

1 Nike 15% Action Sports Brands 13% Action Sports Brands 13%2 Forever 21 10% Nike 12% Forever 21 10%3 American Eagle 9% American Eagle 10% Nike 9%4 Action Sports Brands 8% Forever 21 9% American Eagle 7%

5 Polo Ralph Lauren 6% Hollister 7% Hollister 7%



April 2011

Spring 2006. We believe a shifting demographic is beneficial in keeping the company relevant and fresh in the constantly changing retail environment. As we have mentioned in prior research notes, the Abercrombie brands are deriving larger share from an international tourist base.

• Forever 21’s move higher is of particular interest as we have observed increased female preference toward Fast Fashion brands over the last three years. We noted in our Spring 2010 survey report that Forever 21’s share (at 10%) may well mark the brand’s peak but based on the company’s expansion plans (including larger store formats) and the continuing popularity of Fast Fashion, we now retract that forecast and believe the company could gain more share in future surveys. However, our recent survey still excludes Charlotte Russe and H&M from the top ten brand preference list; these Fast Fashion retailers were ranked No. 7 and No. 9 in Spring 2010.

• Within the balance of the top ten, we highlight the upwards progression of Polo Ralph Lauren. After an absence in our past five surveys, Polo Ralph Lauren re-emerged in the No. 7 position this past Fall and now ranks No. 5. Polo Ralph Lauren’s 6% share precedes Nordstrom’s No. 6 ranking and 4% share. Polo Ralph Lauren and Nordstrom have jointly made the top ten brand preference list for the second consecutive season, with the combined companies accounting for a 10% share – up from 7% in the Fall – which we believe indicates upper-income teen proclivity towards higher-end brand labels.

Key Highlights: Brand Preferences – By Gender

• When segmenting our brands preferred category by gender, we note several differences between females and males. Among the top five brands preferred, two brands crossed over between genders – American Eagle and Action Sports Brands.

• For females, Forever 21 (primarily a single gender retailer) captured 22% share from this past Fall’s 18% share. Girls selected Nordstrom (No. 3, 7% share) among their top five preferred brands while guys selected Nike (No. 1, 27%) and Polo Ralph Lauren (No. 5, 11%) among their top five preferred brands.

• We must again comment on Forever 21 as the dominant brand for females. Forever 21’s 22% capture is 12ppt higher than No. 2 American Eagle. Similarly, Nike’s 27% capture is 15ppt higher than No. 2 Action Sports Brands as the dominant brand for male students. These two brands essentially have a stronghold on each gender that is growing: in the Fall, Forever 21 garnered 18% share and Nike 23% share.

Exhibit 49

UPPER- INCOME STUDENT SURVEY – CLOTHING BRANDS PREFERRED, BY GENDER

Rank Female % Total Male % Total

1 Forever 21 22% Nike 27%

2 American Eagle 10% Action Sports Brands 12%

3 Nordstrom 7% Polo Ralph Lauren 11%

4 The Buckle 4% American Eagle 7%

5 Urban Outfitters 3% Kohl's 3%

Action Sports Brands 3%


Clothing Brand Preferences – By Gender


April 2011

• With respect to brand concentration by gender, the top five brands among females accounted for 49% while the top five accounted for 60% mindshare among males. This compares with this past Fall’s 51% for females and 61% for males (fairly similar), Spring 2010’s 43% and 58%, respectively, and Fall 2009’s 43% of female share and 57% of male share. The trend appears to be moving towards more consolidation among female brand preferences.

Key Highlights: Brand Preferences – Females

• As we evaluate the top five brands among females on both a sequential and year-over-year basis, we highlight Forever 21’s top ranking for the 4th consecutive survey. The brand gained back 4ppt after losing 2ppt in the Fall 2010 ranking (from 20% to 18%). On a year-over-year basis, Forever 21 maintained its No. 1 rank, gaining an additional 2ppt of share to 22%, the brand’s highest level to-date.

• American Eagle maintained its No. 2 position despite losing 1ppt from the prior Fall period 11% for a 10% share. In the Fall, American Eagle displaced Hollister in the No. 2 position by gaining 5ppt from the prior period 6% share for an 11% share, which was the Eagle’s highest share capture since its No. 1 position and 13% share back in Spring 2007. We continue to believe AEO has some of the strongest fashions in the teen market. The brand does not just come out with commodity-like pieces but instead infuses novelty into its product. While FQ4 comps may have been disappointing, female teens are still in favor of the brand.

• Hollister slipped off the top five list after slowly losing rank the past two seasons. While still in the top ten (at No. 7), we are sensing more female teens are veering towards fashion as evidenced by a top ten list that includes Fast Fashion retailers Forever 21 and H&M, premium department store Nordstrom, and edgy retailer Urban Outfitters.

• Nordstrom remains in the No. 3 position after jumping 6 spots to the No. 3 position from its prior period No. 9 ranking in the Fall survey. The BP (Brass Plum) department was frequently cited in the survey response next to Nordstrom. Despite losing 3ppt share (from 9% to 6%), Nordstrom represents one of the fastest climbers in the female upper-income student survey.

• Also moving into the top five among females was The Buckle (No. 4, 4% share), replacing American Eagle (No. 2, 10% share). We think this dynamic is somewhat interesting as the other specialty retailers are known for fashionable and differentiated product (Nordstrom, Forever 21, American Eagle, and Urban Outfitters).

• On a concentration basis, the top five brands preferred among females accounted for roughly 49% share, down from 51% in the Fall but up from 43% share in Spring 2011.

Exhibit 50

UPPER- INCOME STUDENT SURVEY – CLOTHING BRANDS PREFERRED, FEMALE


1 Forever 21 22% Forever 21 18% Forever 21 20%

2 American Eagle 10% American Eagle 11% Hollister 7%

3 Nordstrom 7% Nordstrom 9% American Eagle 6%

4 The Buckle 4% Hollister 8% Charlotte Russe 5%

5 Urban Outf itters 3% Action Sports Brands 5% Aeropostale 5%




April 2011

Key Highlights: Brand Preferences – Males

• For males responding to our brand preference question, the top five brands for all three relevant periods (current, sequential, and prior year) are largely consistent, with the most notable exception of Nike maintaining the No. 1 spot for second consecutive season and Hollister slipping out of the top five (to No. 8, 2% share) with Kohl’s moving up to No. 5 (3% share). In the last survey iteration, Nike replaced Action Sports Brands as the top male clothing brand of choice for the first time in survey history. Nike’s 4ppt sequential move and 10ppt year-over-year move is a big move; this represents Nike’s highest share and rank in our ten year survey history. It’s unclear as to what is driving the meaningful move higher among males, although we think a packed sporting calendar and subsequent aggressive marketing campaigns have propelled the brand. Nike’s Air Jordan, Air Force One, and skate sub-brands have enabled the brand to remain relevant despite degradation in share among the technical and fashion athletic classifications. Expanding the Nike brand into other sports such as snowboarding and skateboarding has likely also helped the brand gain share. Pacific Sunwear has rolled out Nike 6.0 (action sports - surf/snow/BMX/moto/ski/wake - shoes) hard shops in a majority of their stores, which could further propel growth.

• We reiterate that the No. 2 ranking and 8ppt share loss (to 12% from prior period’s 20%) for Action Sports Brands could be the result of fewer Western region survey responses. However, as noted above, Nike is aggressively pursing the action sports market which could be softening the Action Sports Brands category. For the Action Sports Brands category, the Fall 2008 iteration marked its highest mark in terms of mindshare at 28%. We note that action sports continues to abound in the market: Zumiez opened net 23 new stores in 2010 (+6%) and plans to open 44 this year (+11%), and VF Corp has said that it plans to add $5 billion in revenue over the next five years through a variety of efforts with the outdoor (The North Face) and action sport (Vans) categories central to the growth.

• Relative to the prior season, Polo Ralph Lauren gained 3ppt (11% share), American Eagle slightly lost share (from No. 3 to No. 4, and Kohl’s jumped from No. 7 to No. 5. Polo Ralph Lauren continues to replace Abercrombie & Fitch in the top five brands; For the 4th consecutive survey, Abercrombie & Fitch has not been able to re-emerge into top five. Prior to Fall 2009, Abercrombie & Fitch had been ranked among the top five male preferred brands since our survey’s inception.

• One interesting development this survey cycle pertains to the Gap. Among Upper-Income males, Gap ranked No. 7 (2%) from the Fall survey. This upward movement was a significant 17 spot improvement over its prior No. 24 (1%). In Spring 2010,

Exhibit 51

UPPER- INCOME STUDENT SURVEY – CLOTHING BRANDS PREFERRED, MALE


1 Nike 27% Nike 23% Action Sports Brands 21%

2 Action Sports Brands 12% Action Sports Brands 20% Nike 17%

3 Polo Ralph Lauren 11% American Eagle 8% American Eagle 10%

4 American Eagle 7% Hollister 5% Hollister 7%

5 Kohl's 3% Polo Ralph Lauren 5% Polo Ralph Lauren 3%



April 2011

Gap’s ranking was No. 19. We note that Gap appears to be connecting with male teens but not female teens.

• On a concentration basis, the top five brands among males accounted for 60% share, roughly the same as its 61% share in the Fall and up from 58% in Spring 2010.

As we monitor brand choices among teens, we are able to identify underlying themes in preference. Many of these distinctions have roots in media influences, broader pop culture, and trend direction from boutique brands and fashion design centers. In the following section, we highlight a few of these key themes that have emerged in recent periods: the rise of Action Sports Brands, the growth in Fast Fashion during the cycle transition, the convergence of fashion and athletics, and the degree to which a (lack of) brand concentration signals potential cyclical changes in spending.

Key Highlights: Brand Preferences – Action Sports Lifestyle

• The Action Sports lifestyle continues to resonate with teens, but the category’s share fell from the No.1 ranking, a position held since Fall 2008, to No. 4 in Spring 2011. The category’s share fell to 8%, driven by 12% share capture among males and 3% among females.

• Importantly, we had fewer West region survey responses this cycle than in Fall 2010 period. In Fall 2010, 35% of upper-income responses were from the West compared with 23% in our Spring 2011 survey. Results from the West typically favor Action Sports Brands and we believe a significant portion of the category’s decline in share in this survey is due to the geographic shift in responses.

• Collectively, teens named 19 unique brands and retailers in the Action Sports Brands category.

Clothing Brand Preferences – Action Sports & Boardsport Brands

Exhibit 52

UPPER- INCOME STUDENT SURVEY – ACT ION SPORTS BRANDS MENTIONED

10

1620

38

24 24

34

65

51

3027

33

19

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

0

10

20

30

40

50

60

70

Spring 2005

Fall 2005

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

# o

f Bra

nd

s R

ela

tive

to #

of R

espo

nses

# o

f B

ran

ds

Brands Mentioned Brands Mentioned / Number of Responses



April 2011

• Among males, the category share declined to 12% from 20% in Fall 2010 while the rank remained at No. 2. On a year-over-year basis, the rank fell one position and share declined from 21%.

• Among females, the category fell in share to 3% but rank was flat on a sequential basis and improved one position to No. 5 year-over-year.

• We believe a key to growth for many Action Sports lifestyle brands is evolving women’s assortments. Relative to the 19-survey average share of 5% and No. 5 rank, our most recent survey suggests females continue to shy away from Action Sports.

• While the boundaries were at one time distinct between segments within the action sports lifestyle, we argue that the lifestyle has grown beyond participation through access to media and growth of national retailers such as Pacific Sunwear and Zumiez. The presence of brands in the familiar mall-based specialty environment has blurred the buying behavior between “hard core participant” and “aspirational teen.”

• In addition, we believe Nike’s growing share may understate the share of Action Sports as the company’s has been gaining share in the category through its Nike SB and Nike 6.0 brands. Both Nike SB and Nike 6.0 received votes for the most popular footwear, and we believe some of Nike’s increasing apparel and footwear share is driven by these brands.

• Similarly, evolution of the lifestyle has created crossover brands, which may have had roots in one boardsport segment but now are widely accepted and worn by anyone interested in the broader lifestyle. For the reasons listed above, it is becoming increasingly difficult to distinguish what is truly an “action sports lifestyle” authentic or inspired brand. We expect this convergence trend to continue, particularly as many of the vertically integrated specialty retailers test similar looks, particularly in the

Exhibit 53

UPPER- INCOME STUDENT SURVEY – ACT ION SPORTS BRANDS SHARE BY GENDER

Males Females

% Mindshare % Rank % Mindshare % Rank

Spring 2002 8% 2 3% 8

Fall 2002 9% 2 5% 5

Spring 2003 13% 1 8% 3

Fall 2003 14% 1 5% 5

Spring 2004 8% 2 4% 5

Fall 2004 21% 1 5% 5

Spring 2005 20% 1 4% 5

Fall 2005 15% 1 4% 5

Spring 2006 16% 1 4% 6

Fall 2006 19% 1 5% 7

Spring 2007 17% 1 7% 3

Fall 2007 22% 1 3% 8

Spring 2008 17% 1 4% 6

Fall 2008 28% 1 8% 3

Spring 2009 18% 1 7% 3

Fall 2009 21% 1 7% 4

Spring 2010 21% 1 5% 6

Fall 2010 20% 2 5% 5

Spring 2011 12% 2 3% 5

19-survey avg 17% 1 5% 5



April 2011

graphic tees, denim (skater skinny), and fleece (all over print) categories. Teens named 19 brands which we have included in our Action Sports category but there were an additional 5-10 brands which could be included, if we were to expand the definition of Action Sports brands. Teens identified six different retailers of Action Sports brands.

• We also witnessed several retailers capitalizing on the popularity of Mixed Martial Arts (MMA) and brands in the street culture category. These become a natural component of assortment planning as many consumers who grew up in the action sports community are aging into other fashion lifestyles including these rock, street, and crossover categories. As a reminder, we have not included MMA brands in our Action Sports rankings.

• When consolidating our results across genders, Pacific Sunwear continues to command the leading mindshare (40%) within the Action Sports category. The retailer’s share of Action Sports did increase from 34% in Spring 2010 and 30% in Fall 2010. In addition, the company maintained its No. 1 rank within Action Sports for females and males. Zumiez commanded 6% share, up from 5% in Fall 2010 but down from 14% in Spring 2010.

• For females, identification with the lifestyle has been historically tied to the retailers that sell the product and our most recent iteration was no different. Pacific Sunwear commanded 50% share, up from 38% in Fall 2010 and down from 71% in Spring 2010. In total, girls listed five unique brands/retailers versus 12 in Fall 2010, seven in Spring 2010 and 10 during Fall 2009.

• In total, retailers accounted for 61% of the category vote while individual brands accounted for 39%. This is in contrast with males, where 55% of the category share is attributed to retailers and 45% to individual brands.

• For males, Pacific Sunwear commanded 38% share, up from 29% share in Fall 2010 and 27% in Spring 2010. Zumiez commanded a 7% share, up from 5% share in Fall 2010 but down from 16% in Spring 2010.

• Compared with a 19-survey average share of 10.4%, the category captured 8% mindshare in our current survey.

Exhibit 54

UPPER- INCOME STUDENT SURVEY – ACT ION SPORTS BRAND SHARE

5%

7%

10%

8%

6%

11%10%

9% 9%

12%

9%

13%

11%

18%

12%

14%13% 13%

8%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

19-Survey Average = 10.4%



April 2011

Exhibit 55

UPPER- INCOME STUDENT SURVEY – ACT ION SPORTS BRAND PREFERENCES

ACTION SPORTS BRANDS PREFERENCES - UPPER INCOME STUDENT SURVEY - ALL STUDENTS

Rank Brand % AS % Total Rank Brand % AS % Total Rank Brand % AS % Total Rank Brand % AS % Total Rank Brand % AS % Total

1 Pacif ic Sunw ear 40% 3% 1 Pacif ic Sunw ear 30% 4% 1 Pacific Sunw ear 34% 4% 1 Pacif ic Sunw ear 35% 5% 1 Pacif ic Sunw ear 43% 5%

2 Name Withheld 10% 1% 2 Name Withheld 7% 1% 2 Zumiez 14% 2% 2 Volcom 11% 1% 2 Volcom 15% 2%

3 Volcom 8% 1% 3 Volcom 6% 1% 3 Volcom 9% 1% 3 Zumiez 10% 1% 3 Zumiez 11% 1%

4 LRG 6% 0% 4 LRG 5% 1% 4 Quiksilver 7% 1% 4 Hurley 5% 1% 4 LRG 6% 1%

Zumiez 6% 0% Zumiez 5% 1% 5 Vans 4% 1% Quiksilver 5% 1% 5 RVCA 4% 1%

6 Hurley 4% 0% 6 Obey 4% 1% 6 Name Withheld 3% 0% 6 Vans 4% 1% 6 Name Withheld 3% 0%

Vans 4% 0% Quiksilver 4% 1% 7 Billabong 3% 0% 7 DC 3% 0% 13 brands tied for 7th place

8 Anchor Blue 3% 0% 8 Billabong 3% 0% DC 3% 0% 8 Anchor Blue 2% 0%

DC 3% 0% RVCA 3% 0% FOX Racing 3% 0% 9 Fox Racing 2% 0%

Fox Racing 3% 0% Vans 3% 0% LRG 3% 0% Gen X 2% 0%

Quiksilver 3% 0% 11 Fox Racing 3% 0% Sun Diego 3% 0% Nomis 2% 0%

8 brands tied for 12th place Hurley 3% 0% 12 Evisu 2% 0% Name Withheld 2% 0%

13 DC 2% 0% Famous Stars & Straps 2% 0%

Papaya 2% 0% Hurley 2% 0%

6 brands tied for 15th place 13 brands tied for 15th place

Action Sports Brands 100% 8% Action Sports Brands 100% 12% Action Sports Brands 100% 13% Action Sports Brands 100% 14% Action Sports Brands 100% 12%

ACTION SPORTS BRANDS PREFERENCES - UPPER INCOME SURVEY - FEMALE



2 Name Withheld 29% 1% 2 Papaya 13% 1% 2 FOX Racing 5% 0% 2 Anchor Blue 5% 0% 2 Zumiez 9% 1%

3 Volcom 7% 0% Name Withheld 13% 1% karmaloop.com 5% 0% Hurley 5% 0% 3 DC 5% 0%

Anchor Blue 7% 0% 4 Billabong 4% 0% lf 5% 0% Papaya 5% 0% Volcom 5% 0%

Roxy 7% 0% No Fear 4% 0% Rainbow s 5% 0% Roxy 5% 0% Roxy 5% 0%

Obey 4% 0% Roxy 5% 0% Volcom 5% 0% Rainbow s 5% 0%

Ocean Pacif ic 4% 0% Zumiez 5% 0% Zumiez 5% 0%

Roxy 4% 0% 8 Fox Racing 2% 0%

Sun Diego Boardshop 4% 0% Name Withheld 2% 0%

Vans 4% 0% Vans 2% 0%

Volcom 4% 0%

Zumiez 4% 0%

Action Sports Brands 100% 3% Action Sports Brands 100% 5% Action Sports Brands 100% 5% Action Sports Brands 100% 7% Action Sports Brands 100% 7%

ACTION SPORTS BRANDS PREFERENCES - UPPER INCOME SURVEY - MALE



2 Volcom 9% 1% 2 Volcom 7% 1% 2 Zumiez 16% 3% 2 Volcom 13% 3% 2 Volcom 20% 4%

3 Zumiez 7% 1% 3 LRG 6% 1% 3 Volcom 12% 2% 3 Zumiez 12% 3% 3 Zumiez 12% 2%

LRG 7% 1% Name Withheld 6% 1% 4 Quiksilver 9% 2% 4 Quiksilver 6% 1% 4 LRG 8% 1%

5 Vans 5% 1% 5 Quiksilver 5% 1% 5 Name Withheld 4% 1% 5 Hurley 5% 1% 5 Name Withheld 4% 1%

Hurley 5% 1% Zumiez 5% 1% Vans 4% 1% Vans 5% 1% RVCA 4% 1%

Name Withheld 5% 1% 7 Obey 4% 1% 7 Billabong 3% 1% 7 DC 4% 1% 7 Evisu 2% 0%

8 Fox Racing 3% 0% RVCA 4% 1% DC 3% 1% 8 Gen X 2% 1% Unit (BMX) 2% 0%

DC 3% 0% 9 Billabong 3% 1% LRG 3% 1% Nomis 2% 1% Fallen 2% 0%

Quiksilver 3% 0% Fox Racing 3% 1% Sun Diego 3% 1% 12 brands tied for 10th place Univ 2% 0%

11 Sw ell 2% 0% Hurley 3% 1% 9 brands tied for 11th place Adio 2% 0%

Truth Soul Armor 2% 0% Vans 3% 1% Vans 2% 0%

WeSC 2% 0% 13 DC 3% 0% Dans Comp (BMX) 2% 0%

Element 2% 0% 4 brands tied for 14th place RVCA 2% 0%

Girls Skateboard Company 2% 0% Quiksilver 2% 0%

Billabong 2% 0% One Industries 2% 0%

BC Surf And Sports 2% 0% Sun Diego 2% 0%

Anchor Blue 2% 0%

Action Sports Brands 100% 12% Action Sports Brands 100% 19% Action Sports Brands 100% Action Sports Brands 100% 21% Action Sports Brands 100% 18%

Spring 2011

Spring 2011

Spring 2011

Fall 2010

Fall 2010

Fall 2010

Spring 2010

Spring 2010

Spring 2010

Fall 2009

Fall 2009

Fall 2009

Spring 2009

Spring 2009

Spring 2009



April 2011

Exhibit 56

UPPER- INCOME STUDENT SURVEY – BOARDSPORT CLOTHING BRANDS PREFERRED, ALL STUDENTS


Rank Brand % BS Rank Brand % BS Rank Brand % BS Rank Brand % BS

1 Volcom 22% 1 Volcom 11% 1 Volcom 22% 1 Volcom 23%

2 LRG 15% 2 LRG 9% 2 Quiksilver 16% 2 Hurley 10%

3 Vans 11% 3 Obey 8% 3 Vans 10% Quiksilver 10%

Hurley 11% Quiksilver 8% 4 Billabong 6% 4 Vans 9%

5 DC 7% 5 Billabong 6% DC 6% 5 DC 6%

Fox Racing 7% RVCA 6% Fox 6% 6 Fox Racing 4%

Quiksilver 7% Vans 6% LRG 6% Gen X 4%

8 Girls Skateboard Co. 4% 8 Fox Racing 5% 8 Evisu 4% Nomis 4%

Truth Soul Armor 4% Hurley 5% Famous Stars & Straps 4% 9 billabong 3%

Billabong 4% 10 DC 4% Hurley 4% Element 3%

Roxy 4% Papaya 4% 11 Element 2% Famous 3%

Element 4% 12 Anchor Blue 3% If 2% Hundreds 3%

CCS 3% Rainbow 2% LRG 3%

Element 3% Roxy 2% Roxy 3%

Matix 3% RVCA 2% RVCA 3%

Ocean Pacif ic 3% Stussy 2% Zoo York 3%

Zoo York 3% The Hundreds 2%

w esc 2%

Zoo York 2%



1 Volcom 37% 1 Volcom 20% 1 Volcom 43% 1 Quiksilver 22%

2 LRG 13% 2 Quiksilver 13% 2 Quiksilver 17% 2 Volcom 20%

3 RVCA 7% 3 Billabong 8% 3 LRG 11% 3 Billabong 8%

4 Adio 3% 4 Hurley 6% 4 Billabong 9% 4 DC 7%

Dans Comp (BMX) 3% LRG 6% DC 9% 5 Famous 5%

DC 3% Vans 6% 6 Hurley 4% 6 Hurley 3%

Evisu 3% 7 No Fear 5% 7 Element 2% Krew 3%

Fallen 3% 8 Fox 4% O'Neill 2% LRG 3%

One Industries 3% 9 DC 3% RVCA 2% Obey 3%

Quiksilver 3% Element 3% Zoo York 2% Vans 3%

Rainbow s 3% Famous Stars & Straps 3%

Roxy 3% Oakley 3%

RVCA 3% Rainbow 3%

Unit (BMX) 3% RVCA 3%

Univ 3% Sw ell 3%

Vans 3% 12 brands tied for 16th place



1 Quiksilver 20% 1 Volcom 20% 1 Quiksilver 31% 1 Volcom 41%

2 Billabong 12% 2 Hurley 15% 2 Volcom 21% 2 Quiksilver 22%

3 Hurley 12% 3 Quiksilver 15% 3 Billabong 12% 3 Ezekiel 8%

4 Burton 8% 4 Billabong 8% 4 DC 5% 4 Billabong 5%

Element 8% 5 Roxy 7% 5 Hurley 5% 4 Hurley 5%

Volcom 8% 6 Fox 3% Roxy 5% Rusty 5%

7 CCS 4% RVCA 3% Element 5% 6 Burton 3%

DC 4% 8 17 brands tied for 8th place 6 Aqua 2% O'Neill 3%



1 Quiksilver 34% 1 Volcom 37% 1 Quiksilver 18% 1 Roxy 17%

2 Volcom 28% 2 Quiksilver 30% Ezekiel 18% 2 Billabong 13%

3 Billabong 13% 3 Independent 4% 3 DC 14% Quiksilver 13%

4 Hurley 9% Hurley 4% 4 O'Neill 9% Volcom 13%

5 Element 6% Von Zipper 4% Volcom 9% 5 Ezekiel 9%

etnies 6% Roxy 4% Hurley 9% Hurley 9%

7 DC 3% etnies 4% Roxy 9% Vans 9%

DC 4% Billabong 9% 8 Atticus 4%

9 Bullhead 2% 9 Burton 5% Element 4%

Ocean Pacif ic 2% Kikw ear 4%

Spring 2003 Spring 2002

Rank Brand % BS Rank Brand % BS Rank Brand % BS

1 Quiksilver 24% 1 Quiksilver 19% 1 Quiksilver 60%

2 Billabong 21% Roxy 19% 2 Roxy 20%

3 Roxy 18% 3 Billabong 16% 3 DC 7%

4 Volcom 12% 4 Hurley 10% Hurley 7%

5 Vans 9% Volcom 10% Rusty 7%

6 Ocean Pacif ic 6% 6 Rusty 6%

7 Hurley 3% Vans 6%

Tilt 3% 8 DC 3%

DC 3% Forum 3%

Kikw ear 3% Independent 3%

Tilt 3%

Fall 2004

Spring 2011

Fall 2002

Fall 2006

Fall 2008

Fall 2010



April 2011

Key Highlights: Brand Preferences – Boardsport Brands While Action Sports lifestyle sales continue to lag behind other areas of the broader apparel market, our survey demonstrates that many small brands make up this industry and brand proliferation, combined with an unbalanced exposure to housing impacted states, may be bigger versus a loss of interest in the lifestyle. We note teens continue to vote for Action Sports/Boardsport Brands, but note the ranking has fallen to No. 2. Due to the continued popularity of boardsport brands and the culture it represents, we carve out boardsport brands as a category in order to evaluate brands and associated spending trends. Please note our boardsport category excludes Action Sports retailers such as Pacific Sunwear, Zumiez, Sun Diego, etc. and looks specifically at the brands themselves. As mentioned above, Action Sports brands remain well entrenched in the teen lifestyle and culture, representing 8% of total votes, down from 13% in Fall 2010 and Spring 2010.

