Carter's children's apparel outgrowing outlet malls
Few retailers have expanded during the lean years of the recession.
Most that have are known for discount items. Think A.J. Wright, Citi Trends and Dollar General.
But a battle is brewing in the baby and children's clothing category, too, as several brands aggressively expand their footprints.
Atlanta-based Carter’s Inc., whose brands include OshKosh B'gosh, plans to add nearly 100 stores in the next two years. The Children’s Place wants to build on its 38-store expansion last year. The Gymboree Corporation’s new Crazy 8 concept will more than double with 75 to 100 new stores planned this year.
“The baby and kids’ apparel space has some of the best demographics in retail with a baby boom in the last few years as well as parents having kids later in life,” J.P. Morgan analyst Anna A. Andreeva said in a note to clients this week.
With retail centers desperate to fill vacancies, this could mean a lot of new baby and children’s stores at centers in Atlanta and beyond.
Carter’s is a large player in children's apparel, but has relatively few of its own stores. The company has a 12.5 percent share of the $23 billion children's apparel market.
But the majority of the company’s $409 million revenue in the first quarter came from sales at department stores and big box discounters. Sales at Carter’s and OshKosh B’gosh stores rose 12.7 percent to $173.2 million last quarter.
Last year, the company built 28 new stores, bringing the total to 281 Carter’s and 172 OshKosh stores. Plans call for 45 new stores this year and 55 in 2011.
James Petty, Carter’s retail president, told analysts after earnings were released Wednesday that the company wants to move beyond the outlet malls to strip and lifestyle centers. Currently, 173 Carter’s and and 160 OshKosh stores are in outlet malls.
“Our opportunity for growth in more conventional, non-outlet environments is significant,” he said.
Growing its store count by 10 percent a year is a big change for Carter's.
“For Carter’s baby clothes, that’s aggressive,” said Monetha Cobb, a partner at Atlanta-based The Shopping Center Group, a retail brokerage firm. “That’s big for a company that has grown their concept at a third of that rate.”
Carter’s will be competing with The Children’s Place and others for retail space, especially in the southeast, she said.
Leasing agents will see Carter’s as a brand with a reputation for quality and value, she said. But whether centers will sign deals with Carter’s will largely depend on whether a Carter rival is there already, she said.
