After more than 160 years of dressing kids, Carter’s has the kind of name recognition that other companies crave. But brand leaders say the key to staying on top of the market is to grow and change alongside the customer.
“One of the things we always are looking to do is find ways through culture to continue to stay relevant and demonstrate that we understand what it means to be a parent,” said Jeff Jenkins, EVP of global marketing at Carter’s Inc.
To that end, the company recently announced its first multi-year celebrity partnership with singer and actress Hilary Duff. In her assigned role as “chief mom officer” for the brand, Duff has collaborated with the design team on a collection that launches in September and includes boho-chic baby and toddler apparel, as well as coordinating looks for moms. A second capsule is in the works for spring ’23.
Jenkins noted the brand was looking for a partner who could speak authentically to the experience of parenting today. “Hilary was No. 1 on our list,” he said. “Every millennial grew up with her as Lizzie McGuire and learned life lessons from her. And now, she’s so open on social media about her life, her kids and the good and the bad experiences. I think she saw this an opportunity to lend her style and parenting expertise to help other moms and dads going through the same things she is.”
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In a statement in May, Duff said, “Motherhood is not easy but it’s incredibly rewarding and through my partnership with Carter’s, I hope to be a source of light and inspiration for others as we navigate our individual parenting journeys.”
While the fall collab collection does not include footwear, partners said it could be added in future seasons. Carter’s has licensing deals with Goldbug for infant shoes and Vida Shoes International for toddler and youth styles.
Lea Anne Robertson, VP of merchandising and business development at Vida, told FN that when Carter’s launches new collabs or subbrands — as it did with the sustainable Little Planet line — it first establishes the apparel aesthetic and then later partners with her team on the look of the footwear.
Robertson noted the Little Planet by Carter’s line is Vida’s top priority for this fall. After introducing the first eco-friendly shoe styles in spring ’22, the company is expanding its Little Planet selection this season. The footwear is made with GOTS organic-certified textiles, recycled webbing and recycled polyester, and outsoles feature 40% recycled rubber.
Robertson noted more sustainable materials are being applied to the core Carter’s and OshKosh shoe collections.
“We’re also really focusing on our youth footwear assortment and making sure that it has details that make sense for youth, because previously we’ve been very toddler focused,” she said, pointing to Carter’s recent move to extend its apparel up to youth size 14.
For fiscal 2021, Carter’s net sales increased 15.3% from the previous year, to total $3.5 billion. It benefited from strong growth in all segments, with its U.S. retail, U.S. wholesale and international segments rising 14%, 13% and 29%, respectively.
And the company again exceeded expectations in the fiscal first quarter of 2022, posting a 5% gain in sales against pre-pandemic levels in Q1 2019.
Chairman and CEO Michael Casey told investors on a call in April that the company predicts its wholesale business will remain strong this year, particularly with its key partners Walmart, Target and Amazon. “These retailers disproportionately benefited from the pandemic. They provide one-stop shopping for the essential core products that families with young children replenish on a frequent basis, including diapers, formula and groceries. Carter’s benefits from those frequent visits,” said Casey.
However, he added, Carter’s department store business has not yet returned to where it was before the pandemic, and the company is continuing to reassess its branded retail portfolio, cutting back on lower-margin stores. After closing over 100 doors in 2021, Carter’s plans to open 30 stores and close 20 in 2022, as part of its overall goal to open more than 100 locations in the U.S. in the next five years (net of closures).
In a note to investors last month, analyst Steven Marotta of CL King & Associates predicted that Carter’s will continue to see solid gains, despite the ongoing supply chain issues and price inflation. “[Babies] and children quickly outgrow their apparel, creating built-in replacement demand and rendering the category as the least ‘discretionary’ in the consumer discretionary space,” he wrote.
