IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
INDUSTRY REPORT
Children's &
Infants' Clothing
Stores in the US
Apr 2023
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
Table Of Contents
3. Performance................................................................ 5
Performance Snapshot............................................ 7
Highlights..................................................................... 5
Volatility...................................................................... 12
Key Takeaways............................................................5
Outlook....................................................................... 14
Executive Summary...................................................6
Life Cycle.................................................................... 15
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
Performance
Track historical, current and forwardlooking trends in revenue, profit and
other performance indicators that
make or break an industry.
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
3. Performance
https://my.ibisworld.com//us/en/industry/44813/performance
Highlights
Revenue
Employees
Businesses
$7.5bn
89,608
13,983
2018-23 CAGR
↓ 8.1 %
2018-23 CAGR
↓ 2.4 %
2018-23 CAGR
↑ 0.4 %
2023-28 CAGR
↑ 0.6 %
2023-28 CAGR
↑ 0.1 %
2023-28 CAGR
↓ 0.2 %
Profit
Profit Margin
$231.2m
3.1%
2018-23 CAGR
2018-23 CAGR
↓ 10.8 %
↓ 0.5 pp
Key Takeaways

Enterprises have been shifting their focus away from selling in physical locations in favor of
online sales. E-commerce accessibility has enabled companies to compete with alternatives like
subscription boxes and mitigate price fluctuations, siphoning away demand.

The pandemic severely hindered industry operations, as retail storefronts were shutdown. The
economic reopening has resulted in a relative surge of brick-and-mortar retail sales but
reinvigorated demand has been short lived and less pronounced than the revenue plummet that
proceeded it.
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
Executive Summary
The Children's and Infants' Clothing Stores industry includes stores that specialize in retailing apparel for
children under the age of 17 and also includes online sales. While macroeconomic growth has encouraged
shoppers to splurge on high-end children's clothing through the end of 2023, many apparel purchases have
been captured by industries that directly compete for consumer dollars. For example, online-only shopping
retailers have become increasingly acceptable and preferable, siphoning demand away from brick-andmortar establishments. This digitization push resulted in revenue plummeting at a CAGR of 8.1% to an
estimated $7.5 billion through the end of 2023. The average profit margin is also expected to slump to 3.1%
in 2023, as purchase costs have accounted for a higher portion of revenue.
Children's clothing stores endured significant complications amid COVID-19. Nonessential businesses were
forced to closed down, resulting in a country-wide recession that crucially impaired clothing stores' ability
to properly operate. Traditional children's clothing stores have been consistently shifting their focus and
priority away from selling in physical retail locations in favor of generating online sales, which helped offset
major losses for traditional clothing stores. This shift was exacerbated in 2020, evidenced by consumer
behavior amid the pandemic. E-commerce sales spiked 39.1% in 2020 alone due to government-mandated
stay-at-home orders and establishment restrictions. Despite the economy reopening, these trends are
anticipated to persist due to the continued reliance and popularity of online-only shopping. In fact, ecommerce sales are expected to grow 6.8% in 2023, boosting online sales across traditional clothing stores
and cause revenue to inch upward an estimated 0.3% in 2023 alone.
Through the end of 2028, children's clothing stores are expected to recover, primarily due to high volume
of online sales. As the economy continues its recovery and retail stores reopen at full capacity, there will be
an uptick in brick-and-mortar shopping. However, online-only retailers are expected to continue being a
prominent competitor because of the ongoing market adaptation to the virtual economy. These trends are
expected to cause revenue to inch upward at a CAGR of 0.6% to an estimated $7.7 billion through the end
of 2028.
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
Performance Snapshot
↓ 2018-23 Revenue CAGR -8.1%
Revenue:
Revenue
$7.5bn
’18-’23
↓ 8.1 %
’23-’28
↑ 0.6 %
2023 Revenue CAGR
Revenue Volatility
↑ 0.3 %
Moderate
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
Employees:
Employees
Employees per Business
Revenue per Employee
89,608
6
$83,229
’18-’23
↓ 2.4 %
’18-’23
↓ 2.8 %
’18-’23
↓ 5.8 %
’23-’28
↑ 0.1 %
’23-’28
↑ 0.3 %
’23-’28
↑ 0.5 %
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
Businesses:
Businesses
Employees per Business
Revenue per Business
13,983
6
$533.4k
’18-’23
↑ 0.4 %
’18-’23
↓ 2.8 %
’18-’23
↓ 8.5 %
’23-’28
↓ 0.2 %
’23-’28
↑ 0.3 %
’23-’28
↑ 0.8 %
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
Profit:
Total Profit
Profit Margin
Profit per Business
$231.2m
3.1%
$16,534.2
’18-’23
’18-’23
’18-’23
↓ 10.8 %
↓ 0.5 pp
↓ 11.1 %
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
Performance Snapshot
What's driving current industry performance?
Economic volatility during COVID-19 harms clothing store stability

Since children's and infants' clothing stores operate exclusively as traditional brick-and-mortar
retailers, the pandemic severely harmed consumer demand.

