GO
Loading...

Can Instagram save this aging teen retailer?

Some of America's largest teen fashion retailers have been abandoned by young customers and investors alike. Can social media give them a chance of survival?

Very little has gone right for teen fashion retailers in the last few years. Youth unemployment remains elevated, putting sales under pressure and compelling retailers to offer steep discounts. Competition has also heated up, with a group of fashion-forward companies like Forever 21, H&M, and Uniqlo winning market share from brands that were once wildly popular.

Among the worst hit is Aeropostale, which some investors have essentially left for dead, with the stock down 66 percent over the last 12 months as of early May.

Bethany Mota at Aeropostale's Woodfield Mall store in Chicago, Aug. 27, 2013.
Getty Images
Bethany Mota at Aeropostale's Woodfield Mall store in Chicago, Aug. 27, 2013.

But Aeropostale may have an ace in the hole with 18-year-old fashion guru Bethany Mota.

Her new line is critical because Mota has been successful precisely where Aeropostale has fallen short: drawing a large and growing audience that appreciates her fashion advice. While Aeropostale has seen sales and traffic slip, Mota has built an impressive audience, including 5.6 million subscribers to her YouTube channel, 2.5 million Instagram followers, and 1.3 million Twitter followers.

Aeropostale declined to comment earlier this year when asked about Mota's impact, and Mota's agent, Max Stubblefield of United Talent Agency, did not return calls seeking comment.

(Read more: Aeropostale mulls raising capital from private equity: Sources)

Granted, many retail brands already have accumulated millions of followers over the years, especially on Facebook. But those followers don't necessarily translate into sales. Aeropostale itself has increased its count of Facebook followers for the last few years to 10 million.

What's more important is how often followers actually read, watch and interact on social media sites. Consider Mota's Instagram account, where she frequently posts photos of Aeropostale items from her line. The pictures tend to generate at least 300,000 "likes" within a few days—well above 10 percent of Mota's followers.

(Read more: Can Russia take my Pepsi? Consumer brands at risk)

That is a level of engagement that exceeds even Victoria's Secret, a unit of L Brands known for its large social media presence. Victoria's Secret tends to get fewer than 100,000 likes per photo on its Instagram account, which has over 4 million followers.

A presence on Instagram is important because photos posted on the site often get a larger number of "likes" than Twitter posts. "People don't really miss out on things on their Instagram feeds," said Jason Stein, founder of social media agency Laundry Service.

What's more, Instagram has gained in popularity over the last year, with 69.5 million monthly active users in the U.S., now roughly equivalent to Twitter, according to comScore. And the average Instagram user now spends more time on the site than a typical Twitter user, comScore said.

There's reason to believe the candid photos that Mota posts will lead to stronger sales of Aeropostale products. Stein said one of his clients, fashion designer Rachel Roy, generates far more customer purchases from paid advertisements that use Instagram photos compared to typical product photos.

Of course, there is only so much Mota can do for Aeropostale at the moment. Analysts say her line probably accounts for less than 10 percent of the merchandise in Aeropostale stores and some of the merchandise has only been there for a short time.

But it's likely that her popularity has brought much-needed traffic into Aeropostale stores. In a note to clients earlier this year, Buckingham Research Group points out that the quality and the assortment in Aeropostale stores had improved "dramatically" before Mota arrived, but customers simply weren't in the stores to see the products.

—By CNBC's John Jannarone. Follow John on Twitter @jannarone.

Contact Retail

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More*