August 13, 2006

Parents buy cashmere for infants and toddlers

By Chelsea Emery

NEW YORK (Reuters) - Three-year-old Chloe Colligan picks
out her camp clothes at discount retailer Target, but for other
occasions, she wears the cashmere, velvet, silk and woven
cotton fashions of luxury children's clothing maker Baby CZ.

Her mother, 37-year-old Cleveland entrepreneur Victoria
Colligan, isn't alone in her choice of expensive fabrics and
styling for infants and toddlers. As couples wait longer to
have children and raise smaller families on higher salaries,
they are spending more on their kids. A lot more.

"I don't have the time to search for discounts and
bargains," said Colligan, a founder of Ladies Who Launch, an
organization that provides resources for women business owners.

"I don't have time to search for that one cute thing in a
really ugly store. And you know you're getting quality when you
go to these higher-end places."

As parents grow busier, older and wealthier, companies are
jumping into the fancy baby clothes market.

Media conglomerate Walt Disney Co. is teaming up with a
clothing manufacturer to introduce luxury baby merchandise
featuring its famous cartoon characters. Meanwhile, children's
clothing chain Gymboree Corp. is expanding its high-end
offerings for infants, a population known more for spitting up
than for fancy dress balls.

The market for expensive baby fashions and accessories is
booming, according to Michael Silverstein, vice president of
Boston Consulting Group. He estimates the high-end baby market
at $45 billion, growing at a 10 percent annual rate over the
last decade.

Over the past 30 years, the average family size has dropped
to about 3.2 people, from 3.6 people, while inflation-adjusted
family incomes have risen 50 percent, according to Boston
Consulting's analysis of U.S. census data. And the number of
first-time mothers age 40 and older has tripled in the decade
that ended in 1997, according to the National Center for Health

All these dynamics are helping offset a financial crunch
caused by rising interest rates and fears about job security as
well as the higher energy prices.

"We see a growing population and that bodes well for infant
apparel," said Matt Nitowski, a director for global franchise
management at Disney's consumer products unit. He added that he
saw no direct risks to the luxury segment's growth.


Disney, known for its movies and theme parks, has
contracted with premium infant clothing maker Icky Baby to make
$90 cashmere rompers that are being pitched to high-end
department stores like Saks Inc.

Nordstrom Inc. and Bloomingdale's have already agreed to
carry part of Icky Baby's Disney line, which includes items
like $50 baby towels and $45 side-snap organic cotton T-shirts.

"People are spending more and they want their kids to look
good," said Kate Somerset, president of Icky Products. "We play
into that trend."

Disney spent two years developing the products featuring
Bambi, Pinocchio and Mickey Mouse, among other characters, and
hopes to parlay their global recognition into strong sales.
Winnie the Pooh, which isn't being used in the high-end lines,
already generates more than $6 billion in global annual retail
sales for the company.

Meanwhile, Gymboree is almost tripling the number of its
Janie and Jack stores, which carry $38 hand-embroidered
cardigans and $48 cowboy boots for ages 1 through 5.

"The sales are fantastic," Chief Executive Matthew McCauley
said of the Janie and Jack stores.

Besides the higher incomes of many U.S. residents, tabloids
touting the fashions of celebrities' babies have contributed to
demand for the highest-quality infant apparel.

"People have to have the latest style and the greatest
outfit," said McCauley, whose company also owns the mid-priced
Gymboree clothing stores and the Gymboree Music & Play

He would not provide sales figures, but said there are
enough U.S. families making more than $100,000 annually to
support 15 new Janie and Jack stores a year until they reach
200 from the current base of 70.

But what happens when an 18-month-old spits up on his or
her cashmere sweater?

"It's a little bit of a misconception that something is
uncleanable or unwearable if something happens to it," said
Colligan, who also has a 2-year-old daughter named Somerset. "I
can find a way to clean anything."