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About The William Carter Company

Carter's has built a big business catering to little ones. Operating through William Carter Company, Carter's is the largest maker in the US of branded apparel exclusively for babies and young children. Primary products include newborn layette clothing, sleepwear, and playwear. It markets its items under the Carter's, OshKosh B'Gosh, and Skip Hop brands, as well as private labels Child of Mine, Just One You, and Simple Joys. While Carter's sells products online and wholesale via more than 17,000 department and specialty stores, it also operates about 850 Carter's and OshKosh stores in the US and 200 stores in Canada.

Operations

Carter's divides its business into three segments: US Retail, US Wholesale, and International.

US Retail generates around 55% of Carter's sales and comprises the direct retail activities of its main brands, Carter's and OshKosh (and to a lesser extent, Skip Hop, a brand best known for its diaper bags acquired in 2017). Carter's produces essential baby clothes such as bodysuits, pajamas, bibs, shoes, and swimwear and trades at some 420 shops in the US. OshKosh serves a slightly older demographic (newborn to 14) with more on-trend clothes at a higher price point, sold at around 100 stores. Carter's also operates some 160 side-by-side and 150 co-branded stores.

The US Wholesale division generates a third of Carter's sales and distributes products to third-party retailers such as department stores, national chains, specialty stores, and discount retailers.

Carter's International operation comprises the retail, wholesale, and online retailing of its brands in Canada and Mexico and online-only in China, as well as royalty income from its international licensees.

By category, playclothes account for some 45% of Carter's sales, baby products 35%, and sleepwear more than 10%. 

Geographic Reach

Carter's is based in Atlanta, Georgia. The company racks up the vast majority of its sales in the US, at nearly 90%, while Canada represents most of the rest. Carter's has distribution centers in Braselton and Stockbridge, Georgia, and has outsourced distribution activities in California. Outside the US, Carter's operates directly or outsources its distribution activities to third-party logistics providers in Canada, Mexico, China, and the UK.

The company outsources all its manufacturing to Asia, particularly Cambodia, China, Vietnam, and Bangladesh, supported by a sourcing office in Hong Kong. 

Sales and Marketing

Carter's markets its products through the department stores, national chains, outlet, specialty stores, off-price sales channels. Outside the US the company partners with 34 licensees to sell the Carter's and OshKosh brands in 40 countries. Carter's main wholesale partners are Amazon, Costco, JCPenney, Kohl's, Macy's, Target, and Walmart. Sales to its ten biggest wholesale customers accounted for approximately 30% of total revenue.

The struggling department store sector comprises a significant portion of Carter's customer base. Bankruptcies and store closures will impact on sales and trigger a costly recovery claims process. 

Carter's enjoys a #1 position in the $21 billion branded children's apparel (ages 0-7) market with a 14% market share. OshKosh has a 2% market share. Because the company uses a variety of distribution channels, it's able to market its products to a more diverse range of consumers and geographic regions. Wal-Mart sells its Child of Mine line, while Target offers the Just One You and Precious Firsts brands.

 

Financial Performance

Carter's revenue has been growing steadily but unspectacularly over the last five years, while its net income has been on a similarly upward trend.

In 2018 the company's sales grew 2% to $3.5 billion amid strong growth in its US Retail channel, particularly in the winter months, supported by the revenue contribution from the acquired Skip Hop business. The US Wholesale segment declined due to store closures and bankruptcies among Carter's department store customers. International sales grew slightly. 

Net income fell 6% in 2018 to $282.1 million as an increase in selling, general, and admin expenses eroded operating margin in the US Wholesale segment. These expenses a rise in distribution costs, recovery settlements relating to customer bankruptcies, and a decrease in performance-based compensation.

Carter's cash position reduced slightly in 2018, ending the year $8.4 million lower at $170.1 million. Its operations generated $356.2 million, an increase on prior year, while its investing activities used $63.3 million in cash and its financing activities used $298.9 million. The company deployed operating cash on paying down debt and stock repurchases and increased its dividend.

Strategy

As the millennial generation slides into parental age, Carter's is upping its digital programs to increase and retain brand loyalty. As well as a stronger social media strategy, Carter's has opened up multichannel offerings such as click-and-collect, optimized its website for mobile, and launched an app. Marketing efforts have included a new reward scheme, Rewarding Moments, which has been a success: In 2018, the majority of US retail sales were made to members of the scheme.

Mergers and Acquisitions

In 2017, Carter’s acquired Skip Hop, a New York-based maker of diaper bags, backpacks, travel accessories, and home gear. The business was acquired from private equity firm Fireman Capital Partners for $140 million. Carter’s hopes to leverage its reach to make serious inroads for the brand in the US.