• In terms of Boardsport brands specifically, we note Volcom remained in the top spot with 22% share, up from 11% in the Fall and in line with the 22% total share last Spring. This survey also marks the seventh consecutive time that Volcom has been listed at the top of the category.

• Vans share increased to 11%, up from 6% in Fall 2010 and 10% in Spring 2010. This is Vans’ highest ranking in the history of our survey and is a strong indicator of the brand’s recent domestic success.

• Quiksilver’s share fell to 7% and the No. 5 ranking. However, the DC brand had a similar share and ranking which is an improvement over Fall 2010 and is at the highest level in our last six surveys. In addition, Roxy received a 4% share and the No. 8 ranking.

• LRG share climbed to a 15%, a new high for the brands, and remained in the No. 2 position.

• Given the relevance of this category and retailers’ desire to capture spending dollars from teens, we continue to see a heightened focus from Target, Kohl’s, Macy’s and J.C. Penney on the category. We note, Tony Hawk in Kohl’s, a dedicated Action Sports/Young Men’s departments within Macy’s, J.C. Penney’s RS by Sheckler, and Target’s Shaun White apparel line. We believe this is evidence that the category is far beyond the coastal beach towns of California and Florida and will continue to grow with additional distribution opportunities domestically and internationally.

Key Highlights: Brand Preferences – Fast Fashion

• As the fashion cycle has matured, teen girls are showing an increased propensity to purchase Fast Fashion items to complement and extend the life of their branded wardrobes.

• Collectively, Fast Fashion retailers (including Charlotte Russe, Forever 21, Wet Seal, H&M, Mango, rue21, and Zara) accounted for approximately 32% mindshare among teen girls surveyed, up from 29% in Fall and slightly down from 33% in Spring 2010 and above a seventeen survey average of 18%. The 32% share marks the second largest share capture in our survey history.

• The Fast Fashion share gains are impressive considering most Fast Fashion retailers do not advertise or use any marketing other than social media.

• With the proliferation of fashion blogs and increased editorial content in magazines that show average consumers how to dress like celebrities, teens are encouraged to be fashionably creative and stylish. We believe this has played into Fast Fashion’s success and is one of the reasons we do not see this trend slowing down. High end fashion

Clothing Brand Preferences – Fast Fashion


April 2011

designers support the Fast Fashion industry by collaborating with the retailers (i.e. Lanvin for H&M or Jil Sander for Uniqlo).

• Fast fashion retailers are typically preferred for their affordable pricing followed by their merchandise assortments. Aggressive discounting during the holiday ’08 and early Spring ’09 seasons created comparative pricing across branded and Fast Fashion retailers and may have limited the share capture by Fast Fashion companies.

• That being said, where value and immediacy in trend are paramount to the consumer purchase, Fast Fashion retailers continue to win share on an aggregated basis. From our survey, female students noted that fashion is a more important consideration than brand 76% of the time.

• For females, within the Fast Fashion category, Forever 21 was the most preferred with 22% share, up from 18% share in the Fall and 20% in Spring 2010. and 19%. H&M was No. 2 with the same sequential share 2% share as in the Fall. Wet Seal follows at No. 3 and Charlotte Russe placed at No. 4.

• It is interesting to note that Upper-Income females 32% share capture is 2ppt higher than average-income females’ 30% capture.

• Our 17-survey Fast Fashion average rose from 17% in the Fall and 16% last Spring to 18% this season.

Exhibit 57

UPPER- INCOME STUDENT SURVEY – FAST FASHION PREFERENCE

8%11%

13%

17%

12%

9%

14%

10%

14%

20%

16%

24%

16%

25%

33%

29%32%

0%

5%

10%

15%

20%

25%

30%

35%

17-survey average = 18%



April 2011

We track share concentration as a key indicator of potential inflections in spending patterns, particularly as it relates to the prospects of a return to a status brand cycle.

• In aggregate, results of our Spring 2011 survey suggest a second data point in a broader reversal in brand preference concentration. After a meaningful drop in concentration in Spring 2008 and Spring 2009, teens are beginning to return to brands also preferred by their peers – this has historically been an early signal of a return of the status cycle. The 48% share of the top five brands is relatively close to the 51% peak share in Spring 2007, Fall 2007, and Fall 2010.

• We call out the prior low in Spring 2004 where the top five brands accounted for 35%. This marked the beginning of a three year period of significant reinvestment into the fashion category, tied to a denim bottoms cycle. Brand concentration peaked in Fall 2007, approximately one to one and half years after the spending cycle peaked (Spring 2006).

We subdivide our upper-income student survey results into three primary regions: West/West Coast, Northeast/Mid-Atlantic, and Midwest. We continue to believe climates, seasonality, product availability (retailer penetration), and traditions create inherent variability in regional trends. West Coast and Northeast regions tend to be trend-leading areas with the Midwest a trend follower. That said, we often see wide variances in brand preferences and a growing correlation between leaders and laggards over time.

Clothing Brand Preferences – Brand Concentration

Exhibit 58

UPPER- INCOME STUDENT SURVEY – CLOTHING PREFERENCE CONCENTRAT ION All Students

Top 5 Top 4 Top 3Fall 2001 39% 34% 29%Fall 2002 47% 42% 33%Spring 2003 47% 42% 33%Fall 2003 43% 38% 31%Spring 2004 35% 30% 25%Fall 2004 43% 39% 33%Spring 2005 47% 40% 32%Fall 2005 45% 41% 32%Spring 2006 48% 44% 35%Fall 2006 47% 41% 33%Spring 2007 51% 45% 37%Fall 2007 51% 45% 37%Spring 2008 43% 39% 33%Fall 2008 47% 43% 36%Spring 2009 41% 35% 30%

Fall 2009 46% 39% 31%

Spring 2010 47% 40% 32%

Fall 2010 51% 44% 35%

Spring 2011 48% 41% 34%


Clothing Brand Preferences – By Geographic Region


April 2011

Exhibit 59

UPPER- INCOME STUDENT SURVEY – CLOTHING BRAND PREFERENCES , BY GEOGRAPHY

Rank Brand % Total Rank Brand % Total Rank Brand % Total

1 Action Sports Brands 11% 1 Nike 18% 1 Nike 16%

2 Forever 21 10% 2 Forever 21 10% 2 Polo Ralph Lauren 12%

3 Nike 9% 3 Action Sports Brands 9% 3 American Eagle 11%

4 Nordstrom 9% 4 American Eagle 6% 4 Forever 21 10%

5 American Eagle 7% 5 The Buckle 6% 5 Action Sports Brands 6%


1 Action Sports Brands 21% 1 Nike 19% 1 American Eagle 12%

2 Nike 10% 2 Action Sports Brands 11% 2 Forever 21 11%

3 American Eagle 7% 3 Forever 21 10% 3 Nike 9%

Hollister 7% 4 American Eagle 9% 4 Hollister 7%

5 Nordstrom 7% 5 The Buckle 6% 5 Action Sports Brands 7%


1 Action Sports Brands 22% 1 Action Sports Brands 14% 1 Forever 21 14%

2 Nike 7% 2 Nike 12% 2 American Eagle 10%

3 Nordstrom 6% 3 Hollister 10% 3 Action Sports Brands 9%

4 Forever 21 4% 4 American Eagle 6% 4 Nike 8%

Hollister 4% 5 Forever 21 5% 5 Hollister 6%


1 Action Sports Brands 19% 1 Action Sports Brands 14% 1 Forever 21 20%

2 Nike 12% 2 Hollister 10% 2 American Eagle 9%

3 Hollister 6% 3 American Eagle 7% 3 Action Sports Brands 9%

4 Nordstrom 6% 4 Forever 21 6% 4 Nike 7%

5 American Eagle 5% Nike 6% 5 Urban Outf itters 5%


1 Action Sports Brands 21% 1 Hollister 16% 1 Hollister 12%

2 Forever 21 7% 2 Action Sports Brands 13% 2 American Eagle 8%

3 Nike 7% 3 Nike 7% 3 Forever 21 6%

4 Urban Outf itters 5% 4 Abercrombie & Fitch 5% 4 Nike 5%

5 Nordstrom 5% Aeropostale 5% Action Sports Brands 5%

American Eagle 5%


1 Action Sports Brands 32% 1 Hollister 16% 1 Forever 21 17%

2 Nordstrom 7% 2 Action Sports Brands 14% 2 Action Sports Brands 12%

3 Forever 21 5% 3 American Eagle 9% 3 Abercrombie & Fitch 7%

4 Nike 5% 4 Nike 5% American Eagle 7%

5 American Eagle 4% 5 Forever 21 4% 5 Hollister 7%


1 Action Sports Brands 24% 1 Hollister 21% 1 American Eagle 10%

2 Nordstrom 8% 2 American Eagle 9% 2 Action Sports Brands 9%

3 Hollister 6% 3 Action Sports Brands 8% 3 Forever 21 6%

4 American Eagle 5% 4 Abercrombie & Fitch 7% Hollister 6%

Nike 5% 5 Aeropostale 5% 5 Abercrombie & Fitch 4%


1 Action Sports Brands 29% 1 Hollister 21% 1 Forever 21 13%

2 Hollister 10% 2 American Eagle 11% 2 Abercrombie & Fitch 10%

3 Nordstrom 6% 3 Abercrombie & Fitch 9% 3 American Eagle 10%

4 Nike 5% 4 Action Sports Brands 6% Hollister 10%

5 Abercrombie & Fitch 4% 5 Nike 5% Action Sports Brands 10%

American Eagle 4%

Spring 2008

Midwest Northeast/Mid-Atlantic

Spring 2008

Fall 2007

Spring 2008

Fall 2009

Spring 2010

Fall 2010 Fall 2010

West

Fall 2008

Spring 2009

Fall 2009

Fall 2008

Fall 2007

Fall 2009


Spring 2011 Spring 2011 Spring 2011

Fall 2010

Fall 2008


Fall 2007



April 2011

Key Highlights – Clothing Brand Preferences, By Geographic Region

• When comparing results across regions, we note the similarity in brand preference.

• Nike, Action Sports Brand, Forever 21, and American Eagle appeared among the top five in all three regions.

• Each region had one unique retailer in the top five: Nordstrom in the West, The Buckle in the Midwest, and Polo Ralph Lauren in the Northeast.

• Polo Ralph Lauren was the highest ranked of these regionally preferred brands, capturing the No. 2 position in the Northeast without having been in the top five in any region since Fall 2007 (when we began recording this information). Polo Ralph Lauren replaced Hollister from a year ago Spring, possibly indicating a trend shift back to classic preppy.

• Nordstrom continues to be uniquely preferred in the West region. For the seventh consecutive survey, the premium department store was included in the top five in the West (No. 5, 9%) but did not appear in either the Midwest or Northeast. Similarly, The Buckle appeared in the top five in the Midwest (No. 5, 9%) for the second straight season but not in the West or the Northeast.

• Historically, concentration among top five brands tends to be higher in the Midwest and West. This survey cycle, the Northeast was the highest at 54% compared to last season’s 46%. The Midwest demonstrated 49% concentration against last season’s 55% and the West had the lowest brand concentration at 46% versus the Fall’s 52%. The weakness in the West can probably be rationalized through our lower survey turnout (which explains the significant Action Sports Brands decline of 10ppt). This compares to Spring 2010 results of Northeast and Midwest at 47% share and West at 43%. The higher the concentration, the more similarly teens are dressing like their peers while lower concentrations signal teens demonstrating more variability in their fashion brand preferences.

• We note, in particular, the disparity in share capture by the No. 1 brands in certain regions, which accounted for a significant portion of the dispersion in concentration. In the Midwest, Nike captured 9ppt more than its No. 3 brand ranking in the West (9% share). Whereas Action Sports Brands captured an 11% share at No. 1 in the West, the brand captured a lower share (6%) at the No. 5 position in the Northeast. Interestingly, Forever 21 carried the same share (10%) across all three regions, which probably speaks to its popularity and mainstream fashion aesthetics.


April 2011

• West Coast teens remained true to their heritage for yet another season, with Action Sports Brands commanding the No. 1 mindshare position for the 17th survey iteration in a row and in 18 of the last 19 survey periods.

• Within the Action Sports Brands grouping, we include boardsport and active lifestyle brands, many of which are rooted in West Coast culture, surf & skate, motocross, and related music.

• At 11% share, the category (Action Sports Brands) is off from its Fall 2008 peak of 32% share, down from Spring 2010 and Fall 2010 at 21%.

• With respect to concentration, the top five brands accounted for 46% mindshare in the region, down from 52% in Fall but up from 43% in Spring 2010. The variance in concentration from the sequential period (6ppt) is due primarily to a 10ppt loss for Action Sports Brand and a 2ppt gain for both Nike and Nordstrom.

• Most notably in the West, Forever 21 made it back on the top five brands for the West region after a three season absence, which was interesting due to the California origins (and high West Coast store concentration) of the brand. Forever 21 bumped Hollister out of the top five.

• American Eagle continues to hold a top five ranking in the West (No. 5, 7% share). While its 7% share count has held constant for the past three survey iterations, American Eagle’s ranking fell 2ppt. American Eagle is a Mid-Atlantic/Northeast brand and its West Coast performance shows its fashion range.

Exhibit 60

UPPER- INCOME STUDENT SURVEY – CLOTHING BRAND PREFERENCES , WEST




2 Forever 21 10% 2 Nike 10% 2 Nike 10% 2 Nike 7%

3 Nike 9% 3 American Eagle 7% 3 American Eagle 7% 3 Nordstrom 6%

4 Nordstrom 9% Hollister 7% Hollister 7% 4 Forever 21 4%

5 American Eagle 7% 5 Nordstrom 7% 5 Nordstrom 7% Hollister 4%




2 Forever 21 7% 2 Nordstrom 7% 2 Nordstrom 8% 2 Hollister 10%

3 Nike 7% 3 Forever 21 5% 3 Hollister 6% 3 Nordstrom 6%

4 Urban Outfitters 5% 4 Nike 5% 4 American Eagle 5% 4 Nike 5%

5 Nordstrom 5% 5 American Eagle 4% Nike 5% 5 Abercrombie & Fitch 4%

American Eagle 4%




2 Hollister 11% 2 Abercrombie & Fitch 6% 2 Nordstrom 8% 2 Nordstrom 10%

3 Abercrombie & Fitch 8% Nordstrom 6% 3 Abercrombie & Fitch 7% 3 American Eagle 7%

4 Nordstrom 7% 4 Polo Ralph Lauren 5% 4 American Eagle 5% 4 Hollister 6%

5 Nike 6% 5 American Eagle 4% 5 Hollister 5% Abercrombie & Fitch 6%

Nike 4% 6 d.e.m.o. 3%

Kohl's 3%




2 Hollister 6% 2 Nordstrom 8% 2 Abercrombie & Fitch 11% 2 Abercrombie & Fitch 10%

Nordstrom 6% 3 American Eagle 6% 3 Nordstrom 10% 3 Nordstrom 9%

Urban Outfitters 6% Abercrombie & Fitch 6% 4 American Eagle 4% 4 American Eagle 7%

5 Abercrombie & Fitch 5% 5 Gap 4% d.e.m.o. 4% 5 Name Withheld 3%

Gap 5% Hollister 4% Hollister 3%



1 Action Sports Brands 20% 1 Abercrombie & Fitch 14% 1 Action Sports Brands 13%

2 Abercrombie & Fitch 14% 2 Action Sports Brands 7% 2 Abercrombie & Fitch 8%

3 Polo Ralph Lauren 8% 3 Old Navy 6% 3 Fubu 4%

4 Name Withheld 5% 4 Nike 5% Anchor Blue 4%

Gap 5% 5 Gap 5% Guess 4%

6 Old Navy 3% Polo Ralph Lauren 5% Old Navy 4%

Name Withheld 4%

Fall 2004

Fall 2002


Fall 2006

Fall 2008



April 2011

• Rounding out the top ten brands in the Western region were Abercrombie & Fitch (No. 6, 3% share) and Levis, Kohl’s, and Macy’s (sharing No. 7, 2% share).

• Because of the strength in the Action Sports Brands category in the Western region, we have provided a more in-depth look as to the key brands/retailers garnering share.

• Action Sports Brands (as a group) commanded 11% mindshare in the Western region.

• Vans ranked No. 2 with 13% share, its largest share capture to-date and a 3ppt increase from Spring 2010 (No. 3 (tied), 10% share).

• Former No. 1 Pacific Sunwear slipped to the No. 3 position with a 9% share, significantly down from its 21% capture in both Fall and Spring 2010. While Pacific Sunwear has remained among the top preferred destinations for teens in the West since we started segmenting our survey responses by category, we do note that the retailer has become more “fashion” Action Sports.

• Volcom (7% share) was ranked No. 3 in Fall 2010 (7% share) despite dropping 12ppt from its No. 2 and 19% share in Spring 2010. In our Spring 2011 cycle, Volcom tied for sixth with seven other brands/retailers and is Volcom’s lowest share capture since we started tracking Action Sports Brands by region (9 survey periods).

• Zumiez and Quiksilver were both part of the group tied for No. 6.

• We note Anchor Blue filed bankruptcy in December and is no longer operating stores, but Perry Ellis did purchase the intellectual property assets in March.

Exhibit 61

UPPER- INCOME STUDENT SURVEY – ACT ION SPORTS BRAND PREFERENCES , WEST


Rank Brand % AS % Total Rank Brand % AS % Total Rank Brand % AS % Total Rank Brand % AS % Total

1 Name Withheld 30% 3% 1 Pacif ic Sunw ear 21% 4% 1 Pacif ic Sunw ear 21% 5% 1 Pacif ic Sunw ear 15% 3%

2 Vans 13% 1% 2 Name Withheld 12% 3% 2 Volcom 19% 4% 2 Volcom 11% 2%

3 Pacific Sunw ear 9% 1% 3 Volcom 7% 2% 3 Quiksilver 10% 2% 3 Quiksilver 9% 2%

LRG 9% 1% 4 Zumiez 6% 1% Vans 10% 2% 4 Hurley 7% 1%

Anchor Blue 9% 1% 5 RVCA 5% 1% 5 Sun Diego 7% 2% Vans 7% 1%

7 brands tied for 6th place Obey 5% 1% 6 LRG 5% 1% 6 Gen X 6% 1%

Quiksilver 5% 1% Name Withheld 5% 1% Name Withheld 6% 1%

2 brands tied for 8th place 10 brands tied for 8th place 7 brands tied for 8th place

Action Sports 100% 11% Action Sports 100% 21% Action Sports 100% 22% Action Sports 100% 19%


Rank Brand % AS % Total Rank Brand % AS % Total Rank Brand % AS % Total Rank Brand % AS % Total

1 Pacific Sunw ear 37% 8% 1 Volcom 42% 10% 1 Volcom 42% 10% 1 Sun Diego 16% 5%

2 Volcom 19% 4% 2 DC 12% 3% 2 DC 12% 3% Volcom 16% 5%

3 LRG 7% 2% Quiksilver 12% 3% Quiksilver 12% 3% 3 Pacif ic Sunw ear 14% 4%

RVCA 11% 2% 4 Sun Diego 8% 2% 4 Sun Diego 8% 2% 4 Name Withheld 10% 3%

Name Withheld 7% 2% 5 Element 4% 1% 5 Element 4% 1% 5 DC 8% 2%

6 One Industries 4% 1% Hurley 4% 1% Hurley 4% 1% Quiksilver 8% 2%

Quiksilver 4% 1% LRG 4% 1% LRG 4% 1% 7 Billabong

Sun Diego 4% 1% O'Neill 4% 1% O'Neill 4% 1% Surf Ride

Unit (BMX) 4% 1% Pacif ic Sunw ear 4% 1% Pacif ic Sunw ear 4% 1% Vans

Univ 4% 1% RVCA 4% 1% RVCA 4% 1% 9 brands tied for 10th place

Zumiez 4% 1% Zumiez 4% 1%

Action Sports 100% 21% Action Sports 100% 24% Action Sports 100% 24% Action Sports 100% 29%

Spring 2007

Rank Brand % AS % Total

1 Pacific Sunw ear 25% 5%

2 Billabong 11% 2%

Hurley 11% 2%

Quiksilver 11% 2%

Name Withheld 11% 2%

6 Zumiez 7% 1%

7 brands tied for 7th place

Action Sports 100% 20%


Spring 2008



April 2011

• By region, we have observed the most variability in brand preferences in the Midwest but note recent surveys indicate stability in top five brands (all repeats from Fall with one difference in Spring 2010).

• Nike commanded the No. 1 position with 18% share, slightly down to Fall 2010’s 19%, and 6ppt greater than a year ago Spring’s 12% share. Nike grabbed the No. 1 this past Fall for the first time ever in our 19 period regional survey history.

• Hollister did not make it back into the top five brand preference in the Midwest after being displaced last survey cycle. The brand has gradually ceded share since Spring 2009: after ten surveys at the No. 1 position, beginning in Fall 2004, Hollister moved to No. 2 in Fall 2009, No. 3 in Spring 2010, and No. 6 in both the Fall and in our current survey.

• The remaining brands in the top ten in the Midwest were: Hollister (No. 6, 3% share), Urban Outfitters (No. 7, 3%), and Gap, Polo Ralph Lauren, and Macy’s (tied at No. 8, 2%).

Exhibit 62

UPPER- INCOME STUDENT SURVEY – CLOTHING BRAND PREFERENCES , MIDWEST



1 Nike 18% 1 Nike 19% 1 Action Sports Brands 14% 1 Action Sports Brands 14%

2 Forever 21 10% 2 Action Sports Brands 11% 2 Nike 12% 2 Hollister 10%

3 Action Sports Brands 9% 3 Forever 21 10% 3 Hollister 10% 3 American Eagle 7%

4 American Eagle 6% 4 American Eagle 9% 4 American Eagle 6% 4 Forever 21 6%

5 The Buckle 6% 5 The Buckle 6% 5 Forever 21 5% Nike 6%




2 Action Sports Brands 13% 2 Action Sports Brands 14% 2 American Eagle 9% 2 American Eagle 11%

3 Nike 7% 3 American Eagle 9% 3 Action Sports Brands 8% 3 Abercrombie & Fitch 9%

4 Abercrombie & Fitch 5% 4 Nike 5% 4 Abercrombie & Fitch 7% 4 Action Sports Brands 6%

Aeropostale 5% 5 Forever 21 4% 5 Aeropostale 5% 5 Nike 5%

American Eagle 5%




2 American Eagle 14% 2 American Eagle 12% 2 American Eagle 16% 2 Abercrombie & Fitch 13%

3 Abercrombie & Fitch 10% 3 Abercrombie & Fitch 9% 3 Abercrombie & Fitch 8% 3 American Eagle 10%

4 Action Sports Brands 6% 4 Action Sports Brands 8% 4 Action Sports Brands 6% 4 d.e.m.o. 5%

5 Forever 21 4% 5 Kohl's 5% 5 Hot Topic 4% Action Sports Brands 5%




2 Abercrombie & Fitch 14% 2 Forever 21 11% 2 Hollister 7% 2 Hollister 11%

3 d.e.m.o. 5% 3 Hollister 10% 3 d.e.m.o. 7% 3 Name Withheld 10%

Action Sports Brands 5% 4 buckle 9% 4 Gap 6% 4 Forever 21 7%

6 brands tied for 5th 5 Action Sports Brands 7% 5 Name Withheld 4% Action Sports Brands 7%



1 Abercrombie & Fitch 11% 1 Abercrombie & Fitch 22% 1 Abercrombie & Fitch 14%

2 Hollister 8% 2 American Eagle 9% 2 Name Withheld 11%

3 Name Withheld 8% 3 Wet Seal 7% 3 Wet Seal 8%

4 Banana Republic 7% 4 Name Withheld 6% 4 American Eagle 6%

5 Polo Ralph Lauren 5% 5 The Buckle 5% 5 Gap 6%

Nike 5%

Spring 2011

Fall 2002

Fall 2006

Fall 2004

Fall 2010

Fall 2008



April 2011

• For teens in the Northeast/Mid-Atlantic region, American Eagle fell to No. 3 (11% share) from its No. 1 position (12%) share in the Fall but only gave up 1ppt. American Eagle has been able to support itself in the Northeast region for the past eight survey cycles (four years).

• Similar to the Midwest, Nike was the No. 1 preferred brand in the Northeast/Mid-Atlantic region with a 16% share, rising a substantial 7ppt from Fall (No. 3, 9% share). Last Spring, Nike was ranked No. 4 with an 8% share. The rising popularity of Nike in different regions is a strong statement to the brand’s marketing and product efforts.

• On a sequential basis, the most notable change among the top five brands besides Action Sports maintaining its No. 5 rank (6% share, down slightly from 7% in the Fall), is Polo Ralph Lauren’s jump to No. 2 from No. 6 and doubling its share from 6% to 12%.

• Also absent for the fifth survey in a row is Abercrombie & Fitch, which ranked No.11 at 2% share, lower than its No. 6 and 3% share but higher than its No. 12 position at 2% share from last Spring. While Abercrombie & Fitch shares the same preppy look of Polo Ralph Lauren, the price points are becoming more divergent and the survey results points toward higher spending in this region.

