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How to open a childrenswear shop

Updated on June 14, 2008

Introduction

You have had children and are looking for something to do which will combine your interest in business with your role as a parent.

A baby or childrenswear shop seems like a good choice. Not only do you like children's products and shopping in independent boutiques for your own children's clothes but you think it will offer you a degree of flexibility in looking after your own children.

The dream often turns into the harsh reality of a long financial struggle so I thought I would share my experiences and offer some tips on how best to go about opening a childrenswear shop, having made many mistakes myself along the way. Here are some of the things I wish someone had told me!

Gather Information

Before you do anything else, you need to gather information.

A useful place to start is a visit to the website of the National Childrenswear Association. You can join the association for an annual fee and they will provide you with relevant information and assistance. Their website is at www.ncwa.co.uk. It also contains a list of manufacturers and their agents so this is a good place to look to source the brands which you like.

The most useful publications are:

1. Childrenswear Buyer Magazine - there is a link to it from the NCWA website or you can go directly to their website at www.ras-publishing.com/cwbintro.htm. There are many articles as well as advertisements for products.

2. Drapers Magazine - this is for the fashion industry generally but also includes articles and surveys relevant to childrenswear

3. Junior Magazine - this is aimed at consumers but still proves a useful read especially to keep on top of the latest children's fashion trends.

Planning

Trade Shows

First, you need to spend at least a year planning. Don't rush into it or you will get it all wrong and make expensive mistakes that you can't easily rectify.

It is a good idea to visit the trade shows such as Premier Kids in Birmingham (end January and mid July) and the gifts fairs across the country. Log on to www.premierkids.co.uk or ww.clarionretail.co.uk for free entry tickets and further details. When you go, go with the intention of looking only. Don't be tempted to buy anything but use it as an information gathering exercise.

Make a list of the brands you like, collect brochures, leaflets, web details and as much information as you can gather. Talk to sales persons, other retailers and book yourself in to the free seminars on subjects such as buying, setting up a business and marketing.

If you are ready to buy, make appointments with the agents at a later date when you have had time to think things through. It is helpful to take a digital camera with you and take some snapshots to remind yourself of what you have seen.

Further Planning

Out and About

Look around you at what children are wearing in your town. Just because you live in an affluent area it does not mean that people want to spend their money on children's clothes; school fees, cars and horses might be more important to them.

If you are in an area where designer labels are important then you will probably do quite well selling them the labels they want but this is by no means universal across the country. Distinguish also between classical or traditