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Designer Kids Wear a Growing Market

Kids wear is outperforming women's wear, according to Richard Chamberlain, a London-based equity analyst at J.P. Morgan.

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PARIS — Little sizes are turning into big business, with executives confirming that children’s wear, a small yet resilient chunk of the designer world, is experiencing bullish year-on-year growth.

This story first appeared in the December 31, 2008 issue of WWD.  Subscribe Today.

“We continue to have great sell-through and are starting to see [strong] growth in the Web business,” said Tracy Edwards, vice president and divisional merchandise manager at Barneys New York. She cited Phillip Lim Kids, Little Ella Moss, John Galliano and Little Marc Jacobs among leading lines, with downsized versions of designer brands in hot demand.

“Over the last six to 12 months, kids’ wear, as you might expect, is outperforming women’s wear, which is outperforming men’s wear,” stated Richard Chamberlain, a London-based equity analyst at J.P. Morgan.

“Kids’ wear is still king,” echoed ex-Bonpoint designer and artistic director Domitille Brion. Noting the recent mushrooming of trendy kids’ wear brands, Brion, who this spring launched Soeur, a “very Saint-Germain” label targeting 10- to 16-year-olds, sees the fashion-ization of the kids’ wear category as inevitable. “There are a lot fewer kids’ brands than adult brands so there’s space to fill, and there’s a whole mini-me [phenomenon] going on where women want to see their kids as extensions of themselves,” said the designer-cum-consultant, who is due to open a second Soeur store in Paris’ 16th arrondissement.

From the denim to the luxury fields, a range of nontraditional players is among the sector’s new kids on the block. These include Acne, Anne Valérie Hash, Clements Ribeiro and Surface to Air, whose first line, Fangs, a medium-priced range comprising organic T-shirts, sweatshirts and jeans illustrated by Gordon Hull, will hit stores this spring. In November, Jean Paul Gaultier unveiled its first children’s wear license, signed with Groupe Zannier. The debut collection will hit store’s next fall.

Meanwhile, Moschino will break into the children’s wear market via a renewable, five-year license with Altana SpA. The line will target three age groups: Moschino Baby for one month to two years; Moschino Kid for 12 to 18 months to age six, and Moschino Teen for ages six to 14. The collections will launch at retail in July.

Other recent designer additions include Chloé and John Galliano, who released its children’s wear line last fall, licensed to Diesel and distributed in 191 multibrand stores. “We’re aiming to have the line in 700 multibrand stores over the next five years,” said a Galliano spokeswoman, citing the Middle East, Eastern Europe, France and Italy as the strongest markets.

In September, Kenzo appointed Antonio Marras as artistic director of its Kenzo kids’ line, with his first collection due for fall 2009. Lacoste is also redefining its kids’ wear positioning, having tapped Soeur’s Brion to develop a more fashion-forward line with designer Christophe Lemaire, due out this spring. A new limited edition Lacoste kids’ wear line, Heritage, based on revisited archive pieces, will enter the market in the new year, as well.

Elsewhere, French Connection will introduce its high-fashion baby line in the spring, while Pepe Jeans is said to be readying to aggressively amp up its kids’ wear profile.

Underscoring the rise of designer children’s wear, Children Worldwide Fashion, which holds kids’ wear licenses for the likes of Chloé, Missoni, Burberry and Escada, will open its first multibrand store for luxury kids’ wear on Paris’ Avenue Victor Hugo in February, according to a spokesman.

Independently, Burberry is rolling out freestanding children’s wear stores, including units in Hong Kong, greater New York and Palo Alto, Calif., as well as a dedicated children’s wear concession in Harrods. The stores showcase a full range of collections for infants, boys and girls as well as children’s shoes and accessories. Children’s wear store openings and concessions also are planned for Taiwan, South Korea, Kuwait and Dubai. Citing plenty of scope for broadening the offer in “this large, fragmented market,” Burberry chief executive officer Angela Ahrendts said the category represents an important and exciting opportunity for the brand.

“Sales were up over 50 percent in children’s wear over the past financial year, and we are already seeing a very strong response from our customers to our current collections,” she said.

In July, Blumarine opened its first kids’ wear shop-in-shop in Harrods, followed by two Miss Blumarine flagships in Kiev and Odessa, Ukraine. The category made up 25 percent of Blumarine’s business in 2007, according to a spokeswoman, seeing 20 percent annual growth in the past five years.

Sales for D&G’s kids’ wear line, D&G Junior, rose by 30 percent this year, representing 12 percent of total wholesale revenues, according to a spokeswoman. The brand counts 27 monobrand points of sale dedicated solely to its junior line, as well as nine grouping the men’s, women’s and junior lines, she said.

Overall children’s wear sales in the U.S. last year totaled $48.7 billion, according to a report by Mintel, marking a 37 percent climb since 2002, with an average annual sales growth of 5 to 7 percent.

“Should there be a downswing caused by a softening economy, the weakness in children’s clothing should be short lived,” the report stated, highlighting infantwear as the sector’s cash cow, with kids’ wear volume in the U.S. led by midprice chains such as Babies ‘R’ Us, and mass merchandisers like Target and Wal-Mart, which are busy beefing up their offerings. In 2006, for example, Wal-Mart launched its Project Rattle initiative, geared to doubling the size of its infant section in select stores.

Factors fueling demand for luxury kids’ clothing, according to Katrin Magnussen, senior fashion analyst at Mintel, include a plateauing of birth rates, which has led to a spurt in the luxury baby gift market; a rise in the number of mature, career-driven mothers armed with more disposable income, and a fatigue with mass produced, throwaway kids’ fashion. Magnussen pointed to a widening polarization of demand, split between the “trading down brigade” and those preferring quality over quantity.

Watch designer John Isaac said the market’s lackluster offer for the seven-to-12 age group spurred the launch of his new John Isaac, Little line, consisting of handmade, scaled-down versions of his adult timepieces. Features include hand-painted faces, mother-of-pearl dials and carbon-coated bracelets. He also offers a made-to-measure service. “My idea is that I want to educate my kids while they’re young so that by the time they reach the age to invest in a real timepiece they’ll understand what it’s about,” said Isaac.

The luxury kids’ wear trend also is spilling over into other departments. “One of the most interesting things we’ve seen is that it’s now rolling into home furnishings,” noted Barneys’ Edwards, adding that Kartell’s new Lou Lou chair for kids by Philippe Starck is the most successful item of kids’ furniture the store has ever had.

“The emergence of so many new children’s wear brands shows that this market is growing fast,” commented Benedicte Perrot-Lefebvre, communications manager for Bonpoint.

The brand so far has registered double-digit growth this year, with 13 store openings. Spring will see the arrival of a new Bonpoint kids’ beauty line, while a children’s spa is also a possibility for next year. “Luxurious pieces are an important part of our business,” Perrot-Lefebvre added, mentioning a 200 euro, or $280 at current exchange, rabbit vest from Bonpoint’s latest collection that sold out in two weeks.

Vanessa Boz, co-founder of Bubble, a three-year-old New York- and London-based premium kids’ wear trade fair, sees children’s lines as the latest avenue for luxury labels that already have explored all their licensing and branding opportunities. “Little Marc Jacobs came after the perfume, the shoes, the sunglasses, and Chloé seems to have followed the same logic,” observed Boz, adding that the premium children’s wear market is [robust] due to its fledgling status, especially for countries such as the U.S. and the U.K., which until now have not been so focused on the contemporary kids’ market.

Johnny Johansson, co-founder of Acne, which introduced a kids’ line last fall, said the category provides a fun excuse for experimenting. “Designers are constantly having to reinvent — it’s a new challenge, and just to make a shop window for kids is so much fun,” he said, adding that the idea for the line surfaced when flicking through an old photo book of families by Swedish portrait photographer Ismo Hölttö. “I saw something that I’d forgotten — that kids used to wear the same things as their parents.” The fact that many of his team were starting to have children themselves also spurred the line’s creation, he said.

Likewise, Dominique Fersancourt, director of licenses for Celine — which started as a luxury children’s footwear brand in 1945 — hinted that the arrival at the house of Phoebe Philo, herself a mother of two, might lead to the international development of the house’s kids’ wear line, currently licensed only to Japan’s Onward Holdings Co. Ltd.

“We’ll have to wait for the brand to reposition itself first,” said Fersancourt, adding that sales for the existing line, designed in-house, have risen by double digits over the past few years.

Despite the growth, small fashion continues to represent a fraction of the adult fashion and accessories business. Sonia Rykiel’s kids’ wear line, for example, which has shown 15 to 20 percent growth over the past four years, accounts for only 5 percent of the brand’s business.

Still, analysts suggest the market looks set to continue booming, with the number of American children under the age of two set to increase by 5 percent, to 8.2 million, by 2010, according to Mintel. The number of kids ages two to five is expected to increase by 3.7 percent to 15.9 million. By 2020, the number of fertile mothers in the U.S. is expected to accelerate to more than 62.7 million.

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