• When looking at concentration, the top five brands accounted for 54% share, up from 46% share in the Fall and 47% in Spring 2010. Nike and Polo Ralph Lauren were 28%

Exhibit 63

UPPER- INCOME STUDENT SURVEY – CLOTHING BRAND PREFERENCES , NORTHEAST



1 Nike 16% 1 American Eagle 12% 1 Forever 21 14% 1 Forever 21 20%

2 Polo Ralph Lauren 12% 2 Forever 21 11% 2 American Eagle 10% 2 American Eagle 9%

3 American Eagle 11% 3 Nike 9% 3 Action Sports Brands 9% 3 Action Sports Brands 9%

4 Forever 21 10% 4 Hollister 7% 4 Nike 8% 4 Nike 7%

5 Action Sports Brands 6% 5 Action Sports Brands 7% 5 Hollister 6% 5 Urban Outfitters 5%



1 Hollister 12% 1 Forever 21 17% 1 American Eagle 10% 1 Forever 21 13%

2 American Eagle 8% 2 Action Sports Brands 12% 2 Action Sports Brands 9% 2 Abercrombie & Fitch 10%

3 Forever 21 6% 3 Abercrombie & Fitch 7% 3 Forever 21 6% 3 American Eagle 10%

4 Nike 5% American Eagle 7% Hollister 6% Hollister 10%

Action Sports Brands 5% 5 Hollister 7% 5 Abercrombie & Fitch 4% Action Sports Brands 10%



1 Hollister 10% 1 Hollister 20% 1 Abercrombie & Fitch 22% 1 Abercrombie & Fitch 19%

2 Abercrombie & Fitch 8% 2 Urban Outf itters 12% 2 Hollister 20% 2 Hollister 9%

Forever 21 8% 3 Abercrombie & Fitch 10% 3 Nordstrom 10% Macys Inc. 9%

4 American Eagle 7% 4 Guess 7% 4 Aeropostale 5% Action Sports Brands 9%

Nordstrom 7% Nordstrom 7% Anthropologie 5% 5 Polo Ralph Lauren 7%

Action Sports Brands 7% Urban Outf itters 5%




1 Hollister 22% 1 Guess 15% 1 Abercrombie & Fitch 15% 1 Abercrombie & Fitch 15%

2 Abercrombie & Fitch 12% Abercrombie & Fitch 15% 2 American Eagle 12% 2 Action Sports Brands 8%

3 d.e.m.o. 10% 3 Hollister 13% 3 Name Withheld 8% 3 Guess 5%

4 American Eagle 7% d.e.m.o. 13% 4 Hollister 6% Name Withheld 5%

Name Withheld 7% 5 Name Withheld 5% 5 Guess 5% American Eagle 5%

Guess 7% Kohl's 5%

Action Sports Brands 7% Mandees 5%



1 American Eagle 14% 1 Abercrombie & Fitch 18% 1 Abercrombie & Fitch 14%

2 Abercrombie & Fitch 13% 2 American Eagle 7% 2 Banana Republic 8%

3 Guess 9% 3 Name Withheld 7% 3 Name Withheld 7%

4 Action Sports Brands 8% 4 Gap 6% 4 American Eagle 6%

5 d.e.m.o. 7% 5 d.e.m.o. 5% 5 Gap 4%

6 Name Withheld 6% Action Sports Brands 5%

Fall 2006

Fall 2010

Fall 2008

Fall 2004

Spring 2011

Fall 2002



April 2011

of the concentration, higher than the Fall’s 23% and year ago Spring’s 24% but roughly equal to Nos. 3-5’s 26% concentration.

• Rounding out the top ten preferred brands in the Northeast were: Nordstrom (No. 6, 3%), Hollister and Kohl’s (tied No. 7, 3%), and Urban Outfitters (No. 10, 2%).

Similar to the apparel preference survey, we ask students to list their favorite footwear brands in order of preferences. We tally the top choices and rank brands according to the number of mentions across the group.

Footwear Brand Preferences – All Students


April 2011

Exhibit 64

UPPER- INCOME STUDENT SURVEY – FOOTWEAR BRAND PREFERENCES , ALL STUDENTS



1 Nike 42% 1 Nike 39% 1 Nike 42% 1 Nike 35%

2 Vans 7% 2 Vans 10% 2 Vans 10% 2 Vans 7%

3 UGG Australia 5% 3 Steve Madden 4% 3 UGG Australia 5% 3 Steve Madden 5%

4 Steve Madden 3% 4 Converse 4% 4 Converse 5% 4 UGG Australia 5%

5 DSW 3% 5 DSW 3% 5 Steve Madden 3% 5 Converse 4%

6 Converse 3% UGG Australia 3% 6 Puma 3% 6 Puma 3%

7 Nordstrom 2% 7 Adidas 3% 7 Adidas 2% 7 Adidas 3%

TOMS 2% 8 Journeys 2% 8 Foot Locker 2% 8 Payless 2%

9 Payless 2% 9 Payless 2% DC Shoes 2% 9 DC Shoes 2%

Adidas 2% 10 Nordstrom 2% 10 ALDO 1% Journeys 2%




2 UGG Australia 7% 2 Vans 6% 2 UGG Australia 5% 2 Steve Madden 7%

3 Vans 7% 3 Steve Madden 6% 3 Steve Madden 5% 3 Adidas 6%

4 Puma 5% 4 Converse 5% 4 Adidas 5% 4 Puma 5%

5 Steve Madden 4% 5 Adidas 4% 5 Puma 4% 5 Vans 4%

6 Foot Locker 4% 6 Puma 4% 6 Vans 3% 6 Foot Locker 3%

7 Converse 4% 7 Rainbow 3% 7 Foot Locker 3% 7 Coach 2%

8 Adidas 3% 8 UGG Australia 3% 8 Converse 2% 8 DC Shoes 2%

Journeys 3% 9 Journeys 2% 9 DSW 2% 9 Rainbow 2%

10 Payless 2% 10 Payless 2% 10 New Balance 2% 10 Payless 2%

Payless 2%




2 Steve Madden 10% 2 Steve Madden 7% 2 Steve Madden 11% 2 Steve Madden 10%

3 Puma 7% 3 Adidas 5% 3 Adidas 7% 3 Adidas 6%

4 Adidas 6% Puma 5% 4 Converse 4% 4 Converse 4%

5 DSW 4% 5 Vans 4% 5 Puma 3% 5 Puma 4%

6 Vans 3% 6 Nordstrom 3% Vans 3% 6 Vans 3%

7 Converse 3% 7 Converse 2% 7 Bakers 3% 7 New Balance 3%

Nordstrom 3% K. Sw iss 2% 8 DC Shoes 2% 8 DC Shoes 3%

9 Payless 2% 9 DC Shoes 2% 9 K Sw iss 2% 9 Journeys 2%

10 Journeys 2% 10 New Balance 2% 10 Payless Shoes 2% 10 Reebok 2%

Reebok 2% Bakers 2%





3 Converse 5% 3 Adidas 6% 3 Adidas 9% 3 Adidas 7%

4 Puma 4% 4 Journeys 5% 4 New Balance 5% 4 Skechers 3%

5 Reebok 4% 5 Converse 5% 5 Foot Locker 2% 5 Bakers 3%

6 Adidas 3% 6 New Balance 3% 6 Diesel 2% 6 Vans 3%

7 Journeys 3% 7 Bakers 3% 7 Bakers 2% 7 Nordstrom 3%

8 Foot Locker 3% Foot Locker 3% Puma 2% 8 Aldo 2%

9 Aldo 2% 9 Vans 3% 9 Converse 2% K-Sw iss 2%

Birkenstock 2% 10 Aldo 2% Nine West 2% Converse 2%

Nordstrom 2%

Vans 2%

Spring 2003

Rank Brand % Total Rank Brand % Total

1 Nike 23% 1 Nike 29%

2 Steve Madden 12% 2 Steve Madden 13%

3 Adidas 7% 3 Adidas 9%

4 Nine West 4% 4 New Balance 3%

Skechers 4% 5 K-Sw iss 3%

6 K-Sw iss 3% 6 Puma 2%

Birkenstock 3% 7 DC Shoes 2%

8 Converse 3% Skechers 2%

9 Vans 2% 9 Birkenstock 2%

DC Shoes 2% Converse 2%


Fall 2002

Fall 2004

Fall 2006

Fall 2008



April 2011

Key Highlights – Footwear Brand Preferences, All Students

• For the 18th iteration of our survey (since we began including questions related to footwear brands), teens in our upper-income student survey overwhelmingly picked Nike as their No. 1 preferred footwear brand with 42% of the vote. This level is up from 39% from the Fall, equal to 42% last Spring, and up from 35% in Fall 2009, 33% in Spring 2009, 28% in Fall 2008, and 31% in Spring 2008. The 3ppt gain this Spring can be traced to a 6ppt gain in male preference for Nike this season. No other category within our survey has had one single brand dominate the No. 1 position as long or to the level of share that Nike has achieved among teens with respect to their footwear brand preferences. Almost one out of every two teens lists Nike as their favorite footwear brand. Clearly, this is a testament to the company’s heritage in the technical and performance-based athletic footwear category but also to the iconic nature of Nike’s vintage fashion items, sport celebrities, and broad channel distribution. We highlight that of the students who identified Nike as their favorite footwear brand, about 40% mentioned a specific product or sub-brand, such as Nike Air Jordan, Nike Air Force 1, or Nike Dunks – all three which are retro versions of once-popularized performance athletic shoes. Other products mentioned included Nike Shox and Nike Skate.

• At 42% share, Nike trumped the No. 2 brand Vans by an approximate multiple of 6x and achieved more share than the combined total of the next ten brands. Vans’ share fell on a sequential and year-over-year basis from 10% to 7% to capture the second position but matched 2009 levels.

• UGG Australia moved higher in the rankings to No. 3 (5%) from its prior period No. 5 (3%) position. Since it first appeared in the top ten preferred footwear survey back in Spring 2008, UGG Australia has exhibited volatile movement on a sequential basis (up-down-up-down) and tends to rank higher in the Spring survey (possibly from the March survey following on the heels of Winter).

• All five brands from Spring 2010 and Fall 2010 carried over into the current Spring 2011 survey: Nike, Vans, Steve Madden, UGG Australia, and DSW, with the exclusion of Converse (No. 4, 4% share in the Fall to No. 6, 3% share this season). DSW has not made the top ten Upper-Income preferred footwear list since Spring 2008 (two and a half years ago) and has never achieved back-to-back top five status until now.

• Concentration among the top five brands totaled 60% share, down from 63% share in Fall 2010, and 64% in Spring 2010. The decrease relative to the Fall is due to a tie at No. 5 between DSW and UGG Australia. The decrease from last Spring is due to the 3ppt loss by Vans and a smaller Steve Madden share (No. 4, 3%) compared to Converse (No. 4, 5%). Share concentration among the Nos. 2-5 brands was largely consistent with prior periods.

• A notable mover into the top ten was TOMS shoes, which ranked No. 21 (1%) in the Fall survey but now is tied for No. 7 with Nordstrom. We’ve noticed positive reaction to the TOMS brand during our high school tours. TOMS has been expanding distribution and collaborating with outside designers (i.e. this Fall, the brand will be collaborating with Mary Kate and Ashley Olsen’s The Row for TOMS + The Row cashmere-blend slip-on). We note students are aware of the TOMS One for One mission of providing a pair of new shoes to a child in need with every purchase.

• Journeys (No. 11, 2%) did not repeat its top ten appearance from the Fall (No. 8, 2%). The retailer had maintained steady rank over three of the last four survey iterations. Journeys carries essentially all brands included in our top ten, with the exception of retailers Foot Locker and ALDO, and remain the leading destination targeted specifically toward teen footwear.


April 2011

• The bulk of the top ten brands besides TOMS entry and Journeys exit remained the same from Fall. We still remain intrigued by the inclusion of DSW and Payless, which represent off-price shoe retailers.

• With Nike at 42% and the vulcanized canvas trend at 10% share, over half of all footwear preferred by teens is either Nike branded or low-profile styled. We think the low-profile designs tie back to the strength in the Action Sports Brands category in apparel.

In the following exhibits, we segment our footwear brand preferences dataset by gender. Females tend to spend more per year on footwear-related items than males. In addition, females tend to shop more frequently for footwear. We expect both of these differences to be evident in brand preference results.

Footwear Brand Preferences – By Gender

Exhibit 65

UPPER- INCOME STUDENT SURVEY – FOOTWEAR BRAND PREFERENCES , FEMALE





3 Steve Madden 7% 3 Vans 7% 3 Vans 8% 3 UGG Australia 9%

4 DSW 7% 4 UGG Australia 7% 4 Converse 8% 4 Converse 7%

5 Vans 5% DSW 7% 5 Steve Madden 5% 5 Vans 5%

6 TOMS 4% 6 Converse 6% 6 Coach 2% 6 DSW 4%

Nordstrom 4% 7 Payless 4% DSW 2% 7 Nordstrom 3%

8 Converse 4% 8 Journeys 4% Foot Locker 2% 8 Journeys 3%

9 Payless 4% 9 Nordstrom 4% Journeys 2% 9 Payless 3%

10 Journeys 3% 10 Sperry Top-Sider 3% 10 ALDO 2% 10 Coach 3%

Bakers 2%

Puma 2%





3 Steve Madden 8% 3 Converse 7% 3 Steve Madden 9% 3 Coach 5%

4 Converse 4% 4 Rainbow 6% 4 DSW 5% 4 Puma 4%

5 Journeys 4% 5 Vans 5% 5 Payless 4% 5 Payless 4%

6 Puma 4% 6 UGG Australia 5% 6 Puma 4% 6 Rainbow 4%

Vans 4% 7 Payless 4% 7 Coach 3% 7 DSW 3%

8 Payless 3% 8 Journeys 3% 8 Converse 3% Journeys 3%

9 ALDO 3% 9 Nordstrom 3% 9 Nordstrom 3% Old Navy 3%

Nordstrom 3% 10 DSW 3% Rainbow 3% 10 Foot Locker 3%

Puma 3%





Prada 8% 3 Puma 7% 3 Bakers 6% 3 Converse 5%

4 DSW 6% 4 Nordstrom 5% 4 Converse 5% 4 Journeys 4%

5 Nordstrom 4% 5 Converse 3% 5 Adidas 4% 5 Bakers 4%

6 Payless 4% 6 Adidas 3% 6 Payless 4% Puma 4%

7 Converse 3% Payless 3% 7 Puma 4% Adidas 4%

8 Journeys 3% Rainbow 3% 8 Nordstrom 3% 8 DSW 3%

9 Adidas 3% UGG Australia 3% 9 Aldo 3% Payless 3%

Vans 3% 10 3 brands tied for 10th place 10 Rainbow 3% 10 Nine West 3%

Nordstrom 3%

Spring 2005

Rank Brand % Total

1 Steve Madden 15%

2 Nike 9%

3 Converse 6%

4 Puma 5%

5 Journeys 5%

6 Aldo 4%

7 Payless 4%

8 Birkenstock 3%

9 DSW 3%

10 Reebok 3%

Spring 2011

Fall 2008

Fall 2010

Fall 2006



April 2011

Key Highlights: Footwear Brand Preferences – Female

• Nike’s strength was supported by a No. 1 rank and 14% share among females, flat to Fall but down from its 26% share in Spring 2010. The brand has ranked at the top for girls since Fall 2007.

• Most notable among top brands are UGG Australia and Vans, in our view. UGG Australia gained 3ppt to 10% from 7% in the Fall and jumped from the No. 4 rank to No. 2 this season. Vans, a VF Corporation brand, lost 2ppt share from Fall 2010 and 3ppt from Spring 2010; overall, Vans has been in the top ten preferred footwear list for females the last 2-3 years.

• With the top five brands repeating from the Fall, the only difference is the preference order: Nike remains the most preferred brand, UGG Australia rose to No. 2 from No. 4, Steve Madden lost a rank and share (No. 3 and 9% from prior No. 2 and 7%), DSW held its 7% share from the Fall and rose 1 spot to No. 4, and Vans shifted from No. 3 (7%) to No. 5 (5%) this Spring. The brand preferences include a broad-based style representation of sport (Nike), fashion (Steve Madden and UGG Australia), casual (Vans) and off-price (DSW).

• Missing from the top ten when compared to the prior season was Sperry Top-Sider (No. 16, 2%), which ranked higher in the male survey (No. 9). Missing from the prior Spring were Coach, Foot Locker, Journeys, ALDO, Bakers, and Puma.

• We note the popularity of Nordstrom for female teen shoes, which has been in our top ten list 10 out of 13 surveys. No other department store (i.e. Bloomingdales, Lord and Taylors, Belk, etc.) ranks this highly among female teens.

• Looking at concentration, the top five brands accounted for approximately 44% share, flat to Fall although well below the 58% share in Spring 2010, the 48% share in Fall 2009 and 52% share in Spring 2009. This compares to concentration among the top five brands in men’s at 81%. Brand preference among females is much less concentrated, suggesting that females tend to purchase brands across various styles and wardrobe intentions – dress, casual, performance, athletic, and crossover. The lack of concentration on a relative basis is linked primarily to the degree to which Nike commands share among males (66% among males versus 14% among females).


April 2011

Exhibit 66

UPPER- INCOME STUDENT SURVEY – FOOTWEAR BRAND PREFERENCES , MALE





3 Adidas 3% 3 Adidas 3% 3 Adidas 3% 3 Puma 4%

4 DC Shoes 2% 4 Converse 2% 4 Puma 3% 4 Adidas 4%

5 Converse 2% 5 Finish Line 2% 5 DC Shoes 3% 5 DC Shoes 3%

Puma 2% 6 New Balance 2% 6 Foot Locker 2% Foot Locker 3%

7 Finish Line 1% DC 2% 7 Converse 2% 7 Asics 2%

8 Foot Locker 1% 8 Puma 1% 8 New Balance 1% 8 Converse 2%

9 Sperry Top-Sider 1% 9 Asics 1% Reebok 1% 9 Reebok 1%

New Balance 1% Under Armour 1% Skechers 1% 10 Sperry Top-Sider 1%

Timberland 1% Under Armour 1%




2 Vans 10% 2 Vans 7% 2 Adidas 7% 2 Adidas 8%

3 Foot Locker 6% 3 Adidas 6% 3 Puma 5% 3 Puma 5%

4 Puma 5% 4 Puma 4% Vans 5% 4 Vans 5%

5 Adidas 4% 5 DC Shoes 3% 5 DC Shoes 3% 5 DC Shoes 4%

6 Asics 3% 6 Converse 2% Foot Locker 3% 6 Foot Locker 3%

Converse 3% 7 Foot Locker 2% New Balance 3% 7 New Balance 3%

DC 3% 8 Champs 1% 8 Converse 2% 8 K Sw iss 3%

9 New Balance 2% Etnies 1% 9 Finish Line 2% 9 Reebok 2%

10 Payless 1% 10 Adio 1% 10 Asics 1% 10 Etnies 2%

Finish Line 1% Reebok 1%




2 Adidas 11% 2 Adidas 8% 2 Adidas 12% 2 Adidas 9%

3 Puma 5% 3 Vans 5% 3 Vans 6% 3 New Balance 6%

4 New Balance 4% 4 DC Shoes 4% 4 K Sw iss 4% 4 DC Shoes 5%

5 DC Shoes 3% Reebok 4% New Balance 4% 5 Puma 4%

6 Champs 3% 6 K. Sw iss 3% 6 DC Shoes 3% Vans 4%

DVS Shoe Co. 3% New Balance 3% Puma 3% 7 Converse 3%

K. Sw iss 3% 8 Puma 3% 8 Converse 3% 8 Reebok 3%

Reebok 3% 9 Emerica 2% Finish Line 3% 9 Lakai 3%

Vans 3% Etnies 2% 10 DVS Shoe Co. 3% 2 brands tied for 10th brands

Foot Locker 2%

Spring 2005

Rank Brand % Total

1 Nike 30%

2 Adidas 7%

3 Reebock 6%

4 New Balance 5%

5 Vans 4%

6 Converse 3%

Foot Locker 3%

8 DC Shoes 3%

DVS Shoe Co. 3%

10 Diesel 2%

Etnies 2%

Spring 2011

Fall 2006

Fall 2008

Fall 2010



April 2011

Key Highlights: Footwear Brand Preferences – Males

• Males have represented a larger portion of our survey responses in the last six cycles, which is reflected in the consolidated preference share across apparel and footwear brands.

• Nike captured 66% mindshare in our most recent survey iteration, which is above the prior season’s 60% and meaningfully above last Spring’s 56% mindshare. The brand bested the No. 2 ranked Vans by a ratio of 8:1. Looking at the top ten brands, Nike’s share (66%) outperformed the collective share of the remaining 120 brands (34%).

• Nike has been steadily increasing its mindshare among males, beginning at 25% in Fall 2005, growing to 33% in Spring 2006, 34% in Fall 2006, 38% in Spring 2007 and into the 50%-plus range in the last 18 months. Our most recent iteration represents Nike’s highest share capture to-date. As mentioned in our Spring research report, gains in share are naturally moderating and could begin to reverse as the cycle matures and as a new fashion/bottoms-driven apparel cycle reemerges.

• Concentration among the top five brands was 81%, up from 79% in the Fall, 77% in Spring 2010, 73% in Fall 2009, 69% in Spring 2009 and 66% in Fall 2008. Nike gained 6ppt from Fall, Vans and Adidas maintained the same rank (with Vans losing 4ppt of share), Converse maintaining the same share (2%) but ceding one rank, and DC Shoes rising from No. 6 in the Fall to No. 4 (with the same share, 2%).

• On a sequential basis, the top five brands preferred by males were consistent for the Nos. 1 thru 3 positions, while the No. 4 and No. 5 positions changed from Converse and Finish Line in the prior season to DC Shoes and Converse in this current study.

• Looking at brands ranked Nos. 5-10, there was some variability from the prior year and prior season. Moving into the top ten from the Fall 2010 period were Sperry Top-Sider and Foot Locker replacing Asics and Under Armour. When compared to the prior year, Reebok, Skechers, and Timberland fell from the top ten, replaced by Sperry Top-Sider and Finish Line.

• Historically, low-profile sneakers, fashion athletic, and retro inspired footwear have been pervasive themes in men’s footwear. It used to be that if we add collective share for Vans, Adidas, Puma, DC, Converse, and New Balance, approximately one in every five share points among males was attached to these brands. With the dominance of Nike, this brand/trend preference has been pulling back. We note that Nike has invested in the fashion athletic and surf/skate market, possibly accounting for Vans, Adidas, Puma, DC, Converse, and New Balance softness. We still believe that the hook-up with footwear and accessories is growing more prevalent as the fashion cycle matures.

Similar to our clothing brand preferences, we subdivide our footwear brand preference results into three primary regions: West, Northeast/Mid-Atlantic, and Midwest.

Footwear Brand Preferences – By Geographic Region


April 2011

Exhibit 67

UPPER- INCOME STUDENT SURVEY – FOOTWEAR BRANDS PREFERRED, BY REGION


1 Nike 31% 1 Nike 41% 1 Nike 49%

2 Vans 20% 2 DSW 6% 2 UGG Australia 6%

3 Steve Madden 7% 3 TOMS 4% 3 Vans 3%

4 UGG Australia 3% 4 Converse 4% 4 DSW 3%

Nordstrom 3% 5 UGG Australia 4% 5 Converse 3%

Nordstrom 3%


1 Nike 33% 1 Nike 45% 1 Nike 40%

2 Vans 19% 2 Vans 7% 2 UGG Australia 5%

3 Steve Madden 7% 3 DSW 5% 3 Converse 4%

4 Converse 4% 4 Sperry Top Sider 3% 4 DSW 4%

5 Nordstrom 3% Journeys 3% 5 Vans 3%

Adidas 3% Steve Madden 3%


1 Nike 28% 1 Nike 48% 1 Nike 45%

2 Vans 24% 2 Vans 6% 2 Vans 6%

3 Steve Madden 8% 3 Puma 5% 3 UGG Australia 6%

4 Converse 5% 4 UGG Australia 5% 4 Converse 4%

5 UGG Australia 4% 5 Converse 4% 5 Foot Locker 3%


1 Nike 30% 1 Nike 37% 1 Nike 36%

2 Vans 17% 2 Puma 6% 2 UGG Australia 8%

3 Steve Madden 6% 3 Vans 5% 3 Steve Madden 7%

4 Converse 5% 4 UGG Australia 4% 4 Converse 5%

5 Puma 2% 5 Converse 3% 5 DSW 4%


1 Nike 23% 1 Nike 38% 1 Nike 31%

2 Vans 20% 2 Puma 9% 2 UGG Australia 14%

3 Steve Madden 9% 3 UGG Australia 4% 3 Foot Locker 7%

4 Converse 8% Vans 4% Steve Madden 7%

5 UGG Australia 5% 5 Adidas 4% 5 Adidas 2%

Converse 2%

DSW 2%

Nordstrom 2%


1 Nike 20% 1 Nike 34% 1 Nike 22%

2 Vans 16% 2 Puma 6% 2 Steve Madden 11%

3 Steve Madden 8% 3 Adidas 6% 3 UGG Australia 7%

4 Rainbow 7% Converse 6% 4 Rainbow 6%

5 Converse 3% 5 Vans 4% 5 Converse 4%

DC Shoes 3%


1 Nike 25% 1 Nike 33% 1 Nike 29%

2 Vans 8% 2 Adidas 6% 2 Steve Madden 6%

3 Rainbow 7% Puma 6% 3 Foot Locker 5%

Steve Madden 7% 4 UGG Australia 4% 4 UGG Australia 5%

5 UGG Australia 7% 5 DSW 3% 5 Adidas 3%

Payless 3% Coach 3%

Midwest

Fall 2010 Fall 2010

Spring 2009

West


Northeast/Mid-Atlantic

Fall 2010

Spring 2010

Spring 2009

Fall 2009

Spring 2009

Fall 2008

Spring 2008

Fall 2009

Spring 2011 Spring 2011 Spring 2011


Fall 2008

Fall 2009

Fall 2008



April 2011

Key Highlights: Footwear Brand Preferences – By Region

• Comparing footwear brands preferred across regions, we note the strength in Nike at 31% in the West, 41% in the Midwest, and 49% in the East. This compares to 33% in the West, 45% in the Midwest, and 40% in the Northeast in Fall 2010. Relative to the prior year, Nike ceded share in the West and Midwest but gained share in the Northeast (9ppt).

• The group of brands listed in the top five was somewhat consistent across regions – Nike, Vans, Converse, Steve Madden and UGG Australia were included. In the West, fashion footwear brand Steve Madden ranked No. 3; in the Midwest, TOMS ranked No. 3; in the Northeast, Converse ranked No. 3. While the No. 1 brand was consistent across all regions, there is regional crossover amongst the remaining four brands within the top five positions. This crossover in brand preference among the top five is something we have noticed over the years.

• When comparing concentration, the top five brands account for 66% in the West, 63% in the Midwest, and 56% in the Northeast. This compares to 69% in the West, 67% in the Midwest, and 65% in the Northeast in our Fall 2010 survey. The West and Midwest experienced a decrease in concentration while the East jumped 9ppt from the Fall and increased 4ppt from Spring 2010.

• We acknowledge that share concentration typically peaks at the peak of the branded cycle and increased dispersion occurs as the cycle enters transition. The volatility in recent measures is evidence of broader industry uncertainty surrounding an emerging apparel fashion cycle. Further, as Fast Fashion continues to garner a higher percentage share among apparel purchases, it frees dollars within the consumer wallet for spending on related footwear products.

• By monitoring share concentration and spending levels, we note that the footwear cycle typically peaks roughly two to three years following apparel cycle peak (last peak Spring 2006) as consumers roll their brand-based dollars into the category following a major apparel replenishment cycle (particularly a bottoms-based cycle).


April 2011

AVERAGE-INCOME STUDENT SURVEY – BRAND PREFERENCES

In the following section, we detail results of our average-income student survey brand preference study. This is the 13th cycle of our survey. As with our upper-income student survey, we ask students to list their favorite brands/retailers in order of preference. The students in our online survey type their responses into blank fields, thus generating an unaided list of brand preferences. We tally each student’s top choice to populate our preferred brand ranks and share rates.

We begin by reviewing clothing brand preferences for all students surveyed. As mentioned, concentration of responses based on geographic location can have varying degrees of impact on our survey results and must be considered when comparing current results to prior periods. In comparison to our upper-income student survey students (top 25% of households based on income), we believe our average-income student survey sample more closely resembles shopping characteristics of students in median-income households. That being said, we acknowledge two important factors: 1) The propensity to spend and the dollars attributable to Upper-Income households dictates much of the sales trends evident in specialty teen retailers (the 80/20 rule); and 2) Despite the variances in average household income, many of the same brands appear in both groups, suggesting the aspirational positioning of many specialty teen brands and retailers.

Clothing Brand Preferences – All Students


April 2011

Exhibit 68

AVERAGE - INCOME STUDENT SURVEY – CLOTHING BRAND PREFERENCES , ALL STUDENTS

Spring 2011 Fall 2010 Spring 2010 Fall 2009


1 American Eagle 10% 1 American Eagle 12% 1 American Eagle 11% 1 Action Sports Brands 10%

2 Nike 10% 2 Hollister 9% 2 Nike 8% 2 American Eagle 10%

3 Forever 21 9% 3 Nike 8% 3 Action Sports Brands 8% 3 Nike 8%

4 Action Sports Brands 8% 4 Action Sports Brands 8% 4 Hollister 7% 4 Hollister 8%

5 Hollister 7% 5 Aeropostale 7% 5 Forever 21 6% 5 Forever 21 7%

6 Aeropostale 5% 6 Forever 21 6% 6 Aeropostale 5% 6 Aeropostale 6%

7 Polo Ralph Lauren 5% 7 Polo Ralph Lauren 5% 7 Polo Ralph Lauren 4% 7 Polo Ralph Lauren 3%

8 Abercrombie & Fitch 3% 8 Buckle 3% 8 Buckle 4% 8 Buckle 3%

9 Buckle 2% 9 Abercrombie & Fitch 3% 9 Charlotte Russe 2% 9 Abercrombie & Fitch 2%

Kohl's 2% 10 Kohl's 2% 10 Abercrombie & Fitch 2% 10 Hot Topic 2%

Hot Topic 2%



1 American Eagle 10% 1 American Eagle 11% 1 American Eagle 13% 1 American Eagle 16%

2 Action Sports Brands 10% 2 Action Sports Brands 11% 2 Action Sports Brands 10% 2 Hollister 12%

3 Hollister 7% 3 Hollister 10% 3 Hollister 9% 3 Action Sports Brands 7%


5 Forever 21 5% 5 Aeropostale 5% 5 Abercrombie & Fitch 4% 5 Abercrombie & Fitch 5%

6 Aeropostale 5% 6 Forever 21 4% 6 Forever 21 3% 6 Aeropostale 4%

7 Abercrombie & Fitch 3% 7 Abercrombie & Fitch 3% 7 Aeropostale 3% 7 Hot Topic 3%

8 Polo Ralph Lauren 3% 8 Polo Ralph Lauren 3% 8 Polo Ralph Lauren 3% 8 Old Navy 2%

9 Hot Topic 2% 9 Rocaw ear 2% 9 Rocaw ear 2% 9 Forever 21 2%

10 Rocaw ear 2% 10 Hot Topic 2% 10 Old Navy 2% 10 South Pole 2%



1 American Eagle 14% 1 American Eagle 14% 1 American Eagle 12% 1 American Eagle 13%

2 Hollister 11% 2 Action Sports Brands 8% 2 Hollister 10% 2 Abercrombie & Fitch 9%

3 Action Sports Brands 9% 3 Hollister 8% 3 Abercrombie & Fitch 8% 3 Hollister 8%

4 Abercrombie & Fitch 6% 4 Abercrombie & Fitch 6% 4 d.e.m.o. 7% 4 d.e.m.o. 8%

5 Nike 5% 5 Aeropostale 5% 5 Action Sports Brands 5% 5 Action Sports Brands 7%

6 Aeropostale 4% 6 Nike 4% 6 Nike 4% 6 Aeropostale 4%

7 Old Navy 3% 7 Polo Ralph Lauren 3% 7 Aeropostale 3% 7 Nike 4%

8 Polo Ralph Lauren 2% 8 Old Navy 3% 8 Old Navy 3% 8 Old Navy 3%

9 Hot Topic 2% 9 Baby Phat 3% 9 Hot Topic 2% 9 Polo Ralph Lauren 3%

10 South Pole 2% 10 J.C. Penney 3% Wal-Mart 2% 10 Hot Topic 2%

Spring 2005

Rank Brand % Total



3 Hollister 7%

4 Aeropostale 4%

Old Navy 4%

6 Action Sports Brands 4%

7 d.e.m.o. 3%

8 Nike 3%

9 Name Withheld 3%

10 Gap 3%

Fall 2008

Fall 2006



April 2011

Key Highlights: Clothing Brand Preferences – All Students

• Teens in our average-income student survey independently named 271 different brands this survey cycle, compared to 268 brands in the Fall, 385 brands in Spring 2010, 560 in Fall 2009, 500 in Spring 2009, 394 in Fall 2008, 376 in Spring 2008, and 298 in Fall 2007. We make special note that the number of brands cited has run counter to the fashion cycle – the larger the number of brands (the greater the share dispersion) during troughs in the spending cycle; the smaller the number of brands (the higher the concentration) the more near to peak of the cycle.

• On a concentration basis, the top five brands preferred by average-income student survey respondents accounted for 44% share, flat to Fall, and above the 40% share in Spring 2010, more in line with 42% in Fall 2009, and 40% in Spring 2009. The top three brands (as a group) accounted for 29% share, again flat to Fall, but up 3ppt from the 27% share of Spring 2010. At its peak in Fall 2007 (3 years ago), the top three brands accounted for 34% of the preference share.

• Average-income survey students selected American Eagle Outfitters for the third consecutive season as their most preferred brand. AE captured 10% of the preference vote, losing share by 2ppt after increasing share by 1ppt in the Fall. The AE brand returned to the top position in Spring 2010 (11%) after being unseated in our Fall 2009 survey by Action Sports Brands.

• Relative to Fall 2010, Hollister ceded 3 ranks and 3ppt share to the No. 5 position in this survey. In our Fall survey, Hollister moved 2ppt higher into the No. 2 position, gaining 2ppt for a 9% share; at the time, the brand had not been in the No. 2 position since Fall 2007. Hollister has been oscillating between the Nos. 3 and 4 positions for a number of survey sessions but has never ranked this low (No. 5) since our survey inception. Despite Hollister’s weak showing, Abercrombie & Fitch maintained share (3%) and slightly increased rank from No. 9 in the Fall to No. 8, up from No. 10 (2%) last Spring, and up from No. 9 and 2% share in Fall 2009.

• Forever 21 made significant share gains this season, increasing 3ppt and jumping 3 positions to No. 3 (9%) from Fall’s No. 6 (6%). While the only Fast Fashion retailer in the top ten list, it has been in the top ten the past eight survey cycles (4 years) and the No. 3 rank is its highest position and share capture to-date.

• Action Sports Brands as a group has risen steadily over the last four years but fell to the No. 3 position in Spring 2010. In our most recent survey, Action Sports Brands maintained the same 8% share and No. 4 rank as in the Fall, slightly lower than its No. 3 rank in Spring 2010. The group held the No. 3 rank position in Fall 2007 and had been rising steadily since that point. The group had accounted for roughly 10%-11% share in each survey cycle since Spring 2008 but ceded 2ppt of share to 8% in our last two iterations. We view the recent survey update as a possible deterioration point (although it held steady at 8%) since there has been no growth in share capture. The volatility in mindshare capture is somewhat concerning, particularly given a much higher position and share representation among our Average Income Student Survey respondents.

• Nike continues to dominate both the Upper-Income and Average-Income surveys, with a No. 1 rank in Upper-Income and No. 2 rank in Average-Income. For Average-Income students, Nike gained 2ppt of share (10%) this season after holding the same 8% share for the past three seasons – ranking No. 2 in the current cycle, No. 3 in the Fall, No. 2 in Spring 2010, and No. 3 in Fall 2009. Nike was No. 4 and a 7% share in Spring 2009.

• Polo Ralph Lauren and Buckle were essentially in line with Fall 2010 when profiling brand rank, although the Buckle (2%) lost 1ppt and Polo Ralph Lauren (5%) was flat. These results were similar to last Spring.


April 2011

• Kohl’s emerged in the top ten preferred brands for the first time, commanding the No. 10 position with 2% share and displacing Charlotte Russe from the prior period. We consider Kohl’s to be a variation of the dominant Fast Fashion preference we are observing among young women across demographic profiles.

• Aeropostale declined in rank to No. 6, losing 2ppt from the Fall’s No. 5 position and 7% share. The 2ppt share gain last season was given back and this Spring’s results mirror last Spring. This is an important consideration as the brand continues to work through improvements in merchandise quality and fashionability at a time when it is feeling the competitive promotional pricing stresses born from the current economic environment. While teens may not indicate preference toward the Aeropostale brand, we do think they are assigning purchases given the inherent trend towards value in a down spending cycle. However, other teen retailers’ increased promotional stance could be distancing some teens from the Aeropostale brand.

• The top ten group of brands was consistent (as a group) on a sequential basis. Relative to the prior year, no brands fell out or were added to the top ten. On a year-over-year basis, Charlotte Russe and Hot Topic fell out of the top ten, replaced by Kohl’s.


April 2011

We have segmented our average-income student survey brand preferences by gender. Many of the same brands appeared on both gender preference lists while others were preferred by only males or females.

Key Highlights: Clothing Brand Preferences – Females

• Females in our average-income student survey demonstrated their brand preference consistency relative to prior seasons with only slight variation in rank and share.

• In terms of share concentration, the top five brands accounted for 45% share, slightly down from 46% share in the Fall, up from 42% share in Spring 2010, 44% in Fall 2009 and 42% in Spring 2009.

• Forever 21 regained the top spot among female brand preferences from American Eagle. American Eagle and Forever 21 swapped positions in our Spring survey from the Fall survey. Forever 21 distanced itself from American Eagle with a 17% share capture

Clothing Brand Preferences – By Gender

Exhibit 69

AVERAGE - INCOME STUDENT SURVEY – CLOTHING BRAND PREFERENCES , FEMALES



1 Forever 21 17% 1 American Eagle 12% 1 Forever 21 12% 1 Forever 21 13%

2 American Eagle 10% 2 Forever 21 11% 2 American Eagle 11% 2 American Eagle 10%


4 Aeropostale 6% 4 Aeropostale 8% 4 Aeropostale 5% 4 Action Sports Brands 7%

5 Action Sports Brands 4% 5 Action Sports Brands 5% 5 The Buckle 5% 5 Aeropostale 7%

6 The Buckle 4% 6 The Buckle 5% 6 Action Sports Brands 5% 6 The Buckle 4%

7 Kohl's 3% 7 rue21 3% 7 Charlotte Russe 4% 7 Charlotte Russe 3%

8 Wet Seal 3% 8 Abercrombie & Fitch 3% 8 Wet Seal 3% 8 Wet Seal 3%

9 rue21 2% 9 Kohl's 3% 9 rue21 3% 9 Abercrombie & Fitch 3%

10 Charlotte Russe 2% 10 Wet Seal 2% 10 Abercrombie & Fitch 2% 10 rue21 3%

Hot Topic 2%



1 American Eagle 11% 1 Hollister 12% 1 American Eagle 13% 1 American Eagle 17%

2 Forever 21 9% 2 American Eagle 12% 2 Hollister 11% 2 Hollister 13%

3 Hollister 9% 3 Forever 21 8% 3 Forever 21 6% 3 Aeropostale 5%

4 Action Sports Brands 7% 4 Action Sports Brands 6% 4 Action Sports Brands 6% 4 Abercrombie & Fitch 5%

5 Aeropostale 6% 5 Aeropostale 6% 5 Abercrombie & Fitch 5% 5 Action Sports Brands 5%

6 Abercrombie & Fitch 3% 6 Abercrombie & Fitch 4% 6 Aeropostale 4% 6 Forever 21 4%

7 Wet Seal 3% 7 Wet Seal 4% 7 Wet Seal 3% 7 Charlotte Russe 3%

8 Charlotte Russe 3% 8 Charlotte Russe 3% 8 Baby Phat 2% 8 Wet Seal 3%

9 The Buckle 2% 9 Rocaw ear 3% 9 Charlotte Russe 2% 9 Hot Topic 3%

Hot Topic 2% 10 Baby Phat 2% 10 Old Navy 2% 10 Old Navy 2%



1 American Eagle 16% 1 American Eagle 15% 1 Hollister 12% 1 American Eagle 13%

2 Hollister 13% 2 Hollister 9% 2 American Eagle 11% 2 Abercrombie & Fitch 10%

3 Abercrombie & Fitch 7% 3 Abercrombie & Fitch 8% 3 Abercrombie & Fitch 9% 3 Hollister 10%

4 Action Sports Brands 5% 4 Aeropostale 6% 4 d.e.m.o. 6% 4 Aeropostale 5%

5 Aeropostale 4% 5 Baby Phat 5% 5 Aeropostale 4% 5 d.e.m.o. 5%

6 Baby Phat 3% 6 Action Sports Brands 4% 6 Forever 21 4% Action Sports Brands 5%

Old Navy 3% 7 Forever 21 4% Action Sports Brands 4% 7 Forever 21 3%

8 Wet Seal 3% Old Navy 4% 8 Old Navy 4% 8 Old Navy 3%

9 Name Withheld 2% 9 Hot Topic 3% 9 Hot Topic 3% 9 Urban Outf itters 3%

Forever 21 2% 10 Wet Seal 2% 10 Kohl's 3% 10 Wet Seal 3%

Hot Topic 2%

Spring 2005

Rank Brand % Total



3 Hollister 8%

4 Aeropostale 5%

5 Old Navy 4%

6 d.e.m.o. 3%

Name Withheld 3%

8 Gap 3%

9 Forever 21 3%

10 Kohl's 2%




April 2011

over American Eagle’s 10%. Forever 21 has now been the No. 1 ranked brand in three of the past four surveys, but American Eagle has been No. 1 in eight out of the past 13 survey iterations.

• The Nos. 3 to 6 ranks are identical to last season: Hollister (No. 3), Aeropostale (No. 4), Action Sports Brands (No. 5), and The Buckle (No. 6). However, brand share capture did vary slightly to the negative on a sequential basis: Hollister lost 2ppt to 8%, Aeropostale lost 2ppt to 6%, Action Sports Brands lost 1ppt to 4%, and The Buckle lost 1ppt to 4%. The share loss appears to have come at Forever 21’s 6ppt gain. Relative to Spring 2009, Aero has been rising in rank from No. 5 to No. 4. Hollister has maintained the No. 3 position since Spring 2009 after being in the No. 1 or 2 positions since Spring 2006.

• Abercrombie & Fitch did not make the top ten female preferred brands, narrowly missing and placing at No. 11 (2%) after rising two positions to No. 8 (3%) in the Fall after being No. 10 (2%) in Spring 2010. Abercrombie has been slowly falling in rank the past few years; this iteration reversed a bit of upward movement in share capture from the Fall.

• Action Sports Brands maintained its No. 5 rank from Fall. The category had inched back up to No. 5 (5%) after slipping a bit in rank and share last Spring (No. 6, 5%).

• Fast fashion retailer rue21 fell two spots to No. 9 (2%) this season after a series of upward brand moves: No. 7 (3%) in the Fall, No. 9 (3%) in Spring 2010, and No. 10 (3%) in Fall 2010.

• However, two Fast Fashion retailers advanced positively in our female Average-Income survey. Wet Seal gained 2ppt from the prior season’s No. 10 (2%) ranking to this season’s No.8 rank (3%). As well, Charlotte Russe came in at No. 10 (2%) after not being in the top ten last season (but No. 7(4%) last Spring). Four of the ten brands in the top ten are Fast Fashion retailers, identical to last Spring, which further supports the growing importance of this concept to teens.


April 2011

Key Highlights: Clothing Brand Preferences – Males

• For males responding to our average-income student survey, brand share and rankings were somewhat similar to prior periods, with only a minor exception. Of the top ten brands, nine were consistent on a sequential basis and eight on a year-over-year basis. Sequentially, J.C. Penney replaced Hot Topic at the No. 9 position (2%). Hot Topic declined to No. 11 (2%). Year-over-year, J.C. Penney and Wal-Mart replaced last Spring’s The Buckle (No. 8, 2%) and Hot Topic (tie No. 9, 2%) at the Nos. 9 and 10 positions, respectively. The Buckle ranks No. 15 (1%) in this survey cycle.

• Nos. 1 thru 8 brands this Spring are identical to Fall’s survey except for Action Sports Brands flipping positions with American Eagle and slight variations in share capture. Nike gained 2ppt to 18% share at the No. 1 spot.

• The noteworthy movement within the male average-income brand preference survey was the swapping of rank between the Nos. 2 and 3 positions. Action Sports Brands moved up one rank to No. 2 (12%) from the prior period No. 3 (11%), in effect replacing American Eagle and moving AE to No. 3 (11%) from its prior period No. 2

Exhibit 70

AVERAGE - INCOME STUDENT SURVEY – CLOTHING BRAND PREFERENCES , MALES




2 Action Sports Brands 12% 2 American Eagle 12% 2 Action Sports Brands 13% 2 Action Sports Brands 14%

3 American Eagle 11% 3 Action Sports Brands 11% 3 American Eagle 10% 3 American Eagle 10%

4 Polo Ralph Lauren 8% 4 Polo Ralph Lauren 9% 4 Polo Ralph Lauren 7% 4 Hollister 7%

5 Hollister 6% 5 Hollister 8% 5 Hollister 6% 5 Polo Ralph Lauren 5%

6 Aeropostale 4% 6 Aeropostale 6% 6 Aeropostale 4% 6 Aeropostale 5%

7 Abercrombie & Fitch 3% 7 Abercrombie & Fitch 3% 7 Levis 2% 7 SouthPole 2%

8 Levis 2% 8 Levis 2% 8 Buckle 2% 8 Hot Topic 2%

9 J.C. Penney 2% 9 Hot Topic 2% 9 Abercrombie & Fitch 2% 9 Levis 2%

10 Wal-Mart 2% 10 Wal-Mart 2% Hot Topic 2% 10 Abercrombie & Fitch 2%



1 Nike 14% 1 Action Sports Brands 17% 1 Action Sports Brands 14% 1 American Eagle 16%

2 Action Sports Brands 14% 2 Nike 12% 2 American Eagle 13% 2 Hollister 11%

3 American Eagle 10% 3 American Eagle 10% 3 Nike 12% 3 Action Sports Brands 11%

4 Hollister 6% 4 Hollister 7% 4 Hollister 6% 4 Nike 10%

5 Polo Ralph Lauren 5% 5 Polo Ralph Lauren 4% 5 Polo Ralph Lauren 5% 5 Abercrombie & Fitch 5%

6 Aeropostale 4% 6 Aeropostale 3% 6 Abercrombie & Fitch 3% 6 Polo Ralph Lauren 3%

7 Abercrombie & Fitch 2% 7 Hot Topic 2% 7 Rocaw ear 2% 7 Aeropostale 3%

8 Levis 2% 8 Abercrombie & Fitch 2% 8 Aeropostale 2% 8 South Pole 3%

9 Rocaw ear 2% 9 Wal-mart 2% 9 Hot Topic 2% 9 Hot Topic 2%

10 SouthPole 2% 10 Rocaw ear 2% 10 South Pole 2% 10 Old Navy 2%



1 Action Sports Brands 13% 1 American Eagle 12% 1 American Eagle 12% 1 American Eagle 12%

2 American Eagle 12% 2 Action Sports Brands 12% 2 Hollister 8% 2 d.e.m.o. 11%

3 Nike 9% 3 Nike 8% 3 d.e.m.o. 8% 3 Action Sports Brands 10%

4 Hollister 9% 4 Hollister 6% 4 Nike 8% 4 Abercrombie & Fitch 7%

5 Abercrombie & Fitch 5% 5 Polo Ralph Lauren 6% 5 Abercrombie & Fitch 7% 5 Nike 7%

6 Aeropostale 4% 6 Abercrombie & Fitch 5% 6 Action Sports Brands 6% 6 Polo Ralph Lauren 6%

7 Polo Ralph Lauren 3% 7 Aeropostale 4% 7 Wal-Mart 4% 7 Hollister 5%

8 Old Navy 2% 8 J.C. Penney 4% 8 Polo Ralph Lauren 3% 8 Old Navy 4%

South Pole 2% 9 Old Navy 3% 9 Old Navy 3% 9 Aeropostale 3%

10 Hot Topic 2% Rocaw ear 3% 10 J.C. Penney 3% 10 Kohl's 2%

Spring 2005

Rank Brand % Total



3 Hollister 6%


5 d.e.m.o. 6%

Nike 6%

7 Old Navy 4%

Polo Ralph Lauren 4%

9 Aeropostale 3%

10 Gap 3%

Fall 2008

Fall 2010Spring 2011

Fall 2006



April 2011

(12%). These two brands have been battling the Nos. 2 and 3 positions for the past five survey cycles, with Action Sports Brands grabbing the No. 2 spot four of the past five surveys. Prior to Spring 2007, American Eagle had ranked at No. 1 among males’ preferred brands in our average-income student survey. The brand had been losing modest share in each survey (among males and females) since then but appears to have stabilized within the last two years.

• With respect to share concentration, the top five brands accounted for 56% share, flat to Fall, up from 52% in Spring 2010, up from 51% in Fall 2009, and up from 49% share in Spring 2009. This compares to females where concentration among the top five brands was closer to 45%. Males tend to show relative concentration in their apparel purchases when compared to their female counterparts. This has been a trend we’ve observed over several survey cycles, most likely attributable to higher number of female retail stores and females’ stronger propensity to shop.

• Nike moved into the No.1 position in Spring 2009 and maintained its leadership in Fall 2009, Spring 2010, Fall 2010, and now Spring 2011. The brand had achieved No. 2 in Fall 2008, No. 3 in Spring 2008 and No. 4 in Fall 2007. The brand is showing a steady increase in preference among males. The brand captured 18% of share, 2ppt above Fall 2010 and Spring 2010’s 16% share, up from 15% in Fall 2009, 14% in Spring 2009, and 12% share in Fall 2008.

• Polo Ralph Lauren maintained its No. 4 rank for the third consecutive season, slightly down (8%) from Fall’s 9% share but up 1ppt from year-ago Spring (7%). For the past three seasons, Polo Ralph Lauren has eclipsed Hollister.

• Hollister maintained rank at No. 5 with 6% share, equal to its Spring 2010 rank but down 2ppt in share from Fall (8%). Hollister’s recent performance is still down from No. 4 and 7% in Fall 2009 and No. 4 and 6% in Spring 2009. The brand had ranked as high as No. 2 (11% share) in Fall 2007 and has been falling since.

• Aeropostale was stable at No. 6 although losing 2ppt from the prior season (6%) with equal share compared to Spring 2010 among males.

Key Highlights: Brand Preferences – Action Sports Lifestyle

• The Action Sports lifestyle continues to resonate with teens as the category’s share remained at 8%. The No. 4 ranking was in line with Fall 2010 but dropped one position from Spring 2010.

• Among males, the 12% share compares to 11% in the Fall and 13% last Spring. Action Sports ranking improved one position sequentially to No. 2, but was flat from Spring 2010.

• Share among females declined to 4% compared to 5% in Fall 2010 and Spring 2010. However, the ranking improved to No. 5 relative to No. 5 in the Fall and No. 6 last Spring.

• Collectively, teens named 44 unique brands and retailers in the Action Sports Brands category.

Clothing Brand Preferences – Action Sports & Boardsport Brands


April 2011

• Among males, the category share was 12%, up from 11% in Fall 2010 and down slightly from 13% in Spring 2010. The category ranked No. 2, which is a one position improvement from the Fall and in line with Spring 2010.

Exhibit 71

AVERAGE - INCOME STUDENT SURVEY – ACT ION SPORTS BRANDS MENTIONED

20

38

24 24

34

65

5153

40

32

44

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

0

10

20

30

40

50

60

70

Spring 2006

Fall 2006

Spring 2007

Fall 2007

Spring 2008

Fall 2008

Spring 2009

Fall 2009

Spring 2010

Fall 2010

Spring 2011

# o

f Bra

nd

s R

ela

tive

to #

of R

espo

nses

# o

f B

ran

ds

Brands Mentioned Brands Mentioned / Number of Responses


Exhibit 72

AVERAGE - INCOME STUDENT SURVEY – ACT ION SPORTS BRANDS SHARE BY GENDER

Males Females

% Mindshare % Rank % Mindshare % Rank

Spring 2005 6% 3 0% -

Fall 2005 10% 3 5% 5

Spring 2006 6% 6 4% 6

Fall 2006 12% 2 4% 6

Spring 2007 13% 1 5% 4

Fall 2007 11% 3 5% 5

Spring 2008 14% 1 6% 4

Fall 2008 17% 1 6% 4

Spring 2009 14% 2 7% 4

Fall 2009 14% 2 7% 4

Spring 2010 13% 2 5% 6

Fall 2010 11% 3 5% 5

Spring 2011 12% 2 4% 5

13-survey avg 12% 2 5% 5



April 2011

• Among females, the category fell in share to 4% from 5% in the previous two surveys, but rank was flat on a sequential basis and improved one position to No. 5 year-over-year.

