It’s Like, You Know

Chasing the latest teen-fashion trend is no easy task for Carrollton-based Gadzooks. In fact, it’s beyond words.

June 1999By Comments

He comes striding out of his office in a golf shirt, blue jeans, and a pair of oversized black sneakers that look, well, ridiculous on a man his age. “Hey, these shoes could very well be the next hot thing,” says an excited Jerry Szczepanski, the fifty-year-old chief executive officer of teen-fashion retailer Gadzooks. He’s not kidding. Szczepanski (pronounced “Sah-pan-ski”) holds up the bottom of one of his shoes, pointing out the concave plastic plate screwed into the arch. “What you’re seeing is the very first cross between a tennis shoe and a skateboard,” he says. “The hard-core skate kids are using them to slide along handrails and curbs. And if these shoes catch on with other teenage boys, we’ll be one of the only stores in America’s malls to have them.”

Skateboard tennis shoes? Is this what America’s fashion-conscious teenager really wants? If you doubt it, you should see what Szczepanski and his staff of buyers believe will be one of the hottest outfits this fall for teenage girls. “Hippie clothes,” he says, showing me an array of ripped bell-bottom jeans decorated with feathers and colorful pocket patches, beaded chiffon shirts, and beaded Indian belts. “For girls who don’t exactly know what ‘hippie’ means,” explains Lisa Anderson, one of Gadzooks’ buyers, “we’re going to call it ‘the old Cher look.’”

Welcome to the wacky world of teen fashion, a business that consists of adults trying to cater to the absolutely unpredictable whims of the teenage brain. Do it well, as Gadzooks has discovered, and you can make a lot of money. Do it poorly, as Gadzooks has also discovered, and you can take a serious hit. How so? The answer is in the numbers. There are now 31 million teenagers in the U.S., more than at any time in history. Unlike their Generation X counterparts, who were renowned for their slacker aesthetic and grunge sensibility, Generation Y teens love trendiness, and they’re willing to pay for it. According to one consumer-research organization, today’s teens have an average of $94 a week to spend. This year they’re expected to plunk down about $141 billion, much of it on fashion.

No wonder, then, that if you walk into any upscale suburban mall, you’ll find half a dozen stores catering to teen fashion tastes, from such large mainstream retailers as the Gap and Abercrombie and Fitch to smaller specialty shops like Wet Seal, Pacific Sunwear, and Gadzooks, which has 316 stores nationwide (70 of them are in 28 Texas cities, from Abilene to Wichita Falls) and logs more than $200 million a year in sales. Since its founding in 1983, Gadzooks has gained a national reputation for finding the kind of cutting-edge clothing, shoes, and accessories that teens love. At the company’s expansive headquarters in the North Dallas suburb of Carrollton, chic young staffers, mostly in their late twenties and early thirties, bustle about, often stopping in the hallways to debate the merits of black nail polish, henna tattoos, tank tops, and bell-bottoms. “Needless to say, it’s an unusual business,” says Szczepanski. “If you miss a trend, the kids won’t show up at your stores, and your profits will drop. And if you stick with a trend for too long, the kids will think you’re out of style.”

If there’s anyone you might imagine to be utterly clueless about teen trends, it would be Szczepanski, a congenial, golf-loving Wisconsin native who was in the computer business until the early eighties, when he moved to Waco to work at a chain of T-shirt stores operated by the family of his then-wife. In 1983 he and his brother-in-law, Larry Titus, raised money from investors to buy the U.S. rights to sell T-shirts and hats for a Rolling Stones tour. Unfortunately, the Stones canceled the tour, leaving Szczepanski and his partners in debt. Desperate to make money, Szczepanski began thinking about his teenage son Jake, who loved to shop but couldn’t find a store he liked. A light bulb went off, and he and Titus leased space at the Town East Mall in the East Dallas suburb of Mesquite, where they opened the first Gadzooks. Why that name as opposed to another? “I wanted to call it Moondog Matinee,” Szczepanski says, “but it cost more to make that sign than to make a Gadzooks sign, which had fewer letters.” Acting as his own interior designer, he put in neon lighting to attract young people, and because he didn’t have much money to buy things to sell, he filled up floor space by sticking an old, white Volks- wagen bug in the store. On one wall he displayed T-shirts that only teens could love (one of the most outrageous now hanging in Gadzooks stores reads “Multiple Orgasm Donor”). From the ceiling he hung a television and a VCR and played a tape of music videos recorded by his son Toby off of MTV the night before. “As soon as the tape was finished,” Szczepanski says, “I’d climb up there and rewind it and play it again.”

The first day it was open, the store grossed $453. “I got physically sick,” says Szczepanski. “We were expecting to do two thousand dollars.” For the next two years he and Titus scraped by. Then they found a little-known line of Hawaiian shorts called Jams. “Like everything else we were buying, we had no idea what these things would do,” Szczepanski says. “We just stuck them on the floor, still in the box. Within a few hours the more fashion-oriented kids, the ones who liked to take chances, were buying them. We had no idea why. Then other kids started coming into the store looking for them.” Szczepanski had learned the first secret of selling to teens: If you can get the kids he calls the “fashion innovators” into your store, the rest of the kids, the “conformists,” will soon follow.

By 1992 Gadzooks had expanded to 33 locations around Texas, including Midland and Waco. Although he had no sense of fashion for himself—to this day he arrives at the office dressed in what one Gadzooks buyer calls “gross old shorts”—Szczepanski had become extremely adept at identifying teen trends. Much of the credit, he says, goes to Jake. “He had gone to college,” Szczepanski recalls, “and he kept calling me and saying, ‘Dad, try this and try that.’” Among the items on which Jake was ahead of everyone else: Ocean Pacific shorts and Parachute Pants, which Gadzooks had in stock just as the wave hit. Not everything turned out so well, of course. “We’ve had our share of miscalculations,” Szczepanski admits with a chuckle. Convinced in the late eighties that kids were still crazy about Michael Jackson, he bought expensive zipper-covered jackets similar to what the Gloved One wore on the cover of his Bad album. Szczepanski initially priced them at $399. Eventually, he had to unload them on the sale table for $4.99.

That flop was a rarity, however, and by the mid-nineties Gadzooks had more than 120 stores and was hugely profitable, in large part because it was an established presence in malls across America at the precise time the nation’s teenage population exploded. In 1995 the company went public, and within three months its share price more than quadrupled, from $14 to $61. Szczepanski and Titus quickly became wealthy men (Titus, in fact, moved to Costa Rica), which allowed them to pay back their investors in the failed Rolling Stones venture. But Szczepanski didn’t rest on his success: To keep ahead of the competition, he and the company’s board of directors decided on a massive expansion to more than double the number of stores nationwide.

Last year, however, Gadzooks stumbled badly for the first time, as its stock dropped into the single digits after the company announced profits of only $383,000. The problem, it turned out, was that Gadzooks’ buyers weren’t able to read the tea leaves quickly enough. “We put the wrong stuff in the stores,” Szczepanski says. For instance, they stuck too long with the wide, baggy JNKO jeans that had been popular in late 1996 and in 1997. And they didn’t put in the right stuff, deciding against stocking some popular brand-name lines that were being talked about everywhere, including Doc Martens, which they thought had worn out their welcome with the fashion innovators. “Let’s face it: We screwed up,” says Szczepanski, whose candor is rather refreshing for a CEO. “We tried to go for edgier clothes than the kids wanted. It was too nightclubby and sometimes too sexy for the girls.”

This year, more brand names are back, and Gadzooks is pushing several lines of tighter jeans—most of them made by MUDD, XOXO, and L.E.I.—with narrower bell-bottoms. But that doesn’t mean Szczepanski and his crew have stopped taking risks. Besides the skateboard tennis shoes and the hippie clothes, they’re pushing a “millennium look” for girls as part of their back-to-school collection. The slinky dresses and tight-fitting pants are made of shades of metallic gray and black, and they’re decorated with stars and planets.

When asked what he’ll do if teens ignore the millennium look, Szczepanski shrugs. “We’ll try something new for next season,” he says. “That’s the joy of our business. Every year there’s a whole new group of teenagers coming around who want to find a new trend. And we’ll be there for them.”

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