Spending it All on the Kids

You may think the term granny grabber refers to an unsavory frequenter of shopping malls. But in the garment industry, it evokes one of the most heartwarming and affirming human interactions: diminutive overalls and dresses that prove so downright adorable that grandparents can't resist buying them as gifts. Thanks in part to the granny-grabber factor, children's clothes have been a consistent bright spot in an otherwise rocky retail environment. "The children's market has bucked the trend," says Marshal Cohen, co-president of the market-research firm NPDFashionworld. "It's the only apparel sector that grew in 2002."

And the trend is continuing. According to NPD, in 2002 sales of children's apparel rose 6%. During the same period, sales of apparel in general fell 1.7%. The teen market, a fickle but vastly rewarding category for retailers who can crack it, was flat. And kids' apparel for newborns through about age 10--grew even as the birthrate slightly but steadily declined.

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Sales of kids' clothing are traditionally less volatile than those of adults' clothing. Children constantly outgrow things, whereas adults can more easily defer clothing purchases, especially in hard times. But this doesn't fully explain today's persistent increase in kids' apparel sales. For that, one has to look at shifts in demographics, marketing and the national mood.

War and terrorism have created a desire among many parents to protect and pamper their children, says Erin Clack, market editor of the trade publication Children's Business. Clack says many parents tell her they want to indulge their children by buying them unique and beautiful things. This trend has been a boon to independent specialty stores like the Kangaroo Pouch in Atlanta. Owner Eloise Morris says customers seem particularly drawn to personalized items, like monogrammed hair bows and bibs.

Morris reports that while clothing for all children's age groups is doing well at the Kangaroo Pouch, layette items are best sellers, a trend that holds up at other retailers. In fact, Clack says apparel for newborns and infants is currently the top performer in the children's category.

Which brings us to demographics. Today the percentage of babies being born to women in their 30s is higher than it has ever been. In 2001 the birthrate for women ages 30 to 34 was 14% higher than it had been in 1990; the birthrate for women ages 35 to 39 was 28% higher. Women have larger salaries in their 30s than in their 20s, the age at which most women had children in years past. Women today are also more likely to be in dual-income marriages, which provide even more disposable income.

Cheryl Kilton, 40, a pharmaceutical sales representative in Omaha, Neb., has a 2-year-old daughter and says many of her friends have also had children later in life. "We have great jobs, own a home and have no debt," says Kilton, who spent $200 on a Christmas dress trimmed in mink with matching fur shoe clips and headband for her daughter, who wore the outfit once before it was tucked away in a cedar chest for safekeeping.

Kilton bought the dress at Pish Posh, a children's boutique in Omaha. Pish Posh owner Angie Bekins opened the store in April of this year after contemplating the idea for 13 years. That she finally did so amid a war and a recession seems to have had few ill effects. Bekins says the store's sales in its first month were "phenomenal," and they have only improved, with June being her "best month ever." T shirts retailing for $20 and dresses for $100 are being snapped up faster than Bekins can reorder them. She says one customer purchased a mink-edged sweater and skirt for $170 and then returned to buy a matching outfit for her younger child.

Needless to say, not every parent can make such acquisitions without cutting back elsewhere. Shopping at a department store in Omaha, Chantalle Galbraith, 30, a part-time medical examiner, points to her 20-month-old son and 5-month-old daughter in a double stroller. "My son has on Tommy [Hilfiger] shoes and a Nautica shirt. My daughter is wearing Polo," she says. Gesturing at her plain blue T shirt, she says, "I got this at Shopko"--a mass-merchandise chain.

Such parental self-sacrifice is no doubt human nature, but it's an instinct that seems more in evidence at the moment than in years past. The vast majority of those currently having children are members of that notorious and notoriously large demographic, Generation X, a cohort that has proved highly susceptible to displays of status. "Having a baby now is like having a country house or an SUV," says NPD's Cohen. Those intent on having the best-dressed child on the playground can swathe their offspring in such luxury labels as Burberry, Donna Karan and Versace, all of which offer clothes for the teething set. Sales of these brands, however, make up a small part of the market. More popular are somewhat lower-priced though still recognizable name brands like Liz Claiborne and Tommy Hilfiger and mid-priced stalwarts Old Navy and Gap. Additionally, stores from Nordstrom to the Limited have developed private children's labels.