• We believe a key to growth for many Action Sports lifestyle brands is evolving women’s assortments. Relative to the 13-survey average share of 5% and No. 5 rank, our most recent survey suggests Action Sports brands are not gaining share among female teens.

• While the boundaries were at one time distinct between segments within the action sports lifestyle, we argue that the lifestyle has grown beyond participation through access to media and growth of national retailers such as Pacific Sunwear and Zumiez. The presence of brands in the familiar mall-based specialty environment has blurred the buying behavior between “hard core participant” and “aspirational teen.”

• In addition, we believe Nike’s growing share may understate the share of Action Sports as the company has been gaining share in the category through its Nike SB and Nike 6.0 brands. Both Nike SB and Nike 6.0 received votes for the most popular footwear and we believe some of Nike’s increasing apparel and footwear share is driven by these brands.

• Similarly, evolution of the lifestyle has created crossover brands, which may have had roots in one boardsport segment but now are widely accepted and worn by anyone interested in the broader lifestyle. For the reasons listed above, it is becoming increasingly difficult to distinguish what is truly an “action sports lifestyle” authentic or inspired brand. We expect this convergence trend to continue, particularly as many of the vertically integrated specialty retailers test similar looks, particularly in the graphic tees, denim (skater skinny), and fleece (all over print) categories. Teens named 44 brands which we have included in our Action Sports category but there were an additional 5-10 brands which could be included, if we were to expand the definition of Action Sports brands. Teens identified 11 different retailers of Action Sports brands.

• We’ve also witnessed several retailers capitalizing on the popularity of Mixed Martial Arts (MMA) and brands in the street culture category. These become a natural component of assortment planning as many consumers who grew up in the action sports community are aging into other fashion lifestyles including these rock, street, and crossover categories. As a reminder, we have not included MMA brands in our Action Sports rankings.

• When consolidating our results across genders, Pacific Sunwear continues to command the leading mindshare (38%) within the Action Sports category. The retailer’s share of Action Sports declined from 48% in Fall 2010 but was flat compared to Spring 2010. In addition, the company maintained its No. 1 rank within Action Sports for females and males. Fox Racing returned to the No. 2 position with a 7% share and Vans moved up to No. 3 with a 6% share. DC’s 5% share was in line with Fall 2010 and up from 4% in Spring 2010. Zumiez commanded 4% share, down slightly from 5% in Fall 2010 but in line with Spring 2010.


April 2011

• For females, identification with the lifestyle has been historically tied to the retailers that sell the product and our most recent iteration was no different. Pacific Sunwear commanded 57% share, up from 53% in Spring 2010 and down from 67% in Fall 2010. In total, females listed 19 unique brands/retailers versus 15 in Fall 2010, 19 in Spring 2010 and 25 during Fall 2009.

• In total, retailers accounted for 49% of the category vote while individual brands accounted for 51%. This is in contrast with males, where 42% of the category share is attributed to retailers and 58% to individual brands.

• For males, Pacific Sunwear commanded 31% share, up from 27% share in Spring 2010 and down from 40% in Fall 2010. Vans’ share increased to 8% and rank increased from No. 5 in Spring 2010 to No. 2 in Spring 2011. DC share slipped slightly on a sequential basis to 6%, but improved from 5% in Spring 2010. Zumiez share slipped slightly on a sequential basis to 5%, but improved from 4% in Spring 2010.

• Compared to a 13-survey average share of 10.4%, the category captured 8% mindshare in our current survey.

Exhibit 73

AVERAGE - INCOME STUDENT SURVEY – ACT ION SPORTS BRAND PREFERENCES

Rank Brand %AS % Total Rank Brand %AS % Total Rank Brand %AS % Total Rank Brand %AS % Total Rank Brand %AS % Total

1 Pacif ic Sunw ear 38% 3% 1 Pacif ic Sunw ear 48% 3% 1 PacSun 38% 3% 1 PacSun 37% 4% 1 PacSun 31% 3%

2 Fox Racing 7% 1% 2 Hurley 6% 0% 2 Hurley 7% 1% 2 Fox Racing 6% 1% 2 Volcom 7% 1%

3 Vans 6% 1% 3 Zumiez 5% 0% 3 Fox Racing 7% 1% 3 LRG 6% 1% 3 Fox Racing 7% 1%

4 DC 5% 0% DC 5% 0% 4 Volcom 6% 0% 4 Zumiez 5% 0% 4 LRG 6% 1%

5 Zumiez 4% 0% 5 Fox Racing 5% 0% 5 LRG 6% 0% 5 DC 4% 0% 5 Hurley 5% 1%

6 Hurley 4% 0% 6 LRG 4% 0% 6 Vans 5% 0% 6 Volcom 4% 0% Zumiez 5% 1%

LRG 4% 0% 7 Volcom 3% 0% 7 DC 4% 0% 7 Hurley 4% 0% 7 Billabong 4% 0%

8 Billabong 3% 0% 8 Name Withheld 3% 0% 8 Zumiez 4% 0% 8 Quiksilver 4% 0% 8 Quiksilver 4% 0%

9 Name Withheld 3% 0% 9 Quiksilver 2% 0% 9 Quiksilver 2% 0% 9 Billabong 3% 0% 9 DC 3% 0%

10 Volcom 2% 0% 10 Vans 2% 0% 10 Roxy 2% 0% 10 Famous 3% 0% 10 Roxy 3% 0%

Papaya 2% 0%

Action Sports 100% 8% Action Sports 100% 7% Action Sports 100% 8% Action Sports 100% 10% Action Sports 100% 10%

ACTION SPORTS BRANDS PREFERENCES - AVERAGE INCOME STUDENT SURVEY - FEMALE



2 Name Withheld 6% 0% 2 Papaya 7% 0% 2 Rainbow 9% 0% 2 Roxy 6% 0% 2 Roxy 8% 1%

Fox Racing 6% 0% Fox Racing 7% 0% 3 Fox Racing 7% 0% 3 Fox Racing 6% 0% 3 Rainbow 8% 1%

4 Roxy 4% 0% 4 Name Withheld 5% 0% Roxy 7% 0% 4 Rainbow 6% 0% 4 Fox Racing 6% 0%

5 Anchor Blue 3% 0% 5 Roxy 3% 0% 5 Billabong 5% 0% 5 Name Withheld 4% 0% Zumiez 6% 0%

Volcom 3% 0% 6 Zumiez 2% 0% Papaya 5% 0% 6 Zumiez 4% 0% 6 Papaya 5% 0%

Zumiez 3% 0% Volcom 2% 0% 7 Hurley 2% 0% 7 Papaya 3% 0% Volcom 5% 0%

Ocean Pacif ic 3% 0% 8 brands tied for 8th place 8 Quiksilver 2% 0% 8 Anchor Blue 2% 0% 8 Billabong 3% 0%

11 brands tied for 9th place Name Withheld 2% 0% 9 Billabong 2% 0% 9 Anchor Blue 2% 0%

Volcom 2% 0% 10 Hurley 2% 0% 10 Name Withheld 2% 0%

Zumiez 2% 0% Volcom 2% 0%


ACTION SPORTS BRANDS PREFERENCES - AVERAGE INCOME STUDENT SURVEY - MALE



2 Vans 8% 1% 2 Hurley 9% 1% 2 Hurley 9% 1% 2 LRG 9% 1% 2 LRG 8% 1%

3 Fox Racing 8% 1% 3 DC 7% 1% 3 LRG 7% 1% 3 Fox Racing 6% 1% 3 Volcom 7% 1%

4 DC 6% 1% 4 Zumiez 6% 1% 4 Volcom 7% 1% 4 DC 6% 1% 4 Hurley 7% 1%

5 LRG 5% 1% 5 LRG 5% 0% 5 Vans 7% 1% 5 Zumiez 5% 1% 5 Fox Racing 6% 1%

Hurley 5% 1% 6 Fox Racing 4% 0% 6 Fox Racing 6% 1% 6 Quiksilver 5% 1% 6 Quiksilver 5% 1%

7 Zumiez 5% 1% 7 Volcom 3% 0% 7 DC 5% 1% 7 Volcom 5% 1% 7 Vans 5% 1%

8 Billabong 4% 0% 8 Quiksilver 3% 0% 8 Billabong 4% 1% 8 Hurley 5% 1% 8 DC 5% 1%

9 Quiksilver 3% 0% 9 Vans 3% 0% 9 Zumiez 4% 1% 9 Billabong 4% 1% Zumiez 5% 1%

CCS 3% 0% 10 Zoo York 2% 0% 10 Element 3% 0% 10 Famous 4% 1% 10 Billabong 5% 1%

CCS 2% 0% Quiksilver 3% 0% Vans 4% 1%

RVCA 2% 0%


Spring 2011

Spring 2011

Spring 2011

Fall 2010

Fall 2010

Fall 2010

Fall 2009

Fall 2009

Fall 2009

Spring 2009

Spring 2009

Spring 2010

Spring 2010




April 2011

Exhibit 74

AVERAGE - INCOME STUDENT SURVEY – ACT ION SPORTS BRAND SHARE

4%

7%

5%

8%

9%

7%

10%

11%

10% 10%

8%8%

8%

0%

2%

4%

6%

8%

10%

12%

13-Survey Average = 8.0%



April 2011

Key Highlights: Brand Preferences – Boardsport Brands While Action Sports lifestyle sales continue to lag behind other areas of the broader apparel market, our survey demonstrates many small brands make up this industry and brand proliferation, combined with an unbalanced exposure to housing impacted states, may be bigger versus a loss of interest in the lifestyle. We note teens continue to vote for Action Sports/Boardsport Brands, but note the ranking remains below the No. 1 ranking achieved in Fall 2009. Due to the continued popularity of boardsport brands and the culture it represents, we carve out boardsport brands as a category in order to evaluate brands and associated spending trends. Please note our boardsport category excludes Action Sports retailers such as Pacific Sunwear, Zumiez, Sun Diego, etc. and looks specifically at the brands themselves. As mentioned above, Action Sports brands remain well entrenched in the teen lifestyle and culture, representing 8% of total votes, similar to Fall 2010 and Spring 2010.

• In terms of Boardsport brands specifically, Fox Racing took over the top spot with 15% share, up from 11% in the Fall and 13% last Spring.

• Vans share increased to 13%, up from 5% in Fall 2010 and 10% in Spring 2010. This is Vans highest ranking in the history of our survey and is a strong indicator of the brand’s recent domestic success.

Exhibit 75

AVERAGE - INCOME STUDENT SURVEY – BOARDSPORT CLOTHING BRANDS PREFERRED, ALL STUDENTS



1 Fox Racing 15% 1 Hurley 14% 1 Hurley 14% 1 Fox Racing 12%

2 Vans 13% 2 DC 11% 2 Fox Racing 13% 2 LRG 12%

3 DC 10% 3 Fox Racing 11% 3 Volcom 11% 3 DC 8%

4 Hurley 8% 4 LRG 8% 4 LRG 11% 4 Volcom 8%

LRG 8% 5 Volcom 7% 5 Vans 10% 5 Hurley 7%

6 Billabong 6% 6 Quiksilver 5% 6 DC 8% Quiksilver 7%

7 Volcom 5% 7 Vans 5% 7 Quiksilver 5% 7 Billabong 7%

8 Quiksilver 4% Papaya 5% 8 Roxy 4% 8 Famous Stars & Straps 6%

9 Famous Stars & Straps 3% 9 RVCA 3% 9 Element 4% 9 Vans 6%

Element 3% Zoo York 3% 3 brands tied for 10th 10 Roxy 5%

Oakley 3% CCS 3%

Obey 3% Billabong 3%



1 Volcom 12% 1 Volcom 11% 1 Famous Stars & Straps 13% 1 Fox Racing 15%

2 Fox Racing 11% 2 Famous Stars & Straps 8% 2 Fox Racing 10% 2 Quiksilver 12%

3 LRG 10% 3 LRG 8% 3 Hurley 9% 3 LRG 11%

4 Hurley 10% 4 Billabong 8% 4 Volcom 8% 4 Famous Stars & Straps 8%

5 Billabong 7% 5 FOX Racing 8% 5 LRG 8% Volcom 8%

6 Quiksilver 6% 6 Hurley 7% 6 Billabong 7% Billabong 8%

7 DC 6% 7 DC 7% Quiksilver 7% Rainbow 8%

8 Roxy 5% 8 Quiksilver 6% 8 DC 6% 8 Vans 7%

9 Rainbow 9 Vans 4% 9 Roxy 5% 9 Element 5%

10 Famous Stars & Straps 10 Akademic 3% 10 Vans 4% 10 DC 3%

Zoo York 3%

Spring 2007

Rank Brand % BS Rank Brand % BS

1 Hurley 20% 1 Quiksilver 14%

Volcom 20% 2 Volcom 11%

3 LRG 9% 3 Fox 8%

Quiksilver 9% 4 Hurley 8%

5 Billabong 7% 5 Billabong 7%

FOX Racing 7% 6 LRG 6%

7 Famous Stars & Straps 5% 7 Rainbow 5%

8 Element 4% 8 Roxy 5%

Krew 4% 9 Burton 4%

10 8 brands tied for 10th place DC 4%

Fall 2008

Fall 2010Spring 2011

Fall 2006



April 2011

• DC’s rank fell one position sequentially to No. 3, but climbed from No. 6 in Spring 2010.Quiksilver share slipped to 4% compared to 5% in the Fall and Spring.

• Volcom share slipped to 5% compared to 7% in Fall 2010 and 11% in Spring 2010. The brand’s rank also declined to No. 7 compared to No. 5 in Fall 2010 and No. 7 in Spring 2010.

• Given the relevance of this category and retailers’ desire to capture spending dollars from teens, we continue to see a heightened focus from Target, Kohl’s, Macy’s and J.C. Penney on the category. We note, Tony Hawk in Kohl’s, a dedicated Action Sports/Young Men’s departments within Macy’s, J.C. Penney’s RS by Sheckler, and Target’s Shaun White apparel line. We believe this is evidence that the category is far beyond the coastal beach towns of California and Florida and will continue to grow with additional distribution opportunities domestically and internationally.


April 2011

In the following exhibits, we detail results of our brand preference survey for footwear. As with our clothing survey, we ask students to fill in their responses in blank fields, thus generating an unaided list of footwear brands.

Key Highlights: Footwear Brand Preferences – All Students

• In our Fall 2010 survey, average-income student survey respondents listed 226 different footwear brands, down from 257 in Fall, 310 in Spring 2010, 412 in Fall 2009, 353 in Spring 2009, and 351 brands listed in our Fall 2008 results.

• With respect to share concentration, the top five brands accounted for 61% share, flat to Fall, up from 59% in Spring 2010, 60% in Fall 2009, 54% in Spring 2009 and 57% in Fall 2008. Share concentration among the top three brands was flat on a sequential basis at 56%, up from 53% in Spring 2010, and 54% on a year-over-year basis. The high concentration levels indicate students’ preference for popular footwear brands.

Footwear Brand Preferences – All Students

Exhibit 76

AVERAGE - INCOME STUDENT SURVEY – FOOTWEAR BRAND PREFERENCES , ALL STUDENTS




2 Vans 7% 2 Vans 5% 2 Vans 5% 2 Converse 6%

3 Converse 5% 3 Converse 5% 3 Converse 5% 3 Vans 5%

4 Sperry Top-Sider 3% 4 Adidas 3% 4 Puma 3% 4 Adidas 3%

5 UGG Australia 2% 5 Journeys 2% UGG Australia 3% 5 Puma 3%

6 Journeys 2% 6 Payless 2% 6 Adidas 2% 6 Journeys 2%

7 Adidas 2% 7 Foot Locker 2% 7 Journeys 2% 7 DC Shoes 2%

8 Payless 2% 8 Sperry Top-Sider 2% 8 DC Shoes 2% 8 Payless 2%

9 DC Shoes 2% 9 Puma 2% 9 Foot Locker 2% 9 Sperry Top-Sider 2%

10 Puma 1% UGG Australia 2% 10 Sperry Top-Sider 2% 10 Foot Locker 1%




2 Vans 5% 2 Vans 5% 2 Vans 4% 2 Adidas 5%

3 Converse 4% 3 Adidas 4% 3 Adidas 4% 3 Puma 4%

4 Adidas 3% 4 Converse 3% 4 Converse 4% 4 Vans 4%

5 DC Shoes 2% 5 Puma 3% 5 Puma 3% 5 Converse 3%

6 UGG Australia 2% 6 Journeys 2% 6 Journeys 2% 6 Journeys 3%

7 Puma 2% 7 Foot Locker 2% 7 Payless 2% 7 DC Shoes 2%

8 Journeys 2% 8 DC Shoes 2% 8 DC Shoes 2% 8 Foot Locker 2%

Payless 2% 9 Payless 2% 9 Steve Madden 2% 9 Steve Madden 2%

10 Sperry Top-Sider 2% 10 Old Navy 2% 10 New Balance 2% 10 Finish Line 2%





3 Puma 6% 3 Vans 4% 3 Converse 4% 3 K Sw iss 5%

4 Vans 5% 4 Puma 4% 4 K Sw iss 4% 4 Steve Madden 3%

5 Converse 4% 5 Converse 3% 5 Vans 4% 5 Vans 3%

6 K Sw iss 3% New Balance 3% 6 Steve Madden 3% 6 Puma 3%

7 Rainbow 2% 7 Steve Madden 3% 7 Puma 3% 7 Reebok 3%

8 Journeys 2% 8 K Sw iss 2% 8 Foot Locker 2% 8 Journeys 2%

New Balance 2% 9 Foot Locker 2% 9 New Balance 2% 9 Converse 2%

10 Payless 2% 10 Payless 2% 10 Payless 2% 10 Foot Locker 2%

New Balance 2%

Spring 2005

Rank Brand % Total

1 Nike 24%

2 Adidas 9%

3 Payless 4%

4 K Sw iss 4%

5 Steve Madden 3%

6 New Balance 3%

7 Bakers 3%

8 Journeys 3%

9 Vans 2%

10 Reebok 2%

Puma 2%

Fall 2010

Fall 2008

Spring 2011

Fall 2006



April 2011

• Nike remains the most preferred footwear brand among teens responding to our average-income student survey, with a resounding 45% share, just slightly down from 46% in Fall but up from 43% in Spring 2010 and Fall 2009, and 40% in Spring 2009. Nike commands share roughly 6.4 times that of the No. 2 brand, Vans, at 7% share. Nike has been named the top brand over the last 13 survey iterations, peaking in our Fall survey at 46%. The brand has maintained relative consistency in share capture over the last three and a half years (seven survey cycles), fluctuating 9ppt from 37% in Spring 2008 to 46% in Spring 2010.

• Vans and Converse maintained the No. 2 rank (7% share) and No. 3 rank (5%) share from the prior period. Sperry Top-Siders (No. 4, 3%) moved up 4 spots from its Fall 2010 No. 8 position and 6 spots from its No. 10 position last Spring. Adidas, formerly No. 4 in the prior period, declined to No. 7 (losing 1ppt).

• A notable mover was UGG Australia, which had returned to the top ten in the Fall survey (tie No. 9, 2%) after the brand’s absence in Fall 2009. This Spring the brand ranks No. 5 (2%) versus last Spring’s No. 4 (3%) rank. From our high school visits, we notice more and more teen girls wearing UGG Australia slippers to school; at a lower price point (approximately $80 compared to +$150 boots), we believe more entry level prices is attributing to wider accessibility among average-income students.

• The balance of the top ten was largely consistent with Fall 2010 with some rank and share movement. Relative to the prior year, DC Shoes replaced Foot Locker in the top ten list. DC Shoes ranked No. 9 (2%), which was a 2ppt move from Fall’s No. 11 (2%). Foot Locker dropped to No. 13 after its No. 7 ranking in the Fall (same 2% share).

• Another notable mover this survey cycle is Sperry Top-Sider. A classic and preppy shoe, Sperry Top-Sider increased 1ppt and moved 2 spots to No. 4 from Fall’s No. 6.

• We view Payless as the Fast Fashion shoe retailer and despite dropping 2 spots in the rank (No. 8, same 2% share) from Fall (No. 6); we see its top ten presence, along with Journeys, as stronger brand building of shoe retailers against shoe brands.

• On a concentration basis, the top ten footwear brands accounted for 71% share, equal to Fall 2010, up from 69% in Spring 2010 and Fall 2009, 64% in Spring 2009, and 67% in Fall 2008. Share among the top five brands was consistent sequentially at 61%, slightly down from 62% in Fall 2010, up from 58% in Spring 2010, and 59% in Fall 2009.


April 2011

We segmented our footwear brand preference data by gender in an effort to better distinguish between classifications and styles, in addition to brands. Females listed 178 unique footwear brands while males listed 106 footwear brands.

Key Highlights: Footwear Brand Preferences – Female

• Females continue to align their footwear preferences with their apparel selections, considering footwear to be an important accessory item.

• Nike commanded the top spot once again, for the 13th survey iteration in a row. At 25% share, the brand lost 4ppt sequentially and year-over-year. Nike remains a top brand of choice given its broad distribution across channels and extensive collection of both fashion and performance footwear. We note our Nike brand captures all Nike logo sub-brands but does not aggregate independent Nike Inc. brands such as Converse, Cole Haan, etc.

Footwear Brand Preferences – By Gender

Exhibit 77

AVERAGE - INCOME STUDENT SURVEY – FOOTWEAR BRAND PREFERENCES , FEMALE




2 Vans 7% 2 Converse 7% 2 Converse 6% 2 Converse 8%

3 Converse 7% 3 Vans 5% 3 UGG Australia 5% 3 Vans 5%

4 UGG Australia 5% 4 Journeys 4% 4 Vans 5% 4 Journeys 4%

5 Payless 4% 5 Payless 4% 5 Journeys 4% 5 Payless 3%

6 Journeys 4% 6 UGG Australia 3% 6 Payless 3% 6 Puma 3%

7 Sperry Top-Sider 4% 7 Steve Madden 3% 7 Steve Madden 3% 7 UGG Australia 3%

8 DSW 3% 8 Sperry Top-Sider 2% 8 Puma 3% 8 Steve Madden 2%

9 TOMS 3% 9 Adidas 2% 9 DSW 2% 9 Sperry Top-Sider 2%

10 Steve Madden 2% 10 Foot Locker 2% 10 Foot Locker 2% 10 Old Navy 2%




2 Converse 6% 2 Vans 5% 2 Converse 5% 2 Puma 5%

3 Vans 5% 3 Converse 5% 3 Payless 4% 3 Journeys 4%

4 UGG Australia 5% 4 Journeys 4% 4 Journeys 4% 4 Vans 4%

5 Payless 4% 5 Payless 4% 5 Puma 4% 5 Converse 4%

6 Journeys 4% 6 Old Navy 3% 6 Vans 4% 6 Adidas 3%

7 Steve Madden 3% 7 Puma 3% 7 Steve Madden 4% 7 Steve Madden 3%

8 Sperry Top-Sider 3% 8 Foot Locker 3% 8 UGG Australia 3% 8 Bakers 3%

9 Puma 3% 9 Steve Madden 3% 9 DSW 2% 9 Payless 3%

10 Rainbow 3% 10 Sperry Top-Sider 2% 10 Sperry Top-Sider 2% 10 Old Navy 3%




2 Puma 7% 2 Steve Madden 5% 2 Adidas 6% 2 Adidas 9%

3 Vans 5% 3 Vans 4% 3 Steve Madden 5% 3 Steve Madden 6%

4 Converse 5% 4 Adidas 4% 4 Converse 5% 4 Journeys 4%

5 Adidas 5% 5 Converse 4% 5 Vans 4% 5 K Sw iss 4%

6 Journeys 4% 6 Puma 4% 6 Journeys 3% 6 Puma 3%

Rainbow 4% 7 Payless 3% Payless 3% 7 Nine West 3%

8 Payless 3% 8 Foot Locker 3% 8 K Sw iss 3% 8 Converse 3%

9 Steve Madden 3% 9 Journeys 3% Puma 3% 9 Foot Locker 2%

10 K Sw iss 3% 10 Rainbow 2% 10 Foot Locker 3% 10 Rainbow 2%

Vans 2%

Spring 2005

Rank Brand % Total

1 Nike 18%

2 Adidas 7%

3 Payless 6%

4 Steve Madden 6%

5 Bakers 5%

6 Journeys 4%

7 etnies 3%

Vans 3%

9 K Sw iss 2%

10 Finish Line 2%

Fall 2010

Fall 2008

Spring 2011

Fall 2006



April 2011

• The top ten brands had two new brands included in this Spring’s survey and two brands that were excluded. DSW rejoined the group at No. 8, following an absence in Fall’s survey but similar to its No. 9 rank from last Spring. TOMS shoes appeared in the top ten for the first time, at No. 9. TOMS shoes was ranked No. 16 in the Fall and No. 18 last Spring. Foot Locker and Adidas, Nos. 16 and 18 respectively, lost share from their Fall Nos. 10 and 9, and Spring’s Nos. 19 and 10. We view TOMS shoes and DSW as a lot more fashion-forward than Foot Locker and Adidas, which aligns with our results from the clothing brand preferences.

• Nos. 2-5 were consistent with Fall’s survey with Vans at No. 2, Converse at No. 3, UGG Australia at No. 4, and Payless at No. 5.

• Positive share movers include Vans (No. 2 from No. 3), UGG Australia (No. 4 from No. 6), Sperry Top-Sider (No. 7 from No. 8). Sperry Top-Sider has progressed nicely since last Spring’s No. 11 rank, and we note students listing the brand several times on their wish list.

• Negative share movers were Converse (No. 3 from No. 2), Journeys (No. 6 from No. 4), and Steve Madden (No. 10 from No. 7).

• UGG Australia, having moved into the top ten in Spring 2008, falling out in Fall 2008, returning in Spring 2009 at No. 4, falling out in Fall 2009, moving back into the top ten in Spring 2010 at No. 3, and moving lower in our Fall survey to No. 6 now moves up to No. 4 rank with a 2ppt gain (5%). We believe the brand’s reach is expanding more towards adults, although Average-Income students are still receptive to its relatively high price points (most items $100-plus). We have noticed UGG slippers are trending well with female teens and the lower price point (approximately $80) provides for a nice and affordable purchase.

