Parents Grab Up High-End Duds for The Playpen Set

NEW YORK -- 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," says Colligan, a founder of Ladies Who Launch, an organization that provides resources for female 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 Disney 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 Statistics.

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

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

Disney, known for 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 such as Saks Fifth Avenue.

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

"People are spending more and they want their kids to look good," says 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 Officer Matthew McCauley says 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," says McCauley, whose company also owns the mid-priced Gymboree clothing stores and the Gymboree Play & Music programs. 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," says Colligan, who also has a 2-year-old daughter named Somerset. "I can find a way to clean anything."