Tiny tots: big bottom line

NATIONAL: Wholesalers and manufacturers which cater to the growing designer infant apparel market will power through economic uncertainty, an industry research institute has claimed.

IBISWorld analyst Raghu Rajakumar said the decline in onshore manufacturing had seen a recent boom in the wholesale sector, with data indicating trend-driven infantwear suppliers were among the stronger performers. The wholesale industry is expected to increase by three per cent in the 2008 financial year to $5.6 billion.

"[Infantwear] wholesalers which provide products to differentiated retailers such as boutiques that target high-income earners are less likely to be affected by increased economic uncertainty and perform well," Rajakumar said.

He said strong demand from female consumers was also expected to drive the wholesale and manufacturing industry over the 2008 financial year. Women's and girlswear manufacturing is expected to make up to 20.2 per cent of the overall clothing production in Australia over 2007/2008, up from about 19.5 per cent in 2006/2007.

Sleepwear, underwear and infant manufacturing is expected to make around 12 per cent of overall revenue in the industry in 2007/2008. Men's and boyswear production, however, will make up just 8.5 per cent of the sector, down from nine per cent in 2006/2007. 

"While both men's and women's clothing manufacturing are shrinking industries in Australia, overall it is generally easier to produce low priced men's and boyswear offshore because they are more generic products and less reliant on new fashion trends," Rajakumar said.

He said women were also less likely to curb spending when consumer confidence declined. "Because of this, men's clothing is expected to under-perform compared to women's clothing as expected higher interest rates will result in men's purchases being postponed."

Rajakumar's comments follow the release of a report by commercial specialist Jones Lang LaSalle, which alleged the demand for upmarket children's and infant apparel was at an all-time high. The report, dubbed 'Y'Topia - Capturing Retailers Paradise', claimed the growth of affluent Generation Y parents was driving demand for trend-driven, quality infant apparel. 

By Assia Benmedjdoub