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Welcome to All that's rue! Stay up-to-the-minute on all things rue21 with giveaways, the buzz, styling, fashion trends, and so much more.Abercrombie & Fitch, the retailer for teens best known for its surf-inspired togs peddled by shirtless young men with six-pack abs, is in trouble again. On Wednesday, the US supreme court will hear a case brought by the Equal Employment Opportunity Commission over the retailer’s decision not to hire a 17-year-old Muslim girl who wore a headscarf to her job interview. Abercrombie & Fitch has been sued several times before for violating federal anti-employment discrimination guidelines. Its employee dress code – which previously prohibited headwear, but has allowed for hijabs since 2013 – is likely the least of its problems. The retailer, along with a host of other clothing companies catering to the coveted under-25 set, is struggling to survive. A seismic shift can be witnessed at malls across the country. On a typical Friday afternoon in Greenville, South Carolina, for example, gaggles of teenage girls pick through piles of $7 T-shirts at Forever 21 and $15 jeans at Charlotte Russe.

At department store Belk, the Free People shop-in-shop is similarly populated, despite its higher prices, suggesting that the boho aesthetic is resonating with those too young to have worn bell bottoms and floppy hats during those trends’ first (1970s) and second (early 2000s) waves. But once-popular Aeropostale, American Eagle and Hollister stores remain noticeably quiet. The balance sheets at these retailers’ headquarters – and the companies’ Wall Street stock tickers – mirror what’s happening at the mall. Fast-fashion chain Wet Seal recently filed for Chapter 11 bankruptcy protection, after Jacksonville, Florida-based chain Body Central announced it is closing every one of its 265 stores. Two other teen retailers, Delia’s and Deb Shops, both entered bankruptcy in December. And stock in Aeropostale, which sailed through the recession on the strength of its low-priced basics, has been relegated to the bargain bin at below $3 per share. The company planned to close 75 stores in the fourth quarter of 2014 and is considering shuttering more this year.

Why are these brands’ sales unraveling? Kristin Bentz, a consumer retail analyst who has studied Abercrombie & Fitch closely over the past decade, believes its formulaic look, once a source of its success, may have led to its decline in popularity. In the aftermath of the popular Twilight series of books and films, “pale skinny hipsters, and not beefcake dudes”, were dominating pop culture and influencing how teens and tweens wanted to look, she said. Branding and logos also became less important, she added. Emily Evans, a 19-year-old student at the University of Arizona and a previously frequent shopper at Wet Seal, Hollister and Aeropostale, said she became frustrated with clothing cluttered with branding. “Wearing clothes made by a company that advertises their brand on all of their clothes and charges so much for it seems a bit obnoxious to me now,” she said, adding she also grew bored with the many teen retailers’ similar “beachy” styles.

Bentz agrees about the similarity, saying she could walk through any of those stores and not know what year it was from the clothing. “It is so insulting to the teen consumers,” she said. When it comes to American Apparel, Aeropostale, and American Eagle, she added, “How many ways can you slice and dice a hoodie?” In other words, many brands have lost touch with changing trends: “Ironically, publicly held companies aren’t close to the consumer,” Bentz said. Even though parents often pay for the clothes, children are often calling the shots. Tweens and teens influence over $200bn in annual spending, and 85% have an impact on where their parents will – and won’t – shop for clothes, according to recent data from consumer research firm GfK MRI. “It is very much parents’ dollars that are behind these purchases,” said Derek White, president and CEO of Refuel Agency, a marketing firm that specializes in connecting brands with the college market.

“But it is a much smaller percentage of parents that are making the decisions.” Some teens say they’re also weighing social impact into their decisions. Evans, for example, now opts for high-quality clothing that doesn’t shout its brand origins, as well as recycled and sustainable clothing that supports charities. Molly Henderson, 17, said she decided not to shop at Abercrombie & Fitch and Hollister after reading about their propensity to hire only slim and attractive sales staff. “They even hang up to a size three out and put the larger sizes on the shelves,” Molly said. Although she would fit the sizes on the hangers, “that doesn’t mean I want to shop at a place that treats other people badly”, she added. Reports last year from Nielson, Harris Interactive and the Boston Consulting Group, among others, found that millennials are more likely to consider sustainability and social responsibility in their buying decisions than previous generations. Another trend is reducing spending on apparel, and it’s neither hipster nor bohemian, White said.

Teens and their parents are spending a lot more on electronics and “fast casual” restaurants, a step up from burger chains and pizza joints. Those expenses are taking a bite out of clothing budgets and making young adults – and their parents – even more careful about apparel choices. Data from Refuel indicates that technology and mobile devices comprise $29bn in college students’ discretionary spending, beating out the $19bn spent on clothing. “We’ve seen the composition of spending shifting away from clothing,” White said. Millennials who’ve experienced economic uncertainty in the wake of 9/11 and the recession are savvier shoppers, Bentz said. The GfK MRI survey found that 68% typically read online reviews before purchasing a product. As online comparison shopping grows, the influence of social media is also increasing among teens. GfK MRI found that more than half of young adults (51%) connect with brands via social networks. Henderson, for example, said she follows Urban Outfitters, Free People and Brandy Melville on Instagram.

The retailers that are winning the loyalties of teen shoppers are those that are successfully using content and social channels, said Jed Wexler, CEO of New York content-strategy agency 818 Agency. “Free People is actually one of my favorite content marketers right now,” he said, adding that the brand does a great job of using editorial content and “a clear visual voice” to create a seamless path from brand awareness to purchase. Successful retailers format their content properly for each different social media/distribution channel, Wexler added. On Instagram, for example, Free People uses on-brand imagery and encourages followers to upload photos of themselves wearing the clothing, some of which it highlights on its website. To further the chances that scrolling through its feed will lead to a sale, Free People uses Like2Buy, a platform created by Curalate that makes Instagram feeds shoppable, Wexler said. “A retailer’s goal should be to develop long-term relationships with their customers across all of their distribution channels,” Wexler said.

“Free People does that.” Authenticity is key to reaching teenagers, Wexler said. “Millennials and teens (and most people) obviously don’t respond well to the hard sell,” he said. On Free People’s blog, for example, the calls to action are “natural, organic,” he said, and don’t require users to provide anything except their email addresses. Perhaps Free People’s parent company, Urban Outfitters, could learn a thing or two from Free People’s success. Urban Outfitters has taken a hit to its balance sheet, partly because of the poor design choices in its namesake stores. Recent social-media firestorms have erupted over shirts with controversial graphics that ranged from “depression” and “eat less” to what appeared to be a blood-soaked Kent State University sweatshirt. Sales at Urban Outfitters stores open for at least one year dropped 7% during the third quarter, year over year, after a 10% fall in the prior quarter. Free People’s results provide a sharp contrast: the brand has consistently logged sales increases at stores open at least a year.