• Journeys dropped two spots to the No. 6 rank from the prior season’s No. 4 (same 4% share) and Payless held steady at No. 5 for two survey iterations (4%). Both footwear retailers had moved up one rank, to Nos. 4 and 5, respectively, in the Fall from Nos. 5 and 6 in Spring 2010.

• With respect to share concentration, the top five brands preferred by females accounted for 47%, down from 49% share in Fall 2010, 48% share in Spring 2010 and Fall 2009, and 45% in Spring 2009.

Key Highlights: Footwear Brand Preferences – Males

• For males in our average-income student survey group, Nike captured 64% share, up 1ppt from Fall’s 63% share and up from 61% in Spring 2010, 59% in Fall 2009 and 56% in Spring 2009. Nike captured over 10x the share of the No. 2 brand Vans (6%). Nike gained 1ppt share from Fall 2010, 3ppt from Spring 2010, 5ppt from Fall 2009 and 8ppt from Spring 2009, and achieved its peak share rate in 13 survey iterations. Our share figures suggest that Nike captures more than half of all mindshare among males when they consider their favorite footwear brand. We note Nike includes product lines sub-branded including Jordan, Air force Ones, etc.

• Nos. 2-5 was consistent with the Fall’s survey, with Vans at No. 2, Adidas at No. 3, Converse at No. 4, and DC Shoes at No. 5.

• All the top ten brands remain consistent with the Fall survey (no inclusions or exclusions).

• DC Shoes, which traditionally has maintained the No. 4 position, reinforced its rank and share (3%) at No. 5 for the second consecutive survey cycle.

• Sperry Top-Sider increased share by 1ppt and rank by two positions from the Fall survey. Foot Locker fell 3 positions to No. 9 from No. 7 and lost 1ppt (1%).

• Absent from the top ten preferred brands for males is Journeys, which failed to break into the top ten. While Journeys does appear to be preferred among females, we are


April 2011

somewhat surprised that the retailer does not appear among preferences for males. That said, we recognize many brands listed by young men are sold at Journeys. Journeys ranked No. 12 among males in our most recent survey iteration, up from No. 14 in the Fall, No. 13 in Spring 2010, and 16% in Fall 2009.

• With respect to share concentration, the top five brands accounted for 78% share, flat to Fall, up from 76% in Spring 2010, 73% in Fall 2009 and in Spring 2009. Remarkably, the top ten brands account for 86% share, up from 84% in the Fall, 82% in Spring 2010, 80% in Fall 2009 and 80% in Spring 2009. Eight in ten preference votes are captured in eight brands (Nike, Vans, Adidas, DC Shoes, Puma, Converse, Asics, and Sperry Top-Sider) and two retailers (Foot Locker, Finish Line).

Exhibit 78

AVERAGE - INCOME STUDENT SURVEY – FOOTWEAR BRAND PREFERENCES , MALES






4 Converse 3% 4 Converse 3% 4 DC Shoes 3% 4 DC Shoes 3%

5 DC Shoes 2% 5 DC Shoes 2% 5 Puma 3% 5 Converse 3%

6 Puma 2% 6 Foot Locker 2% 6 Converse 2% 6 Puma 3%

7 Sperry Top-Sider 2% 7 Puma 1% 7 Foot Locker 1% 7 New Balance 1%

Finish Line 2% 8 Finish Line 1% 8 New Balance 1% 8 Finish Line 1%

9 Foot Locker 1% 9 Sperry Top-Sider 1% 9 Finish Line 1% 9 Foot Locker 1%

10 Asics 1% Asics 1% 10 Sperry Top-Sider 1% 10 Asics 1%




2 Vans 6% 2 Adidas 5% 2 Adidas 6% 2 Adidas 7%

3 Adidas 5% 3 Vans 4% 3 Vans 5% 3 Vans 4%

4 DC Shoes 3% 4 Puma 3% 4 DC Shoes 3% 4 Puma 3%

5 Converse 3% 5 DC Shoes 3% 5 Puma 3% 5 DC Shoes 3%

6 Puma 2% 6 Converse 2% 6 New Balance 3% 6 K Sw iss 2%

7 Foot Locker 2% 7 Foot Locker 2% 7 Converse 3% 7 New Balance 2%

8 New Balance 2% 8 Finish Line 1% 8 Finish Line 1% 8 Converse 2%

9 Asics 1% 9 New Balance 1% 9 Reebok 1% 9 Finish Line 2%

Finish Line 1% 10 Asics 1% 10 Adio 1% 10 Foot Locker 2%

Sperry Top-Sider 1%





3 Puma 6% 3 New Balance 4% 3 K Sw iss 5% 3 K Sw iss 5%

4 Vans 4% 4 Vans 4% 4 Vans 3% 4 Reebok 4%

5 New Balance 3% 5 Puma 4% 5 New Balance 3% 5 Vans 3%

6 K Sw iss 3% 6 Reebok 3% 6 Reebok 3% 6 New Balance 3%

7 Converse 3% 7 K Sw iss 3% 7 Converse 3% 7 Converse 2%

8 Reebok 2% 8 Converse 2% 8 Puma 2% Etnies 2%

9 Footlocker 2% 9 Adio 2% 9 Etnies 2% 9 Puma 2%

10 DC Shoes 2% Foot Locker 2% 10 DC Shoes 2% DC Shoes 2%

DVS Shoes 2%

Spring 2005

Rank Brand % Total

1 Nike 31%

2 Adidas 10%

3 K Sw iss 5%

4 New Balance 5%

5 Puma 3%

6 Reebok 3%

7 Foot Locker 3%

8 Doc Marten 2%

9 Vans 2%

10 Converse 2%

DC Shoes 2%




April 2011

ATHLETIC BRAND PREFERENCES

Key Highlights: Brand Preferences – Athletic Brands

• In our recently completed teen survey we found that the top two athletic apparel brands remained unchanged: Nike remains No. 1 and Under Armour is No. 2 in both the upper-income student survey and the average-income student survey.

• Historically, the athletic brand category has been dominated by Nike, with Under Armour, Adidas, Jordan, Puma and The North Face competing for the remaining positions in the top five. However, we have found that Nike has substantially accelerated mindshare gains in the latest two surveys.

• We display five periods of data below to review, but will focus on recently collected responses for Spring 2011 survey with some commentary on any material changes from the prior surveys.

Brand Preferences – Athletic Brands – All Students

Exhibit 79

UPPER- INCOME STUDENT SURVEY – FAVOR ITE SPORT

FAVORITE SPORT - UPPER INCOME STUDENT SURVEY - ALL STUDENTS

Rank Sport % Total Rank Sport % Total Rank Sport % Total Rank Sport % Total Rank Sport % Total

1 Basketball 12% 1 Football 11% 1 Basketball 12% 1 Basketball 12% 1 Basketball 13%

2 Soccer 10% 2 Soccer 10% 2 Football 10% 2 Soccer 10% 2 Soccer 9%

3 Football 8% 3 Basketball 10% 3 Soccer 8% 3 Football 10% 3 Football 9%

4 Running 6% 4 Running 6% 4 Baseball 8% 4 Volleyball 6% 4 Volleyball 7%

5 Baseball 5% 5 Sw imming 5% 5 Running 6% 5 Baseball 5% 5 Running 6%

FAVORITE SPORT - UPPER INCOME STUDENT SURVEY - FEMALE


1 Soccer 9% 1 Soccer 11% 1 Soccer 10% 1 Soccer 13% 1 Volleyball 13%

2 Sw imming 9% 2 Volleyball 10% 2 Volleyball 10% 2 Volleyball 10% 2 Running 9%

3 Running 9% 3 Sw imming 8% 3 Running 9% 3 Sw imming 8% 3 Soccer 9%

4 Volleyball 7% 4 Running 8% 4 Basketball 9% 4 Dance 8% 4 Softball 9%

5 Tennis 7% 5 Dance 7% 5 Sw imming 8% 5 Cheer 8% 5 Dance 8%

FAVORITE SPORT - UPPER INCOME STUDENT SURVEY - MALE


1 Basketball 16% 1 Football 18% 1 Football 16% 1 Football 19% 1 Basketball 18%

2 Football 14% 2 Basketball 14% 2 Baseball 14% 2 Basketball 17% 2 Football 16%

3 Soccer 11% 3 Soccer 10% 3 Basketball 14% 3 Baseball 9% 3 Baseball 10%

4 Baseball 9% 4 Baseball 8% 4 Soccer 9% 4 Soccer 8% 4 Soccer 8%

5 Lacrosse 5% 5 Lacrosse 4% 5 Lacrosse 5% 5 Hockey 6% 5 Hockey 4%

Spring 2011

Spring 2011

Spring 2011 Fall 2010 Spring 2010 Fall 2009 Spring 2009

Fall 2010 Spring 2010 Fall 2009 Spring 2009




April 2011

Key Highlights: Brand Preferences – Athletic Brands

• Overall, in the upper-income student survey, basketball reclaimed the top spot with 12% mindshare, which is up from 10% in Fall 2010 and consistent with the Spring 2010 results. In the average-income student survey basketball remained in the top spot with 13% mindshare which was down 1ppt from the Fall 2010 and Spring 2010 surveys.

• In the upper-income student survey, soccer was the No. 2 sport (10% mindshare) for the second consecutive survey which is no surprise given the focus around last summer’s World Cup. As for the average-income student survey football continued to be No. 2, but mindshare was down 1ppt year-over-year.

• Football was ranked No. 3 in the upper-income student survey with 8% mindshare, while in the average-income student survey soccer was ranked No. 3 with 10% mindshare.

• In terms of gender, upper-income student survey females continue to rank soccer the highest at 9%, although we note that mindshare has been falling. Average-income student survey females also ranked soccer the highest at 10% mindshare although volleyball and running rank a close second. For upper-income student survey males basketball overtook football with 16% mindshare while average-income student survey males continued to rank football as No. 1 with 21% mindshare.

Exhibit 80

AVERAGE - INCOME STUDENT SURVEY – FAVORITE SPORT

FAVORITE SPORT - AVERAGE INCOME STUDENT SURVEY - ALL STUDENTS


1 Basketball 13% 1 Basketball 14% 1 Basketball 14% 1 Football 14% 1 Basketball 15%

2 Football 11% 2 Football 13% 2 Football 12% 2 Basketball 14% 2 Football 13%

3 Soccer 10% 3 Soccer 9% 3 Soccer 9% 3 Soccer 10% 3 Soccer 9%

4 Running 6% 4 Volleyball 6% 4 Volleyball 6% 4 Baseball 6% 4 Volleyball 5%

5 Baseball 5% 5 Baseball 5% 5 Running 6% 5 Volleyball 6% 5 Sw imming 5%

FAVORITE SPORT - AVERAGE INCOME STUDENT SURVEY - FEMALE


1 Soccer 10% 1 Volleyball 12% 1 Volleyball 10% 1 Soccer 12% 1 Basketball 12%

2 Volleyball 9% 2 Soccer 10% 2 Basketball 10% 2 Basketball 12% 2 Soccer 10%

3 Running 9% 3 Basketball 10% 3 Soccer 10% 3 Volleyball 12% 3 Volleyball 9%

4 Basketball 8% 4 Softball 7% 4 Running 8% 4 Softball 9% 4 Sw imming 8%

5 Sw imming 8% 5 Sw imming 7% 5 Sw imming 7% 5 Sw imming 8% 5 Running 6%

FAVORITE SPORT - AVERAGE INCOME STUDENT SURVEY - MALE


1 Football 21% 1 Football 22% 1 Football 21% 1 Football 25% 1 Football 22%

2 Basketball 17% 2 Basketball 18% 2 Basketball 18% 2 Basketball 19% 2 Basketball 19%

3 Baseball 10% 3 Baseball 10% 3 Baseball 10% 3 Baseball 11% 3 Baseball 9%

4 Soccer 9% 4 Soccer 8% 4 Soccer 8% 4 Soccer 9% 4 Soccer 7%

5 Hockey 4% 5 Running 3% 5 Golf 3% 5 Golf 3% 5 Golf 3%






April 2011

• Overall, Nike and Under Armour continue to dominate teen mindshare in both the upper-income student survey and average-income student survey with combined mindshare of 71% and 67%, respectively. These combined percentages are slightly

Exhibit 81

UPPER- INCOME STUDENT SURVEY – ATHLET IC BRAND PREFERENCES

PREFERRED ATHLETIC CLOTHING BRAND - UPPER INCOME STUDENT SURVEY - ALL STUDENTS

Rank Brand % Total Rank Brand % Total Rank Brand % Total Rank Brand % Total Rank Brand % Total

1 Nike 56% 1 Nike 51% 1 Nike 47% 1 Nike 48% 1 Nike 43%

2 Under Armour 15% 2 Under Armour 18% 2 Under Armour 25% 2 Under Armour 25% 2 Under Armour 26%

3 Adidas 5% 3 Adidas 6% 3 Adidas 7% 3 Adidas 6% 3 Adidas 6%

4 The North Face 2% 4 The North Face 2% 4 The North Face 3% 4 Soffe 2% 4 The North Face 4%

5 Jordan 1% 5 Mizuno 1% 5 Soffe 2% 5 Jordan 2% 5 Champion 2%

Puma 2%

PREFERRED ATHLETIC CLOTHING BRAND - UPPER INCOME STUDENT SURVEY - FEMALE





4 The North Face 3% 4 The North Face 2% 4 The North Face 4% 4 Soffe 3% 4 The North Face 5%

5 Champion 1% 5 Mizuno 2% 5 Soffe 3% 5 The North Face 2% 5 Champion 2%

PREFERRED ATHLETIC CLOTHING BRAND - UPPER INCOME STUDENT SURVEY - MALE





4 Jordan 2% 4 The North Face 2% 4 Jordan 2% 4 Jordan 2% 4 The North Face 3%

5 The North Face 2% 5 Jordan 2% 5 Puma 1% 5 Reebok 1% 5 Puma 2%

Spring 2011

Spring 2011





Exhibit 82

AVERAGE - INCOME STUDENT SURVEY – ATHLET IC BRAND PREFERENCES

PREFERRED ATHLETIC CLOTHING BRAND - AVERAGE INCOME STUDENT SURVEY - ALL STUDENTS





4 The North Face 1% 4 Jordan 2% 4 The North Face 3% 4 Jordan 2% 4 Jordan 3%

5 Jordan 1% 5 The North Face 2% 5 Jordan 2% 5 The North Face 2% 5 The North Face 2%

Puma 1%

PREFERRED ATHLETIC CLOTHING BRAND - AVERAGE INCOME STUDENT SURVEY - FEMALE





4 The North Face 2% 4 The North Face 3% 4 The North Face 4% 4 The North Face 3% 4 The North Face 3%

5 Puma 1% 5 Soffe 1% 5 Soffe 1% 5 Soffe 2% 5 Soffe 2%

PREFERRED ATHLETIC CLOTHING BRAND - AVERAGE INCOME STUDENT SURVEY - MALE





4 Jordan 2% 4 Jordan 3% 4 Jordan 3% 4 Jordan 4% 4 Jordan 4%

5 The North Face 1% 5 The North Face 1% 5 The North Face 1% 5 The North Face 1% 5 The North Face 1%






April 2011

down from the Spring 2010 upper-income student survey total of 72% and slightly up from the Spring 2010 average-income student survey total of 66%.

• In the upper-income student survey Nike grew its No. 1 mindshare from 47% in the Spring 2010 to 56% currently and in the average-income student survey grew from 47% to 51% over the same period. Under Armour remains firmly entrenched in the No. 2 position with 15% mindshare in the upper-income student survey and 16% in the average-income student survey. We note mindshare in the upper-income student survey has come down 10ppt from the Spring 2010 and down 3ppt in the average-income student survey.

• Results by gender tell a similar story: both genders rated Nike and Under Armour No. 1 and No. 2, respectively. In the women's upper-income student survey, Nike captured 55% mindshare (+7ppt from Spring 2010), while in the average-income student survey, Nike captured 50% mindshare (+3ppt from Spring 2010). Men also continue to prefer Nike with the brand getting 57% of the total vote in the upper-income student survey and 51% in the average-income student survey. These are increases of 11ppt and 4ppt from Spring 2010, respectively.

• In both surveys, Under Armour continues well ahead of the No. 3 athletic apparel brand (Adidas) and well behind Nike. In the upper-income student survey, The North Face maintained its No. 4 spot with 2% mindshare (down 1ppt from Spring 2010) and Jordan became No. 5 (1% mindshare) replacing Soffe from the Spring 2010. In the average-income student survey, The North Face lost 2ppt of mindshare from the Spring 2010 survey but remained in the No. 4 spot while Jordan stayed at No. 5 losing 1ppt of mindshare.

Exhibit 83

UPPER- INCOME STUDENT SURVEY – ATHLET IC BRAND PREFERENCES , BY SPORT

UNDER ARMOUR VS. NIKE BY SPORT - UPPER INCOME STUDENT SURVEY - ALL STUDENTS

Sport UA NKE Sport UA NKE Sport UA NKE Sport UA NKE Sport UA NKE

Basketball 12% 88% Football 34% 66% Basketball 25% 75% Basketball 19% 81% Basketball 26% 74%

Soccer 10% 90% Soccer 17% 83% Football 49% 51% Soccer 33% 67% Soccer 31% 69%

Football 21% 79% Basketball 13% 87% Soccer 30% 70% Football 45% 55% Football 45% 55%

Running 10% 90% Running 15% 85% Baseball 33% 67% Volleyball 33% 67% Volleyball 40% 60%

Baseball 31% 69% Sw imming 9% 91% Running 14% 86% Running 29% 71% Running 33% 67%

% of total UA and NKE votes

Top five sports by gender

UNDER ARMOUR VS. NIKE BY SPORT - UPPER INCOME STUDENT SURVEY - FEMALE


Soccer 11% 89% Soccer 19% 81% Soccer 43% 57% Soccer 32% 68% Volleyball 40% 60%

Sw imming 14% 86% Volleyball 31% 69% Volleyball 38% 63% Volleyball 32% 68% Running 30% 70%

Running 11% 89% Sw imming 8% 92% Running 14% 86% Sw imming 21% 79% Soccer 37% 63%

Volleyball 42% 58% Running 17% 83% Basketball 18% 82% Dance 39% 61% Softball 64% 36%

Tennis 14% 86% Dance 9% 91% Sw imming 38% 62% Cheer 57% 43% Dance 38% 62%



UNDER ARMOUR VS. NIKE BY SPORT - UPPER INCOME STUDENT SURVEY - MALE

Sport UA NKE SPORT UA NKE SPORT UA NKE SPORT UA NKE SPORT UA NKE

Basketball 9% 91% Football 36% 64% Football 60% 40% Football 49% 51% Basketball 20% 80%

Football 20% 80% Basketball 12% 88% Baseball 36% 64% Basketball 22% 78% Football 45% 55%

Soccer 10% 90% Soccer 15% 85% Basketball 37% 63% Baseball 23% 77% Baseball 54% 46%

Baseball 31% 69% Baseball 43% 57% Soccer 16% 84% Soccer 36% 64% Soccer 18% 82%

Lacrosse 35% 65% Lacrosse 33% 67% Lacrosse 59% 41% Hockey 28% 72% Hockey 40% 60%



Spring 2011

Spring 2011

Spring 2011






April 2011

Key Highlights: Athletic Brand Preferences – Under Armour versus Nike

• Under Armour’s brand continues to resonate well with teens, however, for the second consecutive survey, mindshare loss to Nike accelerated in the majority of the top five sports for both genders.

• Football and baseball are historically strong for Under Armour, however, in both the upper-income student survey and the average-income student survey mindshare has fallen dramatically.

• For young women in both the upper-income student survey and the average-income student survey, Nike dominates four out of the top five spots (above 80% mindshare in each of the four).

• Under Armour’s brand is strongest within upper-income student survey volleyball and average-income student survey running.

• While Under Armour appears to have lost mindshare in this Spring’s surveys we note that the brand continues to be firmly entrenched as the No. 2 athletic apparel brand.

Exhibit 84

AVERAGE - INCOME STUDENT SURVEY – ATHLET IC BRAND PREFERENCES , BY SPORT

UNDER ARMOUR VS. NIKE BY SPORT - AVERAGE INCOME STUDENT SURVEY - ALL STUDENTS


Basketball 16% 84% Basketball 18% 82% Basketball 15% 85% Football 41% 59% Basketball 17% 83%

Football 27% 73% Football 32% 68% Football 41% 59% Basketball 18% 82% Football 44% 56%

Soccer 14% 86% Soccer 20% 80% Soccer 26% 74% Soccer 24% 76% Soccer 23% 77%

Running 24% 76% Volleyball 17% 83% Baseball 39% 61% Baseball 43% 57% Baseball 42% 58%

Baseball 29% 71% Baseball 33% 67% Running 24% 76% Volleyball 21% 79% Volleyball 28% 72%



UNDER ARMOUR VS. NIKE BY SPORT - AVERAGE INCOME STUDENT SURVEY - FEMALE


Soccer 16% 84% Volleyball 17% 83% Volleyball 26% 74% Soccer 26% 74% Basketball 15% 85%

Volleyball 17% 83% Soccer 23% 77% Basketball 14% 86% Basketball 16% 84% Soccer 24% 76%

Running 21% 79% Basketball 17% 83% Soccer 32% 68% Volleyball 21% 79% Volleyball 30% 70%

Basketball 19% 81% Softball 32% 68% Running 25% 75% Softball 44% 56% Sw imming 19% 81%

Sw imming 15% 85% Sw imming 17% 83% Sw imming 21% 79% Sw imming 16% 84% Running 16% 84%



UNDER ARMOUR VS. NIKE BY SPORT - AVERAGE INCOME STUDENT SURVEY - MALE

Sport UA NKE SPORT UA NKE SPORT UA NKE SPORT UA NKE SPORT UA NKE

Football 28% 72% Football 32% 68% Football 43% 57% Football 42% 58% Football 48% 52%

Basketball 15% 85% Basketball 18% 82% Basketball 16% 84% Basketball 18% 82% Basketball 18% 82%

Baseball 31% 69% Baseball 34% 66% Baseball 40% 60% Baseball 46% 54% Baseball 43% 57%

Soccer 12% 88% Soccer 18% 82% Soccer 16% 84% Soccer 16% 84% Soccer 20% 80%

Hockey 29% 71% Running 23% 77% Golf 16% 84% Golf 31% 69% Golf 26% 74%








April 2011

POP QUIZ! FRESH INSIGHTS ON FASHION

In our sophomore Pop Quiz! in-class survey, we continue to gain insights on the “right now” topics like denim, fashion relevance, up-and-down-trending brands and active lifestyles. For our Spring 2011 in-class survey, we had more than 450 students respond representing an average age of 16.3 and a relatively balanced split between the genders (female, 55%; male 45%). We do not apply the zip code analysis to this in-class survey but note that the majority of schools we visit in person are what we would characterize as “upper-income” households when looking at demographics. The primary topics on which we surveyed our students include perceptions and the importance of fashion, the relevance of their wardrobe staple – denim, and insights into how they spend time and money around their active lifestyles.

The Kids Are Increasingly Price Sensitive From Fall 2010 When we ask about the most important factor when making a clothing purchase ranking price-value, style-fashion, need using a scale of 1 (most important) to 3 (least important), we found that in our Spring 2011 survey “price-value” saw an increasing shift of the “1-most important” responses relative to “style-fashion” last Fall. That said, we note that “need” seems to be less of a factor which could signal, on the whole, that teens are looking to re-engage in spending, but dipping their proverbial toe in the water by being price-sensitive.

In-Class – Demographic Data

Exhibit 85

POP QUIZ ! IN -CLASS SURVEY - DEMOGRAHPICS


Average Age: 16.3 16.5

Gender Split:

Female 55% 48%

Male 45% 52%


Fresh Insights on Fashion Perceptions


April 2011

Delving further into the gender divide on fashion, we asked the students to decide on whether “brand” or “fashion” is most important when making a clothing purchase. We are noticing that “brand” ticked up four points among each of our polled student groups: female and male. That said, “fashion” still takes the cake among our female shoppers at a ratio of four-to-one. This, we believe, is further confirmation that retailers likely need to be more fashion-driven (which entails process, data, design, and execution) as compared with those focused on heavy logos and branding.

What is “Fast Fashion?” Is it fast? Is it fashion? It’s both, but it’s rarely “logo.” During the earliest era of our Taking Stock With Teens survey project from 2001 to 2005, Forever 21 (one of the more prominent national Fast Fashion retailers) danced around the lower half of our Top 10 preferred retailers among female students. Beginning in 2006, Forever 21 emerged as a near consistent presence in the upper half of our Top 10 list and has held the No. 1 or No. 2 position since Fall 2007 and continues in the No. 1 position in our most recent Spring 2011 survey. So is it recession-friendly or preference for fashion? Only future hindsight will be able to dictate for sure, but what is emerging as a sustainable trend is that “she” prefers to scavenge for her own style in a fashion-relevant retail venue rather than choose a uniform emblazoned with a logo.

Exhibit 86

MOST IMPORTANT FACTOR WHEN PURCHASING CLOTHES

Spring 2011

Price Style Need

Female 36% 34% 28%

Male 35% 25% 34%

Fall 2010

Price Style Need

Female 13% 50% 35%

Male 20% 36% 40%


Exhibit 87

MORE IMPORTANT FACTOR WHEN PURCHASING CLOTHES

Spring 2011

Brand Fashion

Female 18% 76%

Male 44% 51%

Fall 2010

Brand Fashion

Female 14% 84%

Male 48% 50%



April 2011

Another way to calibrate the importance of fashion in a purchase decision can be demonstrated in the question we asked students about watches. In countless meetings over the past seven years, investors have questioned the relevancy of Fossil in an era of smart phones—a perfectly logical assumption given that these kids don’t know a world without cell phones and in most cases smart phones. That said, when we asked those students who do wear a watch if they chose to wear one for fashion-only or function-only (to tell time), female students choose fashion five-to-one. Fashion. It’s a critical decision point when making clothing purchases. This is crucial for investors to understand because of the margin implications the industry is facing as input costs increase and price increases are likely to ensue.

Denim Intent to Purchase Increasing A question we did not repeat this Spring but worth mentioning here is the current ownership (in pairs) of denim—a key component to the teen wardrobe. Last Fall, we found that 38% percent of the females we surveyed indicated they own 1 to 10 pairs of jeans with another 19% indicating 10 to 15 pairs. Their male counterparts, in true need-based fashion, cited a wardrobe of 1 to 5 pairs for 57% of the respondents with another 29% indicating five to 10.

