ZUTOPIA TAPS TWEENS

Byline: Melanie Kletter

NEW YORK — The tween retail scene is heating up.
The Gymboree Corp., the publicly held children’s retailer, is transforming its Zutopia retail chain into a concept aimed at girls aged 7 to 14 — which includes the highly targeted tween segment and the demographic of the moment.
The company’s first Zutopia unit opened in 1999, but until now, the stores have carried both girls and boys apparel.
“We found it was hard to serve the sensibilities of two different genders,” Carole Whitacre, vice president of Zutopia stores, said in a phone interview. “Also, we had so many requests to offer our point of view in other categories, and our stores are small so we can’t carry everything.”
There are currently 19 Zutopia stores, primarily located in the Midwest and on the West Coast, in places such as Chicago, Los Angeles, San Francisco and Denver, although there are also units in Dallas and Atlanta.
While Whitacre declined to give specific store projections, and the company doesn’t specifically break out sales of Zutopia, Whitacre said her company feels there is “a lot of opportunity” for the concept.
“This is such a large market, and our fan club includes parents as much as kids,” she said.
In addition to a wide range of apparel, the company offers beauty and home items, as well as accessories, sleepwear and gifts. Retail prices range from $9.50 for T-shirts to the average price per item of about $15.
The firm is vertically integrated and all of the apparel it offers is sold under the Zutopia label. Each of the Zutopia stores also feature a “Zu Lounge,” created as a play area for customers, which include activities like Nintendo play stations and tween magazines.
The Zutopia concept is going head to head with Limited Too, which is the clear market leader for this sector and operates stores targeting girls and tween shoppers in nearly 400 in malls across the country.
While department stores are stepping up their efforts to snare this fast-growing segment, only a few specialty stores aside from Limited Too have catered to the tween population, which is defined demographically as 10- to 12-year-olds, but generally ranges from seven to 14. As this segment gains more attention, it is likely other players will emerge, as many branded vendors have started to offer fashionable clothing aimed at girls in that age range, including Steve Madden, Self Esteem, One Clothing, Guess and Esprit.
Gymboree, Zutopia’s parent company, was founded in 1976 as an interactive parent-child play program, and its first clothing store opened in 1986. Now, the firm operates 605 stores, including Zutopia and some stores in Canada and Europe, as well as an online store at gymboree.com.
While the firm expanded rapidly in the late Eighties and early Nineties, it has recently begun to show some growing pains.
The Burlingame, Calif.-based firm, which went public in 1993, posted a loss of $10.6 million, as sales fell 4.4 percent to $437.1 million, in the year ended Jan. 29. The company’s stock has also taken a beating in the last year, but has recently started to show signs of recovery.

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