For little ones, there's nothing quite as comforting as a Carter's sleeper and snuggling up to Mom or Dad. In addition to producing babies' and children's sleepwear, Carter's (which operates through its William Carter Company unit) is a leading maker of apparel for fashionable youngsters. Its primary products include newborn layette clothing, sleepwear, and playwear. Carter's markets its apparel and accessories under the names Carter's and OshKosh B'Gosh for sale through department and specialty stores and in more than 480 Carter's and OshKosh stores nationwide. Wal-Mart sells its Child of Mine line, while Target offers the Just One You and Precious Firsts brands; the two retailers generate about 15% of sales.
Founded in 1865 by William Carter, the company has developed a reputation for producing high-quality clothing for children, from the cradle through the early school years. The Carter's brand and private-label collections made for mass-market customers offer apparel in newborn through children's size 7; these lines are composed of mostly cotton essentials (such as bodysuits and pajamas) and when taken together typically account for about two-thirds of revenues. The OshKosh brand (acquired in 2005) extends the product range from newborns through children's size 12 and primarily consists of rugged playclothes (such as overalls and T-shirts) that are slightly more expensive than Carter's brand products. In addition to apparel, Carter's licenses bedding, toys, furnishings, baby gear, and gifts that are sold through through mass merchandisers. Its apparel and accessories are sold in more than 35 countries worldwide through licensing agreements.
Even during the economic downturn, Carter's revenues steadily climbed. The company logged about $1.75 billion in sales in 2010, up from about $1.6 billion and $1.5 billion in 2009 and 2008, respectively. The Carter' brand is outperforming OshKosh, logging double-digit wholesale and retail sales gains in 2010, compared to low single digit sales gains for OshKosh. The company's financial performance over the past several years supports the notion that children's clothing is more resistant to decline, compared to other segments of the apparel industry. While parents may opt to cut spending related to their own wardrobes, they are still buying clothing for their growing youngsters, even if they trade down to lower-cost brands or shop through off-price outlets.
The company is working to boost its revenues further through expansion of its OshKosh and Carter's retail and outlet store operations. In 2010 it opened about 30 Carter's stores and 10 OshKosh locations, after adding about that same number in 2009. In 2011 the company plans to open about 50 Carter's stores while keeping its OshKosh store count roughly the same. As its retail footprint grows, Carter's has been slashing expenses to increase profits. In 2009 the company cut about 25% of the workforce at OshKosh's headquarters and relocated remaining positions to its other offices. It later sold the office in Oshkosh, Wisconsin. Also that year, Carter's shuttered a distribution center in Barnesville, Georgia. Cost control is important for Carter's, as the recent abnormal spike in cotton prices is expected to pinch profits in 2011.
Carter's saw its leadership change in August 2008, when Michael Casey, who'd served as CFO since 2003, succeeded retiring chief executive Frederick Rowan. Since joining Carter's in 1992, Rowan led the firm through the development of additional brands, as well as the OshKosh B'Gosh acquisition.
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