Exhibit 88

THE R ISE OF “FAST FASHION” US ING FOREVER 2 1 AS A PROXY

0

2

4

6

8

10

12

14

SP'02 FA'02 SP'03 FA'03 SP'04 FA'04 SP'05 FA'05 SP'06 FA'06 SP'07 FA'07 SP'08 FA'08 SP'09 FA'09 SP'10 FA'10 SP'11

Ran

k

The rise in "fast fashion" best demonstrated in Forever 21's steady, consistent improvement in rankings.


End of Denim Dominance? Not So.


April 2011

No doubt denim has appeared to be in the decline phase this past year. That said, it appears the intent to purchase denim over the next six months is increasing from our Fall 2010 survey.

While experience has authored a pattern of fashion preference for non-denim pants (i.e. khakis) in the Spring fashion cycle as compared with the Fall fashion cycle, we noticed that the preference for denim over non-denim is still prevalent. Among females, denim declined by four points to non-denim, which could be tied to the many options Spring brings for “bottoms” among females: skirts, shorts, dresses, capris. Among our male students, denim strengthened its wardrobe position by 6ppt. This, we believe, continues to show the stability of this category as a dominant portion of the teen wardrobe.

Exhibit 89

NUMBER OF PA IRS OF DENIM JEANS OWNED IN CURRENT WARDROBE

Fall 2010

1-5 5-10 10-15 15-20 20+

Female 24% 38% 19% 8% 9%

Male 57% 29% 6% 3% 3%


Exhibit 90

NUMBER OF DENIM JEANS INTENDED TO BE PURCHASED IN NEXT S IX MONTHS

Spring 2011

Avg.

Female 5

Male 5

Fall 2010

Avg.

Female 4

Male 3



April 2011

Show-And-Tell: Who’s Hot and Who’s Not In our second Pop Quiz! in-class survey, we continue to ask the teens to tell us who is falling out of favor. In our Spring 2011 survey, we also asked them to identify a brand they just started to wear to gauge uptrending brands. Similar to last Fall, Hollister, Aeropostale, and Abercrombie & Fitch are the top three most frequently cited brands in our in-class survey when we asked female students to comment on an unaided basis about the brand they no longer wear. We do note, however, that Abercrombie & Fitch dropped from No. 1 to No. 3 in ranking and from 19% to 11% in percentage of total votes. When we asked the male students, we had a complete swap out of the top three most mentioned brands in their naming of Gap, Adidas, and Aeropostale versus last survey’s American Eagle, Hollister, and Abercrombie & Fitch.

Exhibit 91

INTENT TO PURCHASE PANTS – J EANS VERSUS NON-DENIM

Spring 2011

Jeans Non-Denim

Female 84% 14%

Male 80% 18%

Fall 2010

Jeans Non-Denim

Female 88% 11%

Male 74% 25%


Trending Down/ Trending Up: We Show-And-Tell the Brands

Exhibit 92

BRAND NO LONGER WORN – FEMALE STUDENTS


Rank Brand No Longer Worn % Total Rank Brand No Longer Worn % Total

1 Hollister 16% 1 Abercrombie & Fitch 19%

2 Aeropostale 15% 2 Hollister 16%

3 Abercrombie & Fitch 11% 3 Aeropostale 15%

4 Limited Too 8% 4 Limited Too 8%

5 Gap 6% 5 American Eagle 4%

6 Old Navy 4% 6 Gap 3%

7 Baby Phat 2% 7 Forever 21 2%

8 American Eagle 2% 8 Levis 2%

9 Skechers 2% 9 Old Navy 1%

Southpole (tied) 2% 10 Apple Bottom Jeans 1%

Wet Seal (tied) 2% Baby Phat 1%



April 2011

We added the second question about new brands being worn by students and found an interesting trend toward Fast Fashion in the top spot, Forever 21. This squares with our preferred brands question in which Forever 21 ranks No. 1 as the preferred destination among the “upper income” female students we poll. Among the male students, Nike (including the Air Jordan brand), Vans, and Hollister rank among the uptrending brands. With Nike and Vans taking the top two spots among our “upper income” males, this too squares with the balance of our research project.

Exhibit 93

BRAND NO LONGER WORN – MALE STUDENTS


Rank Brand No Longer Worn % Total Rank Brand No Longer Worn % Total

1 Gap 10% 1 American Eagle 9%

2 Adidas 9% 2 Hollister 8%

3 Aeropostale 5% 3 Abercrombie & Fitch 7%

4 Nike 4% Gap 7%

5 Abercrombie & Fitch 4% 5 Adidas 4%

DC 4% Aeropostale 4%

Southpole 4% 7 Southpole 4%

Under Armour 4% 8 Nike 4%

9 Hollister 3% 9 Old Navy 3%

10 American Eagle 3% 10 Quiksilver 3%


Exhibit 94

NEW BRAND START ING TO WEAR – FEMALE STUDENTS

Spring 2011

Rank New Brand Starting To Wear % Total

1 Forever 21 15%

2 American Eagle 6%

3 Aeropostale 5%

4 Hollister 4%

5 Urban Outfitters 4%

6 (Name Withheld) 3%

7 Victoria's Secret 2%

Know Style (tied) 2%

Abercrombie (tied) 2%

Charlotte Russe (tied) 2%

The North Face (tied) 2%



April 2011

Broadly speaking, Nike has continued to strengthen during the course of our multi-year research project. We started to use the Pop Quiz! survey format to gain insights into teens’ active lifestyles. We found that two-thirds of teens indicate they spend up to ten hours of their week exercising or working out. They also spend a goodly amount of money on active apparel per year—an average spend of about $121 by our calculation based on our Spring 2011 survey.

Exhibit 95

NEW BRAND START ING TO WEAR – MALE STUDENTS

Spring 2011

Rank New Brand Starting To Wear % Total

1 Nike 14%

2 Vans 6%

3 Hollister 5%

4 American Eagle 4%

5 Levi's 3%

6 H&M 3%

Polo Ralph Lauren (tied) 3%

Under Armour (tied) 3%

10 Abercrombie 2%

Aeropostale (tied) 2%


Exhibit 96

T IME SPENT WORKING OUT OR EXERCIS ING PER WEEK

Spring 2011

0 1-5 6-10 11-15 16-20 21+

Female 5% 44% 26% 11% 5% 5%

Male 5% 35% 26% 18% 6% 6%

Fall 2010

0 1-5 6-10 11-15 16-20 21+

Female 7% 42% 22% 15% 5% 6%

Male 5% 24% 26% 19% 10% 13%



April 2011

We added an open-ended question to this survey to gain insights into the popular fashion trends in school. In tabulating the results, the teens indicated that two of the top three fashion trends are shoe-related: Vans and TOMS shoes. Also worth mentioning, is that denim continues to be popular among students—further confirmation in this category.

Exhibit 97

ANNUAL SPEND ON ACT IVE APPAREL

Spring 2011

$0-$25 $26-$75 $76-$150 $151-$200 $201+

Female 27% 21% 15% 9% 8%

Male 27% 24% 11% 7% 14%

Fall 2010

$0-$25 $26-$75 $76-$150 $151-$200 $201+

Female 31% 32% 18% 8% 7%

Male 22% 33% 21% 9% 11%


Exhibit 98

TOP FASHION TRENDS “R IGHT NOW”

Spring 2011

Rank Most Popular Fashion Trend % Total

1 Vans 10%

2 Jeans / Skinny Jeans 9%

3 TOMS Shoes 8%

4 Leggings / Jeggings 5%

5 Nike 5%

UGG 5%

7 Boots 4%

Flannel / Plaid (tied) 4%

9 Hollister 3%

Polo Ralph Lauren (tied) 3%



April 2011

SOURCES OF INFLUENCE

The teenage years are highly formative, and most teens’ decisions are influenced by a wide variety of factors. In an effort to better understand which factors are the most influential in driving teen purchasing decisions, we asked students to rank from a list which considerations affect their clothing and footwear choices. Students were asked to rank the following choices from 1 to 7: Friends, Internet, Magazines, Movies, Sports, Television, and Other. The following exhibit details aggregative ranks for students across the nation.

Key Highlights: Sources of Influence – Upper-Income Student Survey

• For the 15th consecutive survey, upper-income teens identified “Friends” as having the strongest influence over their clothing and footwear purchases. Interestingly, the Internet is increasing in importance as a percentage of the total primarily because males increased it as a more influential source than prior surveys; in the past, Television ranked No. 3 in male influence, but for the second consecutive survey Internet now holds the No. 3 spot. We cannot dismiss the significant impact and role of social media in the life of a teen and we are beginning to see it as they rank the Internet higher as a source of influence.

• All that being said, receiving the affirmation of friends does not mean that today’s teens are demonstrating similar brand choices as their friends – a trend we have been

Sources of Influence – All Students

Exhibit 99

UPPER- INCOME STUDENT SURVEY – SOURCES OF INFLUENCE , ALL STUDENTS

SOURCES OF INFLUENCE - UPPER-INCOME STUDENt SCHOOL SURVEY - ALL STUDENTS

Rank Spring 2011 Fall 2010 Spring 2010 Fall 2009 Spring 2009 Fall 2008 Spring 2008 Fall 2007 Spring 2007 Fall 2006 Spring 2006

1 Friends Friends Friends Friends Friends Friends Friends Friends Friends Friends Friends

2 Internet Internet Television Television Television Magazines Television Television Magazines Television Television

3 Television Television Magazines Magazines Magazines Television Magazines Magazines Television Magazines Magazines

4 Magazines Magazines Internet Internet Internet Movies Movies Movies Movies Movies Movies

5 Movies Sports Movies Movies Movies Internet Internet Internet Internet Internet Internet

6 Sports Movies Sports Sports Sports Sports Sports Sports Sports Sports Other

7 Other Other Other Other Other Other Other Other Other Other Sports

SOURCES OF INFLUENCE - UPPER-INCOME STUDENT SCHOOL SURVEY - FEMALE



2 Magazines Magazines Magazines Magazines Magazines Magazines Magazines Magazines Magazines Magazines Magazines

3 Televsion Televsion Television Television Television Television Television Television Television Television Television

4 Internet Internet Internet Movies Movies Movies Movies Movies Movies Movies Movies

5 Movies Movies Movies Internet Internet Internet Internet Internet Internet Internet Internet

6 Sports Sports Sports Sports Sports Sports Sports Sports Sports Sports Other


SOURCES OF INFLUENCE - UPPER-INCOME STUDENT SCHOOL SURVEY - MALE



2 Sports Sports Sports Sports Sports Sports Sports Sports Sports (2) Television Television

3 Internet Internet Television Television Television Television Television Television Television (2) Sports Sports

4 Television Television Internet Internet Internet Internet Movies Movies Movies Movies Internet

5 Movies Movies Movies Movies Movies Movies Internet Internet Internet Magazines Movies

6 Magazines Magazines Magazines Magazines Magazines Magazines Magazines Magazines Magazines Internet Magazines

7 Other Other Other Other Other Other Other Other Other Other Other



April 2011

observing consistently over the last three years. Through our survey program, we would previously observe “clothing cliques” or groups of friends that are identifiable by similar fashion brands or styles. Today, with greater choice, convergence of lifestyle categories, spirit of independence, and the proliferation of media, we think teens are more likely to desire to look different. This progression away from brand concentration, in our view, has resulted in the successful emergence of Fast Fashion retailers and the further segmentation of retail by age and lifestyle profile. We expect to continue to monitor this trend in concentration closely, particularly as it relates to the broader fashion cycle.

• We also note that Magazines has historically ranked as a No. 3 source of influence among all students, but for the second survey period in a row that position now belongs to Television. The displacement of Magazines could be the result of more on-line access to television shows via laptops, smartphones, and tablets.

Key Highlights: Sources of Influence – Average-Income Student Survey

• For the 13th consecutive survey average-income teens identified “Friends” as having the strongest influence over their clothing and footwear purchases. Similar to Upper-Income teens, Average-Income teens continue to raise the Internet as an increasingly important influence factor in their lives. As mentioned earlier, we believe the pervasive nature of the Internet on handheld devices coupled with social networking sites is increasingly influential on teen lives.

• Both average-income and upper-income teens share the same sources of influences this survey cycle. In the Fall, Upper-Income teens had ranked Sports (No. 5) higher than Movies (No. 6) but this Spring the positions were reversed.

Exhibit 100

SOURCES OF INFLUENCE – AVERAGE - INCOME STUDENT SURVEY

SOURCES OF INFLUENCE - AVERAGE-INCOME STUDENT SURVEY - ALL STUDENTS



2 Internet Internet Television Television Television Television Television Television Television Television Television

3 Television Television Internet Internet Internet Internet Magazines Magazines Magazines Magazines Magazines

4 Magazines Magazines Magazines Magazines Magazines Magazines Internet Internet Movies Movies Movies

5 Movies Movies Movies Movies Movies Movies Movies Movies Internet Internet Internet



SOURCES OF INFLUENCE - AVERAGE-INCOME STUDENT SURVEY - FEMALE



2 Magazines Magazines Television Television Television Television Television Television Magazines Television Magazines

3 Internet Internet Internet Magazines Magazines Magazines Magazines Magazines Television Magazines Television

4 Television Television Magazines Internet Internet Internet Movies Movies Movies Movies Movies

5 Movies Movies Movies Movies Movies Movies Internet Internet Internet Internet Internet



SOURCES OF INFLUENCE - AVERAGE-INCOME STUDENT SURVEY - MALE


1 Friends Friends Friends Friends Friends Friends Friends Movies Friends Friends Friends

2 Sports Sports Television Television Television Television Television Friends Television Television Television

3 Internet Internet Internet Sports Sports Sports Sports Sports Sports Sports Sports

4 Television Television Magazines Internet Internet Internet Internet Television Internet Internet Magazines

5 Movies Movies Movies Movies Movies Movies Movies Internet Movies Movies Movies

6 Magazines Magazines Sports Magazines Magazines Magazines Magazines Magazines Magazines Magazines Internet

7 Other Other Other Other Other Other Other Other Other Other Other



April 2011

In order to appreciate the extent to which media influences teen fashion brand choices, we polled respondents about what television shows and movies they are watching, music artists/groups they are listening to, and magazines they are reading. While respondents were permitted to indicate more than one answer, the following exhibits detail results based on the student’s first choice in each category.

Media Influences – All Students

Exhibit 101

MEDIA INFLUENCES , MUSIC – UPPER - INCOME STUDENT SURVEY The Grammy Goes To…

Rank Spring 2011 % Rank Fall 2010 % Rank Spring 2010 % Rank Fall 2009 % Rank Spring 2009 %

1 Wiz Khalifa 7% 1 Lil Wayne 7% 1 Lil Wayne 11% 1 Lil Wayne 11% 1 Lil Wayne 10%

2 Eminem 6% 2 Eminem 7% 2 Drake 3% 2 Taylor Sw ift 5% 2 Taylor Sw ift 4%

3 Lil Wayne 3% 3 Drake 4% 3 Lady Gaga 3% 3 Drake 2% 3 Lady Gaga 2%

4 Taylor Sw ift 3% 4 Taylor Sw ift 3% 4 Taylor Sw ift 3% 4 Jay-Z 2% 4 Blink 182 2%

5 Kid Cudi 3% 5 Kid Cudi 3% 5 Justin Bieber 2% 5 Blink 183 2% Kanye West 2%

6 Justin Bieber 2% 6 John Mayer 2% Trey Songs 2% 6 Eminem 2% 6 Rascal Flatts 2%

7 Mac MIller 2% 7 Wiz Khalifa 2% 7 Jay-Z 1% 7 Jonas Bros. 2% T.I. 2%

8 Drake 2% 8 Trey Songz 2% Keyshia Cole 1% 8 Linkin' Park 2% 8 Chris Brow n 1%

9 Lupe Fiasco 2% 9 Dave Matthew s Band 1% Lady Antebellum 1% 9 Beyonce 1% 9 8 artists tied for 9th 1%

10 Linkin Park 1% 10 Lady Gaga 1% 10 Brad Paisley 1% 10 Kings of Leon 1%Lady Gaga 1%

Rank Fall 2008 % Rank Spring 2008 % Rank Fall 2007 % Rank Spring 2007 % Rank Fall 2006 %

1 Lil Wayne 15% 1 Lil Wayne 7% 1 Lil Wayne 5% 1 Rascal Flatts 6% 1 Rascal Flatts 4%

2 Jonas Brothers 2% 2 Rascal Flatts 3% Rascal Flatts 5% 2 Red Hot Chili Peppers 3% 2 Red Hot Chili Peppers 3%

3 Chris Brow n 2% 3 Chris Brow n 2% 3 Boys Like Girls 3% 3 Justin Timberlake 2% 3 Danity Kane 3%

4 Rascal Flatts 2% 4 Linkin' Park 2% 4 Kanye West 2% 4 The Fray 2% Dave Matthew s 3%

5 Rihanna 2% 5 Taylor Ww ift 1% 5 Linkin' Park 2% 5 All American Rejects 2% 5 Fray 3%

6 T.I. 2% 6 Danity Kane 1% 6 Fall Out Boy 2% Incubus 2% 6 Panic At The Disco 2%

7 Kanye West 2% 7 Kanye West 1% 7 Dave Matthew s 2% 7 Cartel 2% 7 311 2%

8 Linkin' Park 2% 8 Blink 182 1% Red Hot Chili Peppers 2% Dave Matthew s 2% 8 50 Cent 1%

9 Beatles 1% 9 Jack Johnson 1% 9 T Pain 2% Jack Johnson 2% Fall Out Boy 1%

10 Coldplay 1% 10 Nickelback 1% 10 50 Cent 1% 10 50 Cent 2% Linkin' Park 1%

Blink 182 1% Nickelback 1%Soulja Boy 1%


Exhibit 102

MEDIA INFLUENCES , MOVIES – UPPER - INCOME STUDENT SURVEY The Oscar Goes To…


1 Inception 10% 1 Inception 12% 1 The Hangover 16% 1 The Hangover 16% 1 Dark Knight 10%

2 The Hangover 6% 2 The Hangover 9% 2 Avatar 10% 2 Transformers 7% 2 Pineapple Express 8%

3 The Fighter 3% 3 Avatar 4% 3 Tw ilight: New Moon 4% 3 Tw ilight 5% 3 Step Brothers 6%

4 Due Date 3% 4 Step Brothers 2% 4 Blindside 3% 4 Inglorious Bastards 3% 4 Tw ilight 4%

5 Step Brothers 2% 5 The Last Song 2% Dear John 3% 5 Dark Knight 3% 5 Taken 4%

6 Battle: Los Angeles 2% 6 Easy A 2% 6 Transformers 2% 6 The Proposal 2% 6 Watchmen 2%

7 Social Netw ork 2% The other guys 2% 7 The Notebook 2% Step Brothers 2% 7 Not That Into You 2%

The Other Guys 2% 8 Dinner for Schmucks 2% 8 Alice in Wonderland 2% 8 The Notebook 2% 8 Role Models 2%

Avatar 2% 9 Takers 2% She's Out Of My League 2% 9 I Love You Man 2% 9 Transformers 2%

HP Deathly Hallow s I 2% Toy Story 3 2% 10 Law Abiding Citizen 2% Pineapple Express 2% 10 Fired Up 2%Grow n Ups 1% The Notebook 2%


1 Dark Knight 24% 1 Superbad 12% 1 Superbad 22% 1 300 12% 1 Pirates of Caribbean 8%

2 Pineapple Express 8% 2 I Am Legend 5% 2 300 7% 2 Step Up 5% 2 Talladega Nights 6%

3 Step Brother 4% 3 300 5% 3 Knocked Up 6% 3 The Departed 4% 3 Wedding Crashers 5%

4 Superbad 4% 4 Juno 4% 4 Transformers 4% 4 Borat 4% 4 Jackass 2 5%

5 Notebook 3% 5 27 Dresses 3% 5 Disturbia 3% 5 Talladega Nights 4% 5 Step Up 4%

6 Iron man 2% 6 Transformers 2% 6 Rush Hour 3 3% 6 The Holiday 3% 6 She's The Man 3%

7 House Bunny 2% 7 American Gangster 2% 7 Hallow een 2% 7 The Notebook 3% Snakes On A Plane 3%

8 Tropic Thunder 2% 8 P.S. I Love You 2% The Notebook 2% 8 Pirates of Caribbean 2% 8 The Notebook 3%

9 Hancock 2% 9 Step Up 2 2% 9 Hair Spray 2% 9 Pursuit of Happyness 2% 9 Beerfest 2%

P.S. I Love You 1% 10 Across the Universe 1% 10 Harry Potter 2% 10 Devil Wears Prada 2% Little Miss Sunshine 2%

Never Back Dow n 1%The Notebook 1%



April 2011

Key Highlights: Sources of Influence – Upper-Income Student Survey

• While it is hard to measure the influence that shows such as The O.C. and Laguna Beach had on teen brand preferences, the rise in Action Sports Lifestyle brands from five years ago would suggest there is a pervasive and powerful media message backing the lifestyle. We note Jersey Shore, Pretty Little Liars and ESPN’s Sports Center all landing on the scene this year in the top ten.

• Viral and social marketing via the Internet is the latest buzz in the advertising community. Efforts to connect with teens online are being planned by most retailers. We have monitored and observed a significant increase the usage of email solicitations and tie-backs to store purchases with online content. While it’s difficult to differentiate responses identifying with “friends” as those that are electronically based, we suspect

Exhibit 103

MEDIA INFLUENCES , TELEV IS ION – UPPER - INCOME STUDENT SURVEY The Emmy Goes To…


1 Jersey Shore 9% 1 Jersey Shore 11% 1 Family Guy 11% 1 Family Guy 9% 1 Family Guy 8%

2 Pretty Little Liars 7% 2 Family Guy 6% 2 SportsCenter 4% 2 That 70s Show 5% 2 Gossip Girl 6%

3 SportsCenter 4% 3 SportsCenter 4% 3 Bad Girls Club 3% 3 Gossip Girl 4% 3 House 4%

4 Family Guy 3% 4 The Office 4% 4 SouthPark 3% The Office 4% 4 The Office 4%

Tw o and a Half Men 3% 5 That 70's Show 3% 5 Secret Life Am. Teen 3% 5 SportsCenter 4% 5 That 70s Show 4%

6 Tosh.O 3% 6 Gossip Girl 2% 6 Jersey Shore 2% 6 House 4% 6 Secret Life Am. Teen 4%

7 The Office 3% Pretty Little Liars 2% 7 George Lopez 2% 7 One Tree Hill 3% 7 Scrubs 3%

Glee 3% 8 Southpark 2% 8 Lost 2% 8 SouthPark 2% 8 SportsCenter 3%

9 That '70s show 2% 9 Glee 2% 9 90210 1% 9 The Hills 2% 9 24 3%

10 How I Met Your Mother 2% 10 Entourage 2% 10 Everybody Hates Chris 1% 10 Secret Life Am. Teen 2% 10 Greys Anatomy 3%Tosh O 2% Southpark 3%


1 Family Guy 7% 1 Family Guy 8% 1 The Hills 11% 1 Grey's Anatomy 9% 1 Family Guy 8%

2 Gossip Girl 7% 2 One Tree Hill 6% 2 Family Guy 6% 2 The Hills 7% 2 Grey's Anatomy 7%

3 The Hills 5% 3 SportsCenter 5% 3 SportsCenter 6% 3 SportsCenter 5% 3 Laguna Beach 7%

4 ESPN 5% 4 The Hills 4% 4 Greys Anatomy 5% 4 Family Guy 5% 4 SportsCenter 4%

One Tree Hill 5% 5 Greys Anatomy 3% 5 Friends 3% 5 America's Top Model 4% 5 Simpsons 4%

6 That 70s Show 4% 6 Southpark 3% 6 That 70s Show 3% That 70's Show 4% 6 LOST 3%

7 House 3% 7 America's Top Model 3% 7 One Tree Hill 3% 7 One Tree Hill 4% 7 The O.C. 3%

The Office 3% Lost 3% 8 America's Top Model 3% 8 LOST 4% 8 That 70's Show 3%

9 Heros 2% 9 Scrubs 2% 9 The Office 2% 9 24 3% 9 America's Top Model 2%

Secret Life Am. Teen 2% 10 The Office 2% 10 CSI 2% 10 Heroes 3% House 2%

Southpark 2% ESPN 2% South Park 2%

Heroes 2%Southpark 2%


Exhibit 104

MEDIA INFLUENCES , MAGAZINES – UPPER - INCOME STUDENT SURVEY The Ellie Goes To…


1 Seventeen 21% 1 Seventeen 17% 1 Seventeen 18% 1 Seventeen 19% 1 Sports Illustrated 17%

2 Sports Illustrated 17% 2 Sports Illustrated 15% 2 Sports Illustrated 14% 2 Sports Illustrated 17% 2 Seventeen 16%

3 People 9% 3 People 10% 3 Cosmopolitan 12% 3 Cosmopolitan 11% 3 Cosmopolitan 14%

4 Cosmopolitan 7% 4 Cosmopolitan 8% 4 People 8% 4 People 8% 4 People 7%

5 ESPN 5% 5 ESPN 6% 5 Vogue 4% 5 Vogue 5% 5 Teen Vogue 4%

6 Playboy 4% 6 Teen Vogue 3% 6 ESPN 4% 6 ESPN 3% 6 ESPN 3%

7 Teen Vogue 3% 7 Game Informer 3% 7 Game Informer 2% 7 PlayBoy 2% 7 Vogue 3%

Game Informer 3% 8 Playboy 2% 8 Teen Vogue 2% 8 Teen Vogue 2% 8 Slam 2%

9 Time 3% 9 Vogue 2% Time 2% 9 Rolling Stone 2% 9 CosmoGirl 1% Vogue 3% 10 Time 2% 10 Playboy 2% 10 Game Informer 2% 10 Time 1%


1 Seventeen 16% 1 Seventeen 15% 1 Seventeen 20% 1 Seventeen 21% 1 Cosmopolitan 13%

2 Sports Illustrated 12% 2 Sports Illustrated 12% 2 Sports Illustrated 15% 2 Cosmopolitan 13% Seventeen 13%

3 Cosmopolitan 8% 3 Cosmopolitan 9% 3 Cosmpolitan 7% 3 Sports Illustrated 9% 3 Sports Illustrated 9%

4 People 6% 4 People 5% 4 ESPN 7% 4 People 5% 4 ESPN 5%

5 Vogue 4% 5 ESPN 3% 5 People 6% 5 Teen Vogue 5% 5 Teen People 4%

6 ESPN 3% 6 Cosmo Girl 3% 6 Teen Vogue 4% 6 Cosmo Girl 4% 6 People 4%

7 Teen Vogue 3% 7 Vogue 3% 7 Vogue 4% 7 Vogue 4% 7 Teen Vogue 4%

8 Cosmo Girl 3% 8 Teen Vogue 2% 8 Cosmo Girl 3% 8 Teen People 3% 8 Vogue 3%

9 Game Informer 2% 9 Game Informer 2% 9 US Weekly 2% 9 ESPN 2% 9 Cosmo Girl 2%

10 US Weekly 2% 10 Time 1% 10 Game Informer 1% 10 Game Informer 1% 10 Time 2%Time 1%



April 2011

the connectivity craze makes peers even more influential in purchase decisions, specifically around product categories that are status related such as clothing, footwear, accessories, and mobile electronics. Informally, we have talked with teens on our trips to schools and we believe teens are starting to become more comfortable with business in this new media.

