Children's Sector Enjoys Steady Growth (Marketplace Update)

Evidence from apparel sales suggests that it's a kids' world.

Children's wear sales have exhibited steady growth during the past decade, even as many other apparel categories have struggled to maintain momentum, particularly through economic downturns.

According to marketing information firm The NPD Group, children's wear sales have improved every year since 1998, with the exception of the 2001 holiday season that was depressed because of the 9/11 terrorist attacks. The most recent statistics provided by NPD suggest that children's apparel growth shows no signs of slowing, as overall sales from August 2003 to July 2004 reached $29.1 billion, a 1.7 percent increase from the previous 12 months ($28.6 billion).

NPD information indicates that youth and junior sales account for a higher-than-ever 17 percent of the entire apparel marketplace. The category's performance has outpaced that of the men's wear and women's wear realms, which have declined in sales during recent years. Several factors appear at play as the children's marketplace shows signs of insulation from poor economics not exhibited by the adult segments.

"It's a market that seems to keep expanding," says Khani Adams-Young, design director for Gymboree, a leading children's apparel retailer. "Thinking back 10 years ago, there weren't too many other manufacturers. The Gap was probably our only leading competitor at the time. Things have really changed."

Adams-Young said new children's wear-focused apparel companies are emerging in response to marketplace expansion, in part created by the decision by more women of various ages to have children. "Many are established in their careers and have additional amounts of disposable income to spend," she explains. "You also have children growing out of their clothes, which is less likely to happen in the case of adults. In addition it's simply a natural phenomenon for parents to want to lavish their children."

The budding children's apparel market is consistent with an increasing child-age population. Four million infants are born in the United States each year, and census figures show growth in the number of children ages five to 12.

With demand rising, the kids' wear market is characterized by the arrival of several niche-branded newcomers, comprising a peculiar cross-section of more contemporary, conservative styles and edgier, urban looks bordering on hip-hop, such as the new boys' and girls' lines launched by Ecko Unlimited.

With attention for the children's market potentially at an all-time high, even celebrities including Celine Dion and Madonna are getting into the act, having collaborated on new children's apparel lines. In August, Madonna announced the debut of a girls' clothing line, inspired by her best-selling children's book, The English Roses.

With wholesale prices ranging from $24 to $75, the Madonna-inspired line, featuring embroidered tops, ruffled bellbottoms and layered skirts, is launching at retail stores such as Nordstrom, as well as at specialty boutiques. The English Roses collection is a collaboration between Madonna and Los Angeles-based children's clothing manufacturer Lipstik Inc. "This is a market that's needed an infusion of newness for awhile," says designer Lisa Baretta Lloyd, founder of Lipstik, along with her husband, Steve Lloyd. "Working with someone like Madonna, whose creativity and business acumen reaches so unbelievably far, made this a fun experience. She was very hands on. She and her daughter Lourdes, who had worn Lipstik prior to this, had a lot of input."

The adult fashion influence

With parents and children across economic lines becoming more fashion savvy (especially with discount chains, such as Wal-Mart, offering more choices), children's apparel trends are increasingly influenced by adult fashions, says Gymboree's Adams-Young.

"A lot of apparel retailers have translated what's happened in the women's wear and men's wear markets [into] children's wear," she says. "The apparel still appeals to children, but I believe it's become more tasteful, compared to recent styles."

Reflective of this movement, Adams-Young says that general trends have transformed during the past decade, which has seen a transition from "color-blocked" styles (brighter palettes of red, green, yellow and blue) to more toned-down looks. Gymboree and other retailers have adjusted accordingly, she notes.

Examples of boys' and girls' fashions' spinning off from adult tastes are countless, Adams-Young says, pointing to design trends within Gymboree. Its boys' clothing, for example, is often inspired by men's preference for wool, she explains, although interestingly, that look is achieved with alternate fabrics. "A lot of mothers don't want to put children in wool because it has the connotation of being itchy, and then it has to be dry cleaned," she says. "We get around that by printing our fabrics. We did a herringbone, for example, that is called 'Fox Trot' in our last lineup. When you touch it, it's actually a velveteen, which is much more kid-friendly."

In addition, the demand for shiny rhinestones and sequins in women's fashions is being passed down to the young female market, "which makes sense, especially considering that little girls love shiny things," Adams-Young says.

A recent appeal for fur in women's apparel is also trendy among girls. "We'll only use faux fur, but they love the feeling of it, and it appeals to their need for tactile sensation," says Adams-Young.

Barbara Kennington of the Worth Global Style Network (WGSN), a prominent fashion information service, also noted the trickling influence of adult fashions on children's wear.

In a presentation of children's fashion trends at the MAGIC apparel trade show in late summer, Kennington cited the following children's wear style trends that have infiltrated from the adult market:

Animal graphics on both boys' and girls' prints are among the "newest looks," borrowing from a trend especially popular in women's apparel.

For the back-to-school season, Kennington said knitted ponchos were "among the biggest hits," a reflection of overall retro '70s popularity.

Influenced by the sporting world, sports jerseys and oversized athletic tops remain popular among boys.

Denim styles remain prevalent for both boys and girls, according to Kennington, who noted that for girls, "the newest denim skirts are neat and pleated. They are seen at most of the major retailers. . Pockets on denim are also very prominent."

Along with the 1970s vintage look, '50s retro styles are also emerging in both the girls' and boys' markets. Kennington said the '50s look among girls is readily apparent with the popularity of capri pants.

Garden-themed children's wear, with bright fruit-and-vegetable graphics, are projected to be popular in the next spring/summer season.

This fashion forecast from WGSN was based on trends detected in New York, Paris and London, as well as during recent visits to European fashion shows.

With children's fashions closely resembling their adult counterparts, Lloyd says the challenge is to create clothing that is appreciated by both parent and child alike.

"I always think back to my childhood and think about what I liked to wear, and that provides a lot of inspiration," she says. "We'll get feedback from mothers who say their little girls are so happy with what they wear that they don't want to take it off at night. ...As a designer, that's what you're striving for."

MICHAEL COLE is assistant editor of Apparel and may be reached at [email protected].