Company Background

The company in 2013 acquired worldwide rights to the Carter's Watch the Wear and H.W. Carter & Sons brands (including trademark registrations) for $38 million.

Carter's extended its reach northward into Canada and added an international segment to its business as a result of the company's 2011 $98 million purchase of Bonnie Togs, a Canadian specialty retailer of children's apparel and accessories. Bonnie Togs had been Carter's principal licensee in Canada since 2007.

Carter's was established in 1865 by William Carter.

The William Carter Company

3438 PEACHTREE RD NE STE 1800
Atlanta, GA 30326-1554
Phone: 1 (678) 791-1000

Stats

Employer Type: Privately Owned
Pres: Joseph Pacifico
Sr V Pres Of Hr: Gill Wilson
Director Global Inventory Control: Howard Wishnia
Employees (This Location): 900
Employees (All Locations): 16,800

Major Office Locations

Atlanta, GA

Other Locations

Anthem, AZ
Chandler, AZ
Tempe, AZ
Tucson, AZ
Apple Valley, CA
Camarillo, CA
Canoga Park, CA
Carlsbad, CA
Chino, CA
Compton, CA
Folsom, CA
Gilroy, CA
Irvine, CA
Long Beach, CA
Milpitas, CA
Mountain View, CA
Petaluma, CA
Pismo Beach, CA
San Diego, CA
San Jose, CA
Torrance, CA
Tracy, CA
Vacaville, CA
Castle Rock, CO
Colorado Springs, CO
Highlands Ranch, CO
Lakewood, CO
Loveland, CO
Danbury, CT
Norwalk, CT
Stamford, CT
Wilmington, DE
Destin, FL
Ellenton, FL
Estero, FL
Fort Lauderdale, FL
Homestead, FL
Miami, FL
Orlando, FL
Saint Augustine, FL
Sunrise, FL
Vero Beach, FL
Atlanta, GA
Columbus, GA
Dawsonville, GA
Fayetteville, GA
Griffin, GA
Savannah, GA
Stockbridge, GA
Waipahu, HI
Williamsburg, IA
Bolingbrook, IL
Deerfield, IL
Geneva, IL
Gurnee, IL
Orland Park, IL
Tuscola, IL
Fremont, IN
Indianapolis, IN
Michigan City, IN
Kansas City, KS
Newton, KS
Bossier City, LA
Gonzales, LA
Saugus, MA
Watertown, MA
Wrentham, MA
Annapolis, MD
Hagerstown, MD
Queenstown, MD
Kittery, ME
Auburn Hills, MI
Birch Run, MI
Farmington Hills, MI
Holland, MI
Troy, MI
West Branch, MI
Saint Paul, MN
Hazelwood, MO
Osage Beach, MO
Sikeston, MO
Gulfport, MS
Vicksburg, MS
Smithfield, NC
Winston Salem, NC
Edgewater, NJ
Flemington, NJ
Matawan, NJ
Moorestown, NJ
Sicklerville, NJ
Succasunna, NJ
Albuquerque, NM
Las Vegas, NV
Bronx, NY
Carle Place, NY
Central Valley, NY
New York, NY
Niagara Falls, NY
Riverhead, NY
Aurora, OH
Burbank, OH
West Chester, OH
Bend, OR
Troutdale, OR
Tualatin, OR
Woodburn, OR
Grove City, PA
Hershey, PA
Lancaster, PA
Moosic, PA
Philadelphia, PA
Tannersville, PA
Charleston, SC
Gaffney, SC
Myrtle Beach, SC
Lebanon, TN
Murfreesboro, TN
Pigeon Forge, TN
Sevierville, TN
Allen, TX
Austin, TX
Conroe, TX
Frisco, TX
Garland, TX
Hillsboro, TX
Houston, TX
Humble, TX
Hurst, TX
Lewisville, TX
Mercedes, TX
Midland, TX
Pearland, TX
Rockwall, TX
Round Rock, TX
San Antonio, TX
San Marcos, TX
Shenandoah, TX
Southlake, TX
Sugar Land, TX
Sunset Valley, TX
Tyler, TX
Waco, TX
Webster, TX
Wichita Falls, TX
Park City, UT
Falls Church, VA
Woodbridge, VA
Brattleboro, VT
Essex Junction, VT
Manchester Center, VT
Auburn, WA
Centralia, WA
North Bend, WA
Baraboo, WI
Johnson Creek, WI
Oshkosh, WI
Pleasant Prairie, WI