NEW YORK (Reuters) - Retail executives are taking advantage of the downturn to teach their children the value of money, from using strict guidelines for weekly allowances to showing their kids the meaning of going without.
Speaking at the Reuters Consumer and Retail Summit this week, some retail executives said they were trying to instill in their youngsters an appreciation of earning what they own.
Regina Gray, an executive in the Marketing Services division at Experian PLC (EXPN.L), said that even though her children are under the age of ten, she wants them to think hard about whether they really need the new toys they ask for.
Gray will ask them if they know the cost of the items and whether they already have something similar at home. Her 9-year-old daughter, who earns $3 a week for doing chores, must use her own money for buying nice-to-have things.
“I’ve started to make them think twice,” Gray said. Families she socializes with have their children do chores in exchange for $5 or $10 a week; others give a dollar for every year of age. “I don’t know what the right answer is,” she said.
Collective Brands Inc PSS.N Chief Executive Matthew Rubel said his three kids always want the latest gadgets, whether it is Apple’s (AAPL.O) iPad or Amazon.com’s (AMZN.O) Kindle, but he makes them hold on to their devices for a few years.
“We’re really just trying to make them understand that you can’t just run out to the next new thing all the time,” Rubel said. “They have to earn the money for it on their own. And if they want to go trade it in, they have to monetize the old one.”
Even before the downturn, Matthew Katz, the global retail practice leader for AlixPartners, started giving his children an allowance for doing chores. But they are allowed to spend only one-third of it, as one-third goes into a savings account and the rest goes to a charity of their choice.
“We tried to instill that it’s not about taking out the garbage or putting the dishes away to get X amount of dollars to go to the store and get the next Game Boy,” Katz said.
OfficeMax Inc OMX.N COO Sam Martin took that a step further, bringing his 11-year-old son to Thailand to volunteer at orphanages.
“Before that it was hard for him to see that you can actually entertain yourself without four gaming devices,” said Martin, whose wife runs a nonprofit group that helps orphans and foster children. “Now he doesn’t ask for anything. He has more than he can ever need and he realizes that.”
Executives with older offspring said many are becoming “boomerang kids,” who return home after college to save money.
“Nothing wrong with that, that’s how we all used to do it,” said Farooq Kathwari, chief executive of Ethan Allen Interiors Inc (ETH.N). He said fear over not finding a job is changing their habits.
“Why would you pay that (high rents) to a landlord when you’ve got a home in London that comes with free washing and food?” said Ian Cheshire, CEO of Kingfisher Plc (KGF.L), Europe’s top home improvement retailer. “It’s not the end of the world for parents, but it’s not quite the deal I thought!”
Perry Ellis International Inc PERY.O CEO George Feldenkreis, born in 1930s Havana, Cuba, to Russian immigrants, said his own modest background made him want to teach his kids the value of hard work and perseverance.
“One issue with young people today is they want to get there too fast ... They don’t want to be hired as an assistant to this or that, they want to be assistant to the chairman,” said Feldenkreis, whose son Oscar is the company’s COO.
“What this has brought us is some young people have understood that you have to pay your price, you have to bide your time,” he said.
Janet Hoffman, global managing director for Accenture’s retail practice, thinks there is an awakening among young people due to the recession, but doubts its longevity.
“What I’m not convinced of is that kids really get it,” said Hoffman, who said her parents were children of the Great Depression and developed behaviors that lasted for 60 or 70 years. “Certainly unemployment is high, but there’s a lot more of a cushion than there was during the Depression.”
Iconix Brand Group (ICON.O) Chief Executive Neil Cole learned discipline and hard work by putting in long hours in the shoe business run by his father — which he ultimately turned into Iconix, home of the Candie’s and Joe Boxer brands.
Still, Cole finds it difficult to be as disciplined with his own sons, now in their early 20s.
“A lot of times I speak to colleges and students. I think I’m better ... teaching them than I am with my own children,” said Cole, whose brother founded Kenneth Cole Productions Inc KCP.N.
The teenage daughter of Nina Kampler, executive vice president at Hilco Real Estate, recently learned a lesson after paying $230 at the airport for overweight luggage. Returning home from a year abroad, her suitcase included articles that still had price tags on them and ultimately got thrown away.
“She was aghast and that’s OK,” said Kampler. “We spent $230 to learn a lesson. She’ll have thousands of dollars she’ll be able to save one day because she realizes just buying stupidly isn’t a smart way to live.”
Reporting by Martinne Geller; Editing by Michele Gershberg and Matthew Lewis