Youth retailer sales helped by bank of mum and dad

A national youth apparel chain has hit a sweet spot with its Gen Z and Millennial customers spending big thanks to financial support from their parents.

Youth apparel chain Universal Store says the “bank of mum and dad” along with the growing adoption of buy now, pay later services is boosting purchases by its Gen Z and Millennial customers.

The Brisbane-based retailer said sales grew 37.3 per cent on a like-for-like basis in the third quarter, helped by a more than doubling of online purchases.

Universal chief executive Alice Barbery said youth spending was being lifted by robust parental financial support along with the rising adoption of platforms such as Afterpay and Zip Co.

Customers had adjusted their lifestyles during COVID-19, including working or studying from home, engaging in a virtual social life and focusing on comfort.

But they were now resuming more aspects of their social life with easing distancing requirements and activity at bars, parties and other events likely to trigger increased spending on apparel.

Young people aged between 16 and 35 make up a third of Australia’s population.

Universal, which is chaired by former Super Retail chief executive Peter Birtles, has seen its shares climb almost 50 per cent since listing on the ASX in November at an issue price of $3.80 a share. The stock rallied 8.8 per cent to $7.65 on Tuesday after the trading update.

Ms Barbery said other ‘‘tailwinds’ driving youth spending included deferral of traditional life milestones, prioritised spending on personal appearance and casualisation of workplace attire. A significant proportion of its customers’ income was disposable.

Jackson Willie from Universal Store at Chermside in Brisbane. Picture: Steve Pohlner

Universal said in-store sales lifted by 27.5 per cent in the third quarter while online sales rose by 148.2 per cent. The company said sales growth was helped as it was compared against a “softer sales” period in March last year, the beginning of national COVID-19 lockdowns.

But Universal warned it was entering an “uncertain period.” Although all of its stores had reopened by May 2020, foot traffic at CBD and tourist area locations remains depressed.

The company in February announced it would repay the $3m in JobKeeper subsidies it received last year after booking record first-half sales and profitability.