OR Winter Market Trends Report: Kids' apparel and gear

The SNEWS® team of six editors spent the entire four days of Outdoor Retailer Winter Market 2004 scouting out the trade show scene. Each week, since the show ended, we've been publishing our take on trends, directions, colors, styles and innovations that caught our eyes. With that in mind, here's our take on children's products, trends and developments.
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The SNEWS® team of six editors spent the entire four days of Outdoor Retailer Winter Market 2004 scouting out the trade show scene. Each week, since the show ended, we've been publishing our take on trends, directions, colors, styles and innovations that caught our eyes. No, each report is not complete and we apologize in advance if a company feels its product was not mentioned when it should have been. We're only covering product that stood out to us, so if you're not mentioned, we either did not see you, we didn't think your product stood out sufficiently, or we were just plain clueless -- you pick one. With that in mind, here's our take on children's products, trends and developments:

While there is little debate that retailers such as The Gap, Old Navy and Banana Republic were once viewed as a nearly insurmountable obstacle in the way of attracting sales dollars from parents outfitting their kids, the tide may be turning.

Combined with high-profile athlete/moms like Lynn Hill, and what appeared to be a record number of babies being wheeled, carried and cooed around Outdoor Retailer Winter Market, the apparent re-energizing of the kids' market certainly grabbed our attention. Indeed, the SNEWS® team was very encouraged by a mountain of new offerings in the kids' category at Winter Market. Montrail, Sierra Designs, Ex Officio and Big Agnes introduced kid-sized gear for the first time this winter. Petzl, Merrell and Fox River added depth to their lines to catch a parent's eye and hopefully youthful loyalty. Marmot, which introduced its successful kids' line a year ago, is promoting kids' apparel as a viable category to retailers to grow their market share with families. SIA had a room dedicated to Project Kids, which featured the best of kids' ski gear, ideas on merchandising to kids, and hints on keeping kids occupied while their parents shop.

Jen Taylor, mom and owner of Mountain Sprouts, has been in the kids' apparel manufacturing business for three years, and her numbers are growing exponentially. Mountain Sprouts revenue doubled last year, and Taylor hopes for triple growth this year. Despite a wave of kids' clothiers hanging up their fleece fedoras as Mountain Sprouts was launching, Taylor viewed the kids' technical market as an overlooked opportunity.

"I saw kids' technical gear as a chance to bring new light and energy to the outdoor market," Taylor said. In her short tenure, Taylor has observed a growing willingness by specialty retailers to bring kid-specific product in. She attributes it to a maturing industry that is, well, reproducing.

"A lot of us career athletes and 30- to 40-something outdoors people who waited to have kids are having families," said Taylor, a former mountain bike racer with two sons.

While more retailers may be looking to bring kids' apparel into their stores, Molehill Mountain Equipment's founder and owner Doug Faude, a 10-year veteran of the outdoor kids' market, sees things with a slightly more cautious eye.

"The kids' market has been killed over the last five years," said Faude, noting the disappearance or downsizing of children's clothiers like Cherry Tree, American Widgeon and Jolly Kids. He links the downturn in the kids' market to national economics and events, like September 11, that had an industry-wide effect. But he feels strongly that brands like Old Navy are competing with the outdoor industry and the industry is losing. The outdoor industry's share of outerwear sales is approximately 10 percent, according to Faude, and the kids' market is about a 10th of that.

"Right now the competition is not within the industry," Faude pointed out.

REI's kids' product manager, Cynde Norr, concurs, citing competition from retailers like Target, Old Navy and Wal-Mart.

"Achieving strong gross margins in kids is more of a challenge than in adult gear and apparel," Norr said. "Competition from outside the industry is more of an issue than ever. Success in this product category depends on offering a unique product assortment that is innovative, offers protection from the elements, is comfortable, fun and provides a meaningful price/value relationship."

Faude said he feels the outdoor industry isn't encouraging family camping as it should be. He observes that while the industry is now busy promoting outdoor activity to "kids," it's focused on teens. Faude believes that a love of the outdoors is developed when kids still look to mom and dad for decision-making -- age 8 and under.

"Why isn't the industry telling parents to take their kids camping at 2, 3 or 4 years old?" he asked. "Perhaps on this point, the outdoor industry should take a ski lesson. Many kids first strap on skis and begin instruction as early as 2 years old."

Despite the challenges of competing with the likes of a mainstream store, there is a profitable market for high-quality technical kids' wear, and retailers like REI have determined which product categories warrant investment from a parent's perspective. Outerwear, rainwear, skiwear and footwear top the list. Norr, Taylor and others confirm that parents who are active in the outdoors want their children to wear product from companies that they know and trust.

"Before Mountain Sprouts, I was driving a 1982 Volvo, but I was dressing my kids in Gore-Tex," recalled Taylor. "There are other parents out there who do the same. When it's a parent's priority to be in the outdoors, they'll do whatever they can to take their kids there too."

"Parents who own Merrell and are familiar with our fit, performance and value want to buy Merrell for their kids. Kids who see their parents wearing Merrell want to have Jungle Mocs just like Mom and Dad," said Sue Harvey-Brown, marketing manager at Merrell. Childrens sales accounted for 11 percent of Merrell's U.S. sales in 2003, up from almost nothing in 1999, and Harvey-Brown says the market is still growing.

