Roping in kids' fashions

There's something new in the childrenswear industry, something that has been missing for quite a few seasons: optimism.

After struggling--long with the rest of the apparel business--in 1995, both manufacturers and retailers predict that strong profit numbers in childrenswear will be posted at the end of 1996.

In fact, at some stores childrenswear is currently setting the pace in apparel growth. At Pamida, for example, childrenswear led the company in increased sales and gross margin for the month of August. "It's been a business that we have a really good focus on, a very focused direction," says Eric Flodberg, Pamida's vice president, divisional merchandise manager.
Indeed, childrenswear sales for the first seven months of this year rose at all retail tiers with the exception of department stores. According to The NPD Group, Port Washington, N.Y., total outlet sales jumped from $11.7 billion for January 1995 through July 1995 to $12.4 billion for the same period of this year. During that period, total discount store sales increased from $3.9 billion to $4.2 billion.

The numbers should get even stronger as the year progresses, in large part because of a good, albeit late, Back-to-School season, says John Lupo, the former senior vice president, general merchandising manager for Wal-Mart, who was recently named the chief operating officer of the retailer's international division.

Retailers and manufacturers alike expect strong sales to continue into 1997 for various reasons. "Business is doing very well right now," says Mark Minsky, senior vice president, general merchandising manager for Caldor. "I think business goes in cycles and we're on the up portion of the cycle right now."
Licensing has long been strong in childrenswear, and that trend is expected to continue with the spring lines. Kmart, for example, will begin selling Sesame Street apparel for infants and toddlers and boys and girls in mid-1997. The line will include both separates and coordinates.

Licensing already accounts for 20 percent of the entire mix in the boys' and girls' departments at ShopKo, which carries Warner Bros.' Loony Tunes and Disney characters. "It sells very well on our floors," says Skip Chustz, ShopKo's gmm for apparel. "To our customers, these licenses become brands."
As usual, the entertainment business will fuel license sales through the release of new movies and videos. Winnie the Pooh, Mickey Mouse, Hercules, "Batman and Robin," "101 Dalmatians," "Space Jam," "Jurassic Park: The Lost World" and "The Mighty Ducks" are just a few of the characters and movies from which retailers expect to see strong sales.

Warner Bros. is hoping Lola Bunny--from the movie "Space Jam," set to be released in mid-November--will attract the attention of girls, something that has been difficult to do in the past. "She's the first female bunny, she's pretty and athletic, and an independent '90s bunny who knows how to handle Bugs," says Kay Weiss, vice president of apparel licensing for Warner Brothers. "She's a big key to the girls' business going forward."

In boys' apparel, Goosebumps is expected to still generate good sales.

Professional sports licensed merchandise is just about holding its own, but few retailers plan increases in the area for spring. "It's been so hot for so long that it's just turned down," says Devorkin. "There will always be a professional sports market. It just depends on how big it is."

By focusing on key categories in childrenswear retailers can sway their customers to think of them as headquarters locations. However, if the nuances aren't correct, in terms of color palette or silhouette, for instance, they run the risk of huge markdowns.

But if the strategy of offering more of less is in line with consumer expectations, then spring 1997 may be just the beginning of an upswing that continues throughout the rest of the year.