Exhibit 105

MEDIA INFLUENCES , MUSIC – AVERAGE - INCOME STUDENT SURVEY The Grammy Goes To…

Rank Spring 2011 % Rank Fall 2010 % Rank Spring 2010 % Rank Fall 2009 %

1 Lil Wayne 9% 1 Lil Wayne 9% 1 Young Money 6% 1 Lil' Wayne 6%

2 Eminem 5% 2 Drake 6% 2 Lil' Wayne 6% 2 Taylor Sw if t 2%

3 Wiz Khalifa 4% 3 Eminem 5% 3 Lady Antebellum 2% 3 Linkin Park 2%

4 Drake 4% 4 Trey Songz 3% 4 Taylor Sw ift 3 4 Rascal Flatts 2%

5 Taylor Sw ift 3% 5 Taylor Sw if t 2% 5 Rascal Flatts 1% 5 Young Money 1%

6 Kid Cudi 3% 6 Kid Cudi 1% 6 Black Eyed Peas 1% 6 Day 26 1%

7 Justin Bieber 3% 7 Wiz Khalifa 1% 7 Nickelback 1% 7 Nickelback 1%

8 Trey Songz 2% 8 Young Money 1% 8 Linkin Park 1% 8 All Time Low 1%

9 Nicki Minaj 2% 9 Gucci Mane 1% 9 Kid Cudi 1% 9 Paramore 1%10 Mac MIller 1% 10 Paramore 1% 10 Gucci Mane 1% 10 Drake 1%


1 Lil' Wayne 7% 1 Lil' Wayne 11% 1 LiI Wayne 7% 1 Rascal Flatts 4%

2 Day 26 2% 2 Day 26 2% 2 Cash Money Millionaires 4% 2 Lil' Wanye 3%

3 Taylor Sw ift 2% 3 Rascal Flatts 2% 3 Rascal Flatts 3% 3 Nickelback 3%

4 Nickelback 2% 4 Jonas Brothers 2% 4 Danity Kane 2% 4 Pretty Ricky 2%

5 Rascal Flatts 1% 5 Danity Kane 2% 5 Chris Brow n 2% 5 T.I. (rapper) 2%

6 T.I. 1% 6 T.I. 2% 6 Day 26 1% 6 Kanye West 1%

7 Paramore 1% 7 Talyor Sw if t 1% 7 Taylor Sw ift 1% 7 Red Chili Peppers 1%

8 Jonas Brothers 1% 8 Rap (genre) 1% 8 Linkin Park 1% 8 Fall Out Boy 1%

9 Linkin Park 1% 9 Linkin Park 1% 9 Nickelback 1% 9 Linkin Park 1%10 Beatles 1% 10 Chris Brow n 1% 10 Paramore 1% 10 Paramore 1%


Exhibit 106

MEDIA INFLUENCES , MOVIES – AVERAGE - INCOME STUDENT SURVEY The Oscar Goes To…


1 Inception 3% 1 Inception 5% 1 The Hangover 12% 1 The Hangover 8%

2 The Hangover 2% 2 Avatar 4% 2 Avatar 8% 2 Transformers 5%

3 Due Date 1% 3 The Hangover 9% 3 Blind Side 5% 3 Tw ilight 3%

4 Despicable Me 1% 4 Takers 3% 4 Dear John 3% 4 Step Brothers 3%

5 Avatar 1% 5 The Last Song 2% 5 Alice In Wonderland 3% 5 The Notebook 2%

6 Step Brothers 1% 6 Love & Basketball 2% 6 Tw ilight: New Moon 2% 6 Pineapple Express 1%

7 Just Go With It 1% 7 Eclipse 2% 7 Notebook 2% 7 Taken 1%

8 The Last Song 1% 8 The Other Guys 1% 8 Law Abiding Citizen 2% 8 The Proposal 1%

Battle: Los Angeles 1% 9 The Expendables 1% 9 Transformers 2% 9 District 9 1%10 Never Say Never 1% 10 Transformers 2 1% 10 Love & Basketball 1% 10 Never Back Dow n 1%


1 Tw ilight 9% 1 The Dark Knight 12% 1 Super Bad 6% 1 Superbad 10%

2 Dark Knight 5% 2 The Notebook 3% 2 I Am Legend 5% 2 300 6%

3 Step Brothers 4% 3 Pineapple Express 3% 3 300 4% 3 Knocked Up 4%

4 Pineapple Express 4% 4 Step Brothers 2% 4 The Notebook 3% 4 Transformers 3%

5 Taken 3% 5 Superbad 2% 5 Juno 2% 5 Hallow een 3%

6 Madea Goes to Jail 2% 6 Iron man 2% 6 Step Up 2% 6 The Notebook 3%

7 Role Models 2% 7 Love & Basketball 2% 7 American Gangster 2% 7 Disturbia 2%

8 The Notebook 2% 8 Never Back Dow n 2% 8 Transfomers 2% 8 Rush Hour 2%

9 Friday the 13th 2% 9 Transformers 1% 9 Love & Basketball 1% 9 Pirates of Caribbean 2%10 Love & Basketball 1% 10 Wanted 1% 10 Never Back Dow n 1% 10 Harry Potter 2%



April 2011

Key Highlights: Sources of Influence – Average-Income Student Survey

• Given the ubiquity of the Internet in today’s society and access to content around the globe we do not believe there are significant barriers for media influences in today’s society. While some of the rankings for music, movies and magazines may vary slightly, for the large part they move in lock-step with one another. Therefore, we would direct you to our comments above on the upper-income teen media influences as the same for average-income.

Exhibit 107

MEDIA INFLUENCES , TELEV IS ION – AVERAGE - INCOME STUDENT SURVEY The Emmy Goes To…


1 Jersey Shore 14% 1 Jersey Shore 9% 1 Family Guy 7% 1 Family Guy 8%

2 Pretty Little Liars 8% 2 Family Guy 7% 2 Sportscenter 4% 2 Sportscenter 2%

3 Family Guy 7% 3 Sportscenter 3% 3 Secret Life Am. Teen 3% 3 House 2%

4 SportsCenter 5% 4 That 70s Show 3% 4 The Off ice 3% 4 One Tree Hill 2%

5 Tosh.O 4% 5 Teen Mom 2% 5 ESPN 3% 5 The Off ice 2%

6 The Game 4% 6 The Office 2% 6 16 And Pregnant 2% 6 ESPN 2%

7 That '70s show 4% 7 Pretty Little Liars 2% 7 House 2% 7 The Game 2%

8 Teen Mom 3% 8 House 1% 8 Spongebob 2% 8 NCIS 2%

9 The Off ice 3% 9 South Park 1% 9 SouthPark 2% 9 Gossip Girl 2%

10 Tw o and a Half Men 3% 10 SpongeBob Sq Pants 1% 10 NCIS 2% 10 Scrubs 2%That 70s Show 2%


1 Family Guy 7% 1 Familly Guy 9% 1 Family Guy 9% 1 The Hills 7%

2 Sports Center 4% 2 ESPN 6% 2 Sports Center 5% 2 Family Guy 6%

3 House 4% 3 The Hills 5% 3 The Hills 4% 3 Sportscenter 5%

4 That 70s Show 3% 4 One Tree Hill 3% 4 One Tree Hill 3% 4 Grey's Anatomy 3%

5 One Tree Hill 3% 5 That 70s Show 3% 5 America's Top Model 3% 5 America's Top Model 3%

6 Secret Life Am. Teen 3% 6 House 3% 6 C.S.I. 2% 6 C.S.I. 3%

7 Gossip Girl 2% 7 Gossip Girl 3% 7 Lost 2% 7 That 70s Show 2%

8 C.S.I. 2% 8 C.S.I. 2% 8 Grey's Anatomy 2% 8 South Park 2%

9 The Off ice 2% 9 Spongebob 2% 9 House 2% 9 Fresh Prince Bel Air 2%

10 Spongebob 2% 10 The Office 2% 10 SouthPark 2% 10 106 & Park (BET) 2%Simpsons 2%


Exhibit 108

MEDIA INFLUENCES , MAGAZINES – AVERAGE - INCOME STUDENT SURVEY The Ellie Goes To…


1 Seventeen 14% 1 Seventeen 19% 1 Seventeen 16% 1 Seventeen 16%

2 Sports Illustrated 10% 2 Sports Illustrated 13% 2 Cosmopolitan 11% 2 Sports Illustrated 9%

3 Cosmopolitan 8% 3 People 9% 3 Sports Illustrated 10% 3 People 5%

4 People 8% 4 Cosmopolitan 8% 4 People 6% 4 Cosmopolitan 7%

5 ESPN 3% 5 ESPN 5% 5 ESPN 4% 5 ESPN 3%

6 Game Informer 3% 6 Game Informer 3% 6 JET 2% 6 Teen Vogue 2%

7 Vogue 2% 7 Teen Vogue 3% 7 Teen Voque 2% 7 Vibe 2%

8 Playboy 2% 8 Vogue 2% 8 Vogue 1% 8 Game Informer 1%

9 Teen Vogue 2% 9 Jet 2% 9 Game Informer 1% Vogue 1%10 Time 1% 10 Vibe 1% 10 Playboy 1% 10 JET 1%


1 Seventeen 15% 1 Seventeen 14% 1 Seventeen 15% 1 Seventeen 14%

2 Cosmopolitan 12% 2 Sports Illustrated 11% 2 Sports Illustrated 11% 2 Sports Illustrated 11%

3 Sports Illustrated 10% 3 Cosmopolitan 8% 3 Cosmopolitan 10% 3 Cosmopolitan 7%

4 People 6% 4 People 5% 4 People 6% 4 ESPN 5%

5 ESPN 3% 5 ESPN 4% 5 ESPN 4% 5 Cosmo Girl 5%

6 Teen Vogue 2% 6 Cosmo Girl 3% 6 Cosmo Girl 3% 6 People 4%

7 Vibe 2% 7 Vibe 2% 7 Teen Vogue 3% 7 Teen Vogue 2%

8 Playboy 2% 8 Teen Vogue 2% 8 Vogue 2% 8 JET 2%

9 Game Informer 2% 9 JET 2% 9 Playboy 2% 9 Game Informer 1%10 JET 1% 10 Vogue 2% 10 Game Informer 2% Vogue 1%



April 2011

GIFT CARDS AND WISH LISTS

Key Highlights: Gift Card Redemption Rates – All Students

• Our upper-income student survey indicates 50% of teens use their gift cards within one month of receipt, lower than 54% in Fall and Spring 2010 and slightly below 55% in Fall 2009. Approximately 73% of gift cards are redeemed within three months of receipt and 84% within six months.

• Our average-income student survey indicates these teens are quicker to redeem gift cards as 60% use their gift cards within one month of receipt, a bit lower than the 63% redemption rate in Fall. Approximately 78% of gift cards are redeemed within three months of receipt and 87% within six months.

• Anecdotal conversations with teens during our high school visits reveal that some students were holding back on gift card redemptions in favor of waiting for Spring goods.

Key Highlights: Wish Lists – All Students

• For our upper-income student survey, the car category became the most popular item on teens’ wish lists. Cars does not just include automobiles but accessory items as well; it was the surge in accessory requests that pushed the item into the No. 1 position. Car-related items include repairs, paint, tires, electronics, and gas. The car category had the received 15% of responses, up from 13% in Fall 2010

Gift Card Redemption Rates – All Students

Exhibit 109

AVERAGE T IME TO REDEEM G IFT CARD – BY INCOME

0%

20%

40%

60%

80%

100%

Within One Week

Within One Month

Within Three Months

Within Six Months

Within Nine Months

Average Time To Redeem Gift Card

Upper-Income Average-Income


Wish Lists – All Students


April 2011

• Ever popular gifts of money totaled 14%, an increase from Fall (10%) and Spring 2010 (8%).

• Clothing fell to 11% and the No. 3 rank. We’ve noted that the number of students wishing for clothing has been declining over the past several seasons (since Fall 2009).

• Gift cards remained in the No. 4 position at 9%.

• Shoes improved to the No. 5 (tied) rank (6%) from No. 7 (6%) in the Fall. We note TOMS, Nike, and UGGs as requested brands.

• Cell phones tied with Shoes for No. 5 which is the device’s highest rank in the history of our survey.

• Sporting goods, other and iPod/MP3 player all tied for the No. 8 position at 4%.

• We note the top five wish list items (cars, money, clothing, gift cards, shoes) collectively garnered approximately 56% share of wish list desires. This is below the 63% share in Fall 2009 and 62% share in Spring 2010. Our Fall survey had a 54% top five share.

• In our average-income student survey, car-related items top the teen wish list again at 19% of the total.

• Money is the second highest category at 14%, followed by clothing (12%), computer (8%) and gift cards (6%). All five items reappeared on the top five list, with slight changes to rank. Similar to upper-income student survey, clothing ranked lower this survey cycle, falling from No. 2 to No. 3 despite a small increase in share from 11% to 12%.

• Shoes fell 1ppt to 5% but maintained the No. 7 rank.

Exhibit 110

UPPER- INCOME STUDENT SURVEY – WISH L ISTS , ALL STUDENTS

Spring 2010 Fall 2009 Spring 2009

Rank % Total Rank % Total Rank % Total Rank % Total Rank % Total

1 Car 15% 1 Clothing 14% 1 Clothing 27% 1 Gift Card 17% 1 Clothing 22%

2 Money 14% 2 Car 13% 2 Gift Card 10% 2 Money 14% 2 Gift Card 16%

3 Clothing 11% 3 Money 10% 3 Video Games/Toys 9% 3 Clothing 14% 3 iPod/MP3 Player 11%

4 Gift Card 9% 4 Gift Card 9% 4 Money 8% 4 Car 11% 4 Money 8%

5 Shoes 6% 5 Video Games/Toys 8% 5 Accessories 8% 5 Video Games/Toys 7% Video Games/Toys 8%

Computer 6% 6 Computer 7% 6 iPod/MP3 Player 6% 6 iPod/MP3 Player 6% 6 Accessories 6%

7 Cell Phone 5% 7 Shoes 6% 7 Shoes 5% 7 Accessories 5% 7 Shoes 4%

8 Sporting Goods 4% 8 iPod/MP3 Player 6% 8 Other 5% 8 Shoes 4% 8 Sporting Goods 4%

Other 4% 9 Cell Phone 5% 9 Sporting Goods 4% Sporting Goods 4% 9 Other 4%

iPod/MP3 Player 4% 10 Electronics 5% 10 Cell Phone 3% 10 Other 4% 10 CDs/DVDs 2%

11 Accessories 3% 11 Sporting Goods 5% 11 Personal Care 3% 11 Computer 3% 11 Cell Phone 2%

12 Electronics 2% 12 Other 4% 12 Electronics 3% 12 Cell Phone 2% Personal Care 2%

13 Video Games/Toys 2% 13 Accessories 3% 13 Car 2% 13 Musical Instrument 2% 13 Camera/Digital Camera 2%

Camera/Digital Camera 2% 14 Musical Instrument 2% 14 Computer 2% 14 Camera/Digital Camera 2% 14 Electronics 2%

15 Pet 1% 15 Camera/Digital Camera 1% 15 CDs/DVDs 1% 15 Electronics 1% 15 Car 2%

Fall 2008 Fall 2007 Spring 2007 Fall 2006

Rank % Total Rank % Total Rank % Total Rank % Total Rank % Total

1 Clothing 16% 1 Clothing 22% 1 Gift Card 17% 1 Clothing 30% 1 Clothing 25%

2 Gift Card 14% 2 Gift Card 13% 2 Clothing 17% 2 Gift Card 9% 2 Car 12%

3 Money 13% 3 Video Games/Toys 11% 3 Car 12% 3 iPod/MP3 Player 8% Money 12%

4 Car 9% 4 Accessories 7% 4 Money 11% 4 Accessories 8% 4 Gift Card 6%

5 iPod/MP3 Player 7% 5 iPod/MP3 Player 7% 5 iPod/MP3 Player 8% 5 Money 7% 5 Video Games/Toys 6%

6 Video Games/Toys 5% 6 Sporting Goods 5% 6 Video Games/Toys 7% 6 Video Games/Toys 6% 6 I-Pod/MP3 Player 6%

7 Accessories 5% 7 Shoes 5% 7 Accessories 4% 7 Shoes 5% 7 Sporting Goods 5%

8 Shoes 5% 8 Money 5% 8 Cell Phone 4% 8 Car 4% 8 Accessories 4%

9 Computer 5% 9 Cell Phone 4% 9 Sporting Goods 4% 9 Sporting Goods 3% 9 Computer 3%

10 Sporting Goods 4% 10 Car 3% 10 Computer 3% 10 Personal Care 3% 10 Shoes 3%

11 Cell Phone 4% 11 Personal Care 2% 11 Shoes 3% 11 Electronics 2% 11 CDs/DVDs 3%

12 Camera/Digital Camera 2% 12 Electronics 2% 12 CDs/DVDs 2% 12 Digital Camera 2% 12 Electronics 3%

13 Musical Instrument 2% 13 Other 2% 13 Other 2% 13 Other 2% 13 Cell Phone 3%

14 Other 2% 14 Computer 2% 14 Electronics 1% 14 Furniture/Home Goods 2% 14 Personal Care 2%

15 Electronics 2% 15 CDs/DVDs 2% 15 Camera/Digital Camera 1% 15 Cell Phone 1% 15 Digital Camera 2%

Computer 1%


Spring 2008



April 2011

Exhibit 111

AVERAGE - INCOME STUDENT SURVEY – WISH L IST , ALL STUDENTS

Rank % Total Rank % Total

1 Car 19% 1 Car 17%

2 Money 14% 2 Clothing 11%

3 Clothing 12% 3 Money 11%

4 Computer 8% 4 Gift Card 9%

5 Gift Card 6% 5 Computer 7%

6 Cell Phone 5% 6 Cell Phone 6%

7 Shoes 5% 7 Shoes 6%

8 Video Games/Toys 4% 8 Video Games/Toys 6%

9 iPod/MP3 Player 4% 9 iPod/MP3 Player 6%

10 Other 4% 10 Sporting Goods 4%

11 Sporting Goods 3% 11 Electronics 4%

12 Accessories 3% 12 Other 3%

13 Electronics 3% 13 Accessories 3%

14 Personal Care 1% 14 Camera/Digital Camera 2%

15 Camera/Digital Camera 1% 15 Musical Instrument 1%




April 2011

Important Research Disclosures

Distribution of Ratings/IB ServicesPiper Jaffray

IB Serv./Past 12 Mos.

Rating Count Percent Count Percent

BUY [OW] 309 49.60 73 23.62

HOLD [N] 266 42.70 25 9.40

SELL [UW] 48 7.70 3 6.25

Note: Distribution of Ratings/IB Services shows the number of companies currently in each rating category from which Piper Jaffray and itsaffiliates received compensation for investment banking services within the past 12 months. FINRA rules require disclosure of which ratingsmost closely correspond with "buy," "hold," and "sell" recommendations. Piper Jaffray ratings are not the equivalent of buy, hold or sell, butinstead represent recommended relative weightings. Nevertheless, Overweight corresponds most closely with buy, Neutral with hold andUnderweight with sell. See Stock Rating definitions below.


April 2011

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Important Research Disclosures

Analyst Certification — Jeffrey P. Klinefelter, Sr Research Analyst

Analyst Certification — Neely J.N. Tamminga, Sr Research Analyst

Analyst Certification — Sean P. Naughton, CFA, Sr Research Analyst

Analyst Certification — Adam F. Engebretson, CFA, Research Analyst

Analyst Certification — Jennifer Yung, Research Associate

Analyst Certification — Alex J. Fuhrman, Research Analyst

Analyst Certification — Jonathan N. Berg, Research AnalystThe views expressed in this report accurately reflect my personal views about the subject company and the subject security. In addition, no part of mycompensation was, is, or will be directly or indirectly related to the specific recommendations or views contained in this report.

Affiliate Disclosures: This report has been prepared by Piper Jaffray & Co. and/or its affiliate Piper Jaffray Asia Securities Limited, both of which aresubsidiaries of Piper Jaffray Companies (collectively Piper Jaffray). Piper Jaffray & Co. is regulated by FINRA, NYSE, and the United States Securitiesand Exchange Commission, and its headquarters is located at 800 Nicollet Mall, Minneapolis, MN 55402. Piper Jaffray Asia Securities Limited is alicensed corporation regulated by the Securities and Futures Commission of Hong Kong ("SFC"), entered on the SFC's register, no. ABO154, and isan exchange participant of The Stock Exchange of Hong Kong Limited. Its headquarters is located at Suite 1308, 13/F Two Pacific Place, 88Queensway, Hong Kong. Disclosures in this section and in the Other Important Information section referencing Piper Jaffray include all affiliatedentities unless otherwise specified.

Piper Jaffray research analysts receive compensation that is based, in part, on overall firm revenues, which include investment banking revenues.

Complete disclosure information, price charts and ratings distributions on companies covered by Piper Jaffray Equity Research can be found on thePiper Jaffray website: http://piperjaffray.com/researchdisclosures or by writing to Piper Jaffray, Equity Research Department, 800 Nicollet Mall,Minneapolis, MN 55402

Rating DefinitionsStock Ratings: Piper Jaffray ratings are indicators of expected total return (price appreciation plus dividend) within the next 12 months. Attimes analysts may specify a different investment horizon or may include additional investment time horizons for specific stocks. Stockperformance is measured relative to the group of stocks covered by each analyst. Lists of the stocks covered by each are available atwww.piperjaffray.com/researchdisclosures. Stock ratings and/or stock coverage may be suspended from time to time in the event thatthere is no active analyst opinion or analyst coverage, but the opinion or coverage is expected to resume. Research reports and ratingsshould not be relied upon as individual investment advice. As always, an investor's decision to buy or sell a security must depend onindividual circumstances, including existing holdings, time horizons and risk tolerance. Piper Jaffray sales and trading personnel mayprovide written or oral commentary, trade ideas, or other information about a particular stock to clients or internal trading desks reflectingdifferent opinions than those expressed by the research analyst. In addition, Piper Jaffray technical research products are based on differentmethodologies and may contradict the opinions contained in fundamental research reports.

• Overweight (OW): Anticipated to outperform relative to the median of the group of stocks covered by the analyst.• Neutral (N): Anticipated to perform in line relative to the median of the group of stocks covered by the analyst.• Underweight (UW): Anticipated to underperform relative to the median of the group of stocks covered by the analyst.

An industry outlook represents the analyst's view of the industry represented by the stocks in the analyst's coverage group. A Favorableindustry outlook generally means that the analyst expects the fundamentals and/or valuations of the industry to improve over theinvestment time horizon. A Neutral industry outlook generally means that the analyst does not expect the fundamentals and/or valuationsof the industry to either improve or deteriorate meaningfully from its current state. An Unfavorable industry outlook generally means thatthe analyst expects the fundamentals and/or valuations of the industry to deteriorate meaningfully over the investment time horizon.


April 2011

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Other Important InformationThe material regarding the subject company is based on data obtained from sources we deem to be reliable; it is not guaranteed as to accuracyand does not purport to be complete. This report is solely for informational purposes and is not intended to be used as the primary basis ofinvestment decisions. Piper Jaffray has not assessed the suitability of the subject company for any person. Because of individual clientrequirements, it is not, and it should not be construed as, advice designed to meet the particular investment needs of any investor. This report isnot an offer or the solicitation of an offer to sell or buy any security. Unless otherwise noted, the price of a security mentioned in this report is themarket closing price as of the end of the prior business day. Piper Jaffray does not maintain a predetermined schedule for publication of researchand will not necessarily update this report. Piper Jaffray policy generally prohibits research analysts from sending draft research reports to subjectcompanies; however, it should be presumed that the analyst(s) who authored this report has had discussions with the subject company to ensurefactual accuracy prior to publication, and has had assistance from the company in conducting diligence, including visits to company sites andmeetings with company management and other representatives.

This report is published in accordance with a conflicts management policy, which is available at http://www.piperjaffray.com/researchdisclosures.

Notice to customers: This material is not directed to, or intended for distribution to or use by, any person or entity if Piper Jaffray is prohibited orrestricted by any legislation or regulation in any jurisdiction from making it available to such person or entity. Customers in any of the jurisdictionswhere Piper Jaffray and its affiliates do business who wish to effect a transaction in the securities discussed in this report should contact theirlocal Piper Jaffray representative. Europe: This material is for the use of intended recipients only and only for distribution to professional andinstitutional investors, i.e. persons who are authorised persons or exempted persons within the meaning of the Financial Services and MarketsAct 2000 of the United Kingdom, or persons who have been categorised by Piper Jaffray Ltd. as professional clients under the rules of theFinancial Services Authority. Asia: This report is distributed in Hong Kong by Piper Jaffray Asia Securities Limited, which is regulated by the HongKong SFC. This report is intended only for distribution to professional investors as defined in the Hong Kong Securities and Futures Ordinanceand is for the use of intended recipients only. United States: This report is distributed in the United States by Piper Jaffray & Co., member SIPC,FINRA and NYSE, Inc., which accepts responsibility for its contents. The securities described in this report may not have been registered underthe U.S. Securities Act of 1933 and, in such case, may not be offered or sold in the United States or to U.S. persons unless they have been soregistered, or an exemption from the registration requirements is available.

This report is produced for the use of Piper Jaffray customers and may not be reproduced, re-distributed or passed to any other person orpublished in whole or in part for any purpose without the prior consent of Piper Jaffray & Co. Additional information is available upon request.

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April 2011

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