The implementation of social distancing measures and lockdowns at the state level hampered
broader economic sentiment and cut consumers' disposable income, forcing them to purchase
clothing less frequently.

As economic conditions worsened, consumers shifted toward readily available alternatives, such as
online-only retailers, further damaging traditional clothing stores' stability.
Acceleration of e-commerce impacts consumers' shopping habits

A consistent development through the end of 2023 is the rapid adoption of digital shopping, online
stores and e-commerce retailers that have heightened competition for traditional children's clothing
stores.

With technology expanding to hand-held smartphones and mobile applications that enable ecommerce access for consumers at their fingertips, traditional stores continue to endure a slump in
demand.

Despite steady growth in the children's population demographic, that demand niche has continued
to be captured by online-only retailers at a larger rate, dampening revenue within online sales and
among traditional clothing stores.
Fluctuation in the price of fiber influences revenue deceleration for smaller clothing stores

Wild fluctuation in the price of fiber following COVID-19 heightened procurement costs for many
children's and infants' clothing stores.

Synthetic and nonsynthetic fibers are crucial materials used in children's clothing, so any drastic
changes in pricing will influence the cost of goods sold and cause consumers to shift their buying
habits toward less expensive alternatives.

Ongoing supply chain issues following the pandemic have complicated this trend, forcing many
stores to hike prices to offset higher costs of cotton and synthetic fibers.
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
Volatility
What influences industry volatility?
Children's and infants' clothing stores endured moderate volatility, fueled by economic uncertainty

A core metric of stability for traditional children's clothing stores is economic stability at the
macroeconomic level, as it influences consumer sentiment and the rate of consumer spending.

The volatility caused by COVID-19 in shifting consumers' shopping habits highlights how important
stable economic conditions are in ensuring stability among clothing stores.
Slower rate of change among fashion trends stabilizes revenue volatility

Children's and infants' clothing stores always compete on product quality and availability,
particularly in relation to constantly evolving fashion trends.

A slower rate of adoption of new fashion trends, coupled with stable seasonal trends in the types of
kids' clothing sold in the open market, helped stabilize broader revenue patterns.
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
How do successful businesses overcome volatility?
Control inventory
It is essential to have adequate inventory controls in place to reduce inventory costs and increase
stock turns.
Implement superior financial management and debt management
Successful clothing stores have financial management controls in place to control cash flow and
reduce debt.
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
Outlook
What's driving the industry outlook?
Rapid economic recovery following COVID-19 dampens larger revenue collapse

Even as children's and infants' clothing stores continue to deal with fierce competition from onlineonly retailers and department stores, economic recovery helped bolster consumers' propensity to
spend more on clothing.

Strong rebounds in per capita disposable income and the Consumer Confidence index helped fuel
this recovery, with consumers having more fiscal flexibility in acquiring a larger quantity of clothes.

Steady growth in the number of children aged nine and younger is poised to provide a crucial
lifeline to traditional clothing stores by expanding the pool of potential clients.
Exorbitant rise in e-commerce retail poised to siphon away crucial revenue streams

As more stores shift to an online, direct-to-consumer (DTC) business model, heightened penetration
of e-commerce is set to damage long-term growth prospects for traditional clothing stores.

COVID-19 severely altered consumers' shopping habits and encourages more customers to shop
online because of time convenience and affordable pricing, which helped offset significant revenue
losses.

With technology continuing to add convenience and ease for the average consumer, traditional
clothing stores face difficulties in securing a steady consumer niche moving forward and must rely
on online sales as a primary driver of revenue.
Continuity in competition diminishes chances of long-term recovery

The presence of a variety of external competitors, ranging from traditional department stores to
exclusively online-only retailers, will significantly influence a future recovery.

Since children's and infants' clothing lacks significant proprietary qualities, a variety of sectors and
stores can secure customers through more customer-friendly prices, family discounts and broader
convenience.

Nonetheless, an expected slowdown in the Consumer Price Index is poised to benefit consumers'
purchasing power, creating a chance for traditional children's clothing stores to secure core
customers for steady revenue growth in the future.
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
Life Cycle
Why is the industry declining?
Contribution to GDP
Children's and infants' clothing stores are slumping compared with US GDP. The acceleration of online-only
retailers, coupled with economic volatility during COVID-19, lowered contributions to GDP.
Market Saturation
There is some market saturation across children's stores, with most clothes geared toward girls and boys.
The prevalence of female children across families creates a consistent demand niche for stores.
Innovation
There are few innovative qualities exhibited by children's and infants' clothing. Most innovation focuses on
customer service through improvements of check-out systems and advancement in product quality.
Consolidation
Most of the clothing stores' core customers are located near highly populated centers. Children's and
infants' clothing is also predominantly popular in suburban regions with a higher percentage of families,
creating a lucrative opportunity for smaller stores.
Technology & Systems
Children's and infants' clothing stores use technology frequently. Most of the technology in use across
stores focuses on improving customer service through implementation of electronic barcode scanners and
electronic surveillance to protect against theft.
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IBISWorld | Children's & Infants' Clothing Stores in the US
Apr 2023
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