As if the obvious needs to be stated, it is evident, like with any other category that the bigger the commitment specialty retailers make to merchandising and selling kids' apparel and gear, the better they do.

"The biggest mistake a retailer can make is to carry only one or two products," said Faude. "It's a really hard sell. But if you demonstrate to families that you are focused on getting all of them outdoors, you are cultivating customers for the future."

"We're not bringing in kids (apparel and gear) in response to customer requests," said Mike Donohue, buyer for The Outdoor Gear Exchange in Burlington, Vt. "It's a way for us to diversify and become a more complete store. And the more selection we bring in, the more we sell."

While Donohue agrees parents are more price-conscious when it comes to kids, he also agrees numbers show that parents are willing to put up the cash for a positive outdoor experience.

Indeed, REI's sales numbers show parents are willing to spend $100 to $150 for a ski/snowboard jacket, $60 to $65 for a waterproof-breathable jacket, and $55 to $60 for a waterproof hiking boot. Hot products in the kids' category include the Marmot Precip jacket ($65), Patagonia performance underwear ($22 to $28), and The North Face Denali jacket ($79). Spring offerings that caught the eye of REI buyers included sun protective swimwear and Ex Officio's Buzz Off insect-repellent apparel.

"It's an investment in the future," Taylor said. "All the studies show that kids who start to enjoy the outdoors with their families at a young age continue." REI sees keeping a complete offering of kids' gear in stock as a long-term proposition.

"We are trying to develop and maintain our future customer base," said Norr. "By providing them with gear and apparel that is unique and special, we'll be able to enhance their outdoor experience and keep them coming back."

Faude agrees. "If you're 13 and haven't been raised in the outdoors, you probably won't start camping. Retailers need to gain a following at the youngest possible age to keep people involved in the outdoors for their entire lives."

Despite all the positive vibes at Winter Market, though, Faude remains skeptical about an apparent surge in the market.

"I'd love to believe that manufacturers are leading a resurgence of retail to kids. When retailers start dedicating floor space for full kids' departments that will be the telling time," he concluded.

Here, then, are a few specific items that turned our head on the Winter Market trade show floor:

>> It's about time an outdoor company considered the needs of pregnant women! Mountain Sprouts' new Zippy Maternity Top grows with the expectant mom thanks to flex-panels on the sides that can be zipped closed for post-natal use. The Zippy Maternity Top is made of water- and wind-resistant and breathable Polartec® WindPro LT fleece. Its new fall 2004 styles for kids include Mud Skippers, a lightweight waterproof/breathable bib and the Puddle Jumper dress for girls in Power-Grid 16-way stretch.

>> Cozee Critters' fleece neck gaiters embroidered with cat, rabbit, sheep or bear faces complete with matching hats and gloves certainly garnered a lot of attention -- if a packed booth at all hours of the show was any indication of success.

>> Bearhands oversized "paws" mittens with a self-stick closure at the palm to allow the hand to out without having to remove the mittens are a boon to moms everywhere. The black non-slip PVC pads resemble an animal's paws and the mittens are lined with Thinsulate. Yeah, we know this screams Grandma-bait, but who cares!

>> Screamer Hats showed kid-sized balaclavas in pinks, reds and blues trimmed with embroidered fish for boys and hearts for girls.

>> Baby rompers from Hatley The Little Blue House, a Canadian company, are made of 100-percent cotton and come in beautiful soft colors of red, blue and sage with a choice of moose, horse, golden retriever, black bear or polar bear patterns. Each romper comes with a matching hat.

>> Molehill, celebrating its 10th anniversary, featured the very trick Softshell Jacket with Outlast lining in sizes from a 4/5 to 14, retailing for $84.99. Molehill continues to offer its core pieces in waterproof/breathable snow gear and its packable line of jackets, pants and buntings.

>> Columbia's popular Convert line for kids is a reflection of the adult line in neutral colors for boys and pinks and maroons for girls. In fact, Columbia's kids' line replicates a lot in its adult line from the GRT gear for rugged trail or travel to its Titanium Alloy sport line geared to aerobic multi-sports.

>> Skin cancer is becoming a huge issue and parents are being urged to protect their children from the harmful rays of the sun. Tuga, exhibiting at Winter Market for the first time, has come to the rescue with a line swimwear and clothing rated UPF 50+, with higher coverage than most. Girl's swimsuits feature knee-length shorts and tops to the hip and boy's styles resemble wet suits with sleeves to the elbow and legs to the knees. Tuga's nylon/Lycra fabrics come in bright colors and patterns with matching hats, shoes and sunglasses.

>> Elena Kusi showed beautiful hand-knit sweaters knitted in the Andes of Peru. The sweaters are produced in a factory she set up in her hometown and village women do the finishing work on the sweaters in their homes. The sweaters retail from $38 to $42 but look much more expensive.

>> When is comes to kids' footwear, Merrell takes the cake with its line of Jungle Mocs and Satellite Mocs for infants and kids in great colors and patterns, with the kid-friendly cord-lock lacing system and mom-friendly non-marking soles.

>> Besides bringing the president of Iceland to the show, 66 North brought kids' Powerstretch and fleece tops, bottoms and booties. While the styles were basic, the workmanship was on the money with flat felled seams and articulated knees in the fleece pants.

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