The baby product industry has been in a flux the last few years, with many brands declaring bankruptcy and seemingly closing up shop. However, there has been a rebirth of sorts of these baby-oriented retailers. Consumers who are starting new families prefer to visually see, touch and determine for themselves which highly rated baby gear would work best for their particular needs — whether it’s clothing, car seats, cribs, high chairs, changing stations or strollers.
Most of these baby product retailers are geared toward the soon-to-be new parents who are setting up their own baby registries, in addition to catering to customers shopping for baby gift items for baby showers or birthdays. Expect these new baby-oriented stores to ramp up their experiential features in order to heighten the whole shopping and registry-creating experience. Look for Carter’s and buybuy BABY to both be especially bullish with store growth. Babylist will be carefully monitoring the pros and cons of its first brick-and-mortar store that premiered last summer, and Babies “R” Us, which also premiered its first store last summer after its acquisition by WHP Global, will be determining possible standalone expansion options after rolling out its store-in-store concept later this year.
Carter’s expects to open between 45 and 55 new stores per year over the next three years. The baby and toddler clothing retailer had postponed its growth plans over the last few years, and even closed 200 of its underperforming stores. Now Carter’s is revved up and ready to expand once again, with growth taking place in markets where the brand already has a presence but still has room to multiply, especially in or near major cities that have seen a population boom recently. Outlying regions in the Northeast, such as Vermont and Maine, as well as other underpenetrated states for the brand, including the Dakotas, West Virginia, Ohio, Idaho, Alabama, Oklahoma, New Mexico and Arkansas, are all expected to be eyed for continuous growth.
The ideal sites for Carter’s are inline units between 4,000 and 5,000 s.f., in high-traffic retail strip centers or open-air neighborhood centers that have easy ingress and egress. Because Carter’s plans to boost its same-day BOPIS capabilities, the retailer prefers locations off busy retail corridors in thriving, densely populated suburban communities within major metros, especially with a large number of young families in the area. Co-tenants should include errand-based brands, such as PetSmart, Five Below or Michaels. Child-centric brands, such as Sky Zone Trampoline Park, are also sought after. Carter’s sells fashionable clothing for newborns, toddlers and children up to size 14.
buybuy BABY, which had been adversely affected by the bankruptcy of its parent company Bed Bath & Beyond, is now in recovery mode thanks to its acquisition by Dream on Me Industries last July. As part of the acquisition deal, Dream on Me acquired 11 of buybuy BABY’s store leases in the Northeast, and then re-opened those stores in November. With a new CEO hired in August, buybuy BABY is ready to expand at a rate of between 30 and 40 new stores per year over the next three years. Key markets in the U.S. will be targeted, with Southern California sites currently being scouted. Anticipate other affluent regions with a lower median age and a diverse population to be on buybuy BABY’s radar, including potentially the metros of Dallas/Fort Worth, Miami, Atlanta, Phoenix, Denver, Charlotte, S.C., Raleigh, N.C., Nashville, Tenn., Chicago, Minneapolis, Madison, Wis., and Cincinnati.
Preferred spaces for buybuy BABY are inline or end cap units in the 20,000- to 30,000-s.f. range, with a loading dock, in neighborhood community retail centers.
This store size is smaller than its pre-bankruptcy stores, which ran as high as 63,000 s.f. This is to create a more intimate environment with an easier-to-maneuver curated selection of the better-known, highly rated baby brands. Ideal co-tenants include apparel retailers that appeal to the higher earning yet younger consumer, such as Athleta, Tillys or Saks OFF 5TH. buybuy BABY — which sells a wide variety of baby and toddler items — will have its stores more focused on educational interactive product demonstrations and will now offer an easier baby registry scanning system that utilizes the customer’s cell phone.
Babylist, the digitally native baby gear website, opened its first showroom last summer with an 18,000-s.f. retail street-front space in Beverly Hills, Calif., next to a California Pizza Kitchen. This storefront will serve as a testing ground for possible future stores. Upcoming potential locations are rumored to be in such metros as New York City, Austin, Dallas, San Diego, Denver, Chicago, Northern California, Atlanta, Orlando, Fla., Washington, D.C., and Las Vegas.
With the exception of a small boutique offering gift-type wares, the retail space is mainly used for display-only purposes of the baby products, so that customers can view and test out the items in person before adding them to their baby registry. The in-store experiential interactive elements include rooms that feature the products in re-creations of actual home spaces, such as a bedroom nursery or a kitchen. The store also features a multi-terrain and multi-incline “stroller track” to physically test out the strollers on different types of surfaces. Future plans for the showroom include adding temporary in-store activation areas that will feature not just baby-oriented brands, but other brands that would be of interest to the shoppers, such as Wayfair. Babylist brick-and-mortar retail stores should perform well because its website origin as an online baby registry service, which culls products from various other baby-related websites, has been in operation for 13 years and has a large following.
Although Babies “R” Us has not yet officially announced new standalone store growth goals, its sister brand Toys “R” Us expects to open about 24 new U.S. stores in the immediate future. The new owner of both retailers, WHP Global, did, however, just announce that Babies “R” Us will be featured in a store-in-store concept in up to 200 Kohl’s locations by this fall, as well as having brick-and-mortar expansion in Mexico. Last summer, Babies “R” Us opened a 10,000-s.f. store in the American Dream mall in East Rutherford, N.J., through a partnership with the mall’s owner Triple Five Group. Although smaller than its traditional 35,000-s.f. warehouse-style size, the store does provide experiential experiences such as educational classes, a multi-terrain track to test strollers on various surfaces and a car-like device for testing various car seats.
