PORT WASHINGTON, NEW YORK, August 14, 2002 - Information technology, consumer electronics, apparel and skin-care will be popular product categories this back-to-school buying season according to leading market information provider, The NPD Group, Inc. As back-to-school is a significant shopping season for retailers, it is also a predictor for the upcoming Holiday buying period. To predict this year's top sellers, NPD looked at last year's third-quarter results and current market trends.

Information Technology

Personal Digital Assistants (PDAs), notebook PCs, scientific calculators and educational software are shaping up to be popular sellers for the 2002 back-to-school season.

PDA sales should be strong this back-to-school season as aggressive pricing in the under $200 black and white screen market will make this class of product more affordable (and functional) for back-to-schoolers. "Combined with growth at the entry-level, a whole new range of products sporting color screens and starting at under $300 should make PDAs hot sellers for students of all ages," said Stephen Baker, director of IT research, NPDTechworld.

PDA unit sales for the third quarter of 2001 increased more than 15 percent and dollar sales increased by 4 percent, when compared to the same period in 2000.

For back-to-school 2002, notebook PCs should be popular. "Notebooks (notebook PCs) are always a big thing for college students since they provide full PC functionality in the small form factor necessary for space constrained areas," said Baker. "Especially interesting this year is the trend toward bigger notebooks that pack a lot of power by using a desktop processor. Notebook makers have discovered a niche market of customers who have limited space, high demands for power and features and limited mobility needs," he added.

Last year was a challenging one for the PC industry. Third-quarter 2001 unit sales of desktop PCs fell 37 percent, while dollar sales fell almost 40 percent compared to the same time period in 2000. However, notebook computers increased three percent in unit sales and dropped six percent in dollar sales during third-quarter 2001 versus the same period in 2000.

Strong growth is seen in graphing calculators this season. "Graphing or scientific calculators are now turning into mini-computers that offer computer connectivity and software and data download capability to allow students to get a full understanding of their math homework," added Baker.

Scientific calculators grew almost 28 percent in unit volume and almost 26 percent in dollar volume during the third quarter of 2001 when compared to the same period in 2000.

While unit sales of educational software fell 16 percent during third-quarter 2001 compared to the year prior, demand for typing and foreign language titles remained healthy. First-half 2002 (Jan.- June) showed foreign language software titles to be up more than 11 percent in unit volume compared to first-half 2001. "Expect this trend to persist during this year's back-to-school season, with higher demand for educational titles aimed at children under six years of age," said Steve Koenig, senior software analyst, NPDTechworld.

Consumer Electronics

MP3 players and digital cameras are popular consumer electronics categories for students. "Digital music players like MP3 are allowing high school and college kids to create their own play lists. It can be songs from Bruce Springsteen's 'The Rising' or The Beatles and in any sequence they want," said Tom Edwards, senior market analyst, NPDTechworld.

Third-quarter 2001 showed impressive growth in these categories from the prior year. Sales of MP3 players grew nearly 26 percent in units and almost 25 percent in dollar sales during the third quarter of 2001 versus the same period in 2000.

Digital cameras should continue to be popular with college students this back-to-school season. During the third quarter of 2001, digital cameras grew 42 percent in unit volume and 17 percent in dollar sales versus the same period in 2000. "Cameras are the memory-makers of new friends and experiences. Digital cameras allow electronic and printed pass-around picture sharing of these memories," added Edwards.

Apparel

"This year's back-to-school sales will be an important indicator of how well the apparel industry will do for the rest of the year. Based on sales of kids clothing January through May, we expect to see three to four percent growth in clothing sales this back-to-school season compared to last year," said Marshal Cohen, co-president of NPDFashionworld. "Retailers will be conscious of maintaining or beating last year's revenue sales, even at the expense of profits. So, if sales are sluggish, as they were reported for July, then we may see promotions begin very early on."

This year, jeans will continue to be the hot apparel item sought after for back-to-school. "Kids will be asking for the latest low-rise jeans for girls and the baggiest jeans for boys," added Cohen. Also expected to do well this back-to-school season are khakis, underwear, athletic footwear and girls' fashion footwear.

The vast majority of apparel sales for back-to-school season last year came from the purchase of t-shirts, jeans and necessities such as underwear and socks. In third-quarter 2001, parents bought 135 million t-shirts, over 50 million pairs of jeans, almost 155 million pairs of underwear and panties, and almost 250 million pairs of socks for the segment of children 5-12 years of age.

Beauty

Back-to-school for the beauty industry means back-to-basics for skincare products. Items such as oil/shine control products, body cleansers and moisturizers grew 11,16 and 28 percent respectively during third-quarter 2001 compared to the same period in 2000. These products have been growing both in sales and share over the past five years during the back-to-school time periods and continue to be popular items with teens and college students.

Back-to-school 2001 was also a big year for the makeup category, especially when it came to lip-gloss. Lip-gloss sales grew 38 percent in dollar volume during the third quarter of 2001 versus the same quarter in 2000. Strong growth in lip-gloss continues for the first half of 2002 with dollar sales increasing 27 percent.

"This back-to-school season, tweens and teens will be attracted to the new fall lineups in makeup, especially in eye shadow, eye liner, lip color and lip-gloss. As for fragrance, we anticipate many new fall fragrance launches to be popular this season, including Jennifer Lopez's first fragrance 'Glow', Tommy Hilfiger's 'Tommy T Girl', Hugo Boss' 'Boss in Motion', Calvin Klein's 'Crave' and Ralph Lauren's 'Polo Blue,'" said Timra Carlson, vice-president, NPD BeautyTrends.

About The NPD Group, Inc.

The NPD Group, Inc. (NPD) is a global market information company that measures product movement and consumer behavior across a broad range of industries -- apparel, automotive products, consumer electronics, cosmetics and fragrances, food, foodservice, footwear, housewares, information technology, interactive entertainment, toys and music. NPD's clients, many in the Fortune 500, use this insight to uncover market opportunities, strengthen channel relationships and benchmark industry performance. Since 1967, NPD has introduced numerous industry firsts, most recently combining and calibrating information from consumer panels and point-of-sale tracking via its flagship services, the NPD Worlds. The firm has offices and affiliations in 60 countries.

For more information and commentary, please contact Dora Radwick at 516-625-6190 or dora_radwick@npd.com or Sean P. Dolan at 516-625-2288, e-mail sean_dolan@npd.com.