Who said there was anything wrong with this situation?
You think you can't turn it around and benefit from it? How wrong you are.
Laugh, joke, play around, be laid back. Don't be a threat to them, but be of high value. Be confident, but be fun.
Take what he said and turn it into something light hearted and funny. Let them know that you are not into conflict, but will stand up for yourself it things go too far. But you let them know through body language and subtly, not by verbalizing it.
Yes, Bas Rutten's Lethal Street Fighting are great, but these days with "Gangs" and such, you are probably best off not to do anything, even if you can take the whole lot of them. Even Bas Rutten advises that you get out of the area after a conflict, even if you do kick their asses.
And yes, Growth Hormones do work. But to simply avoid situations like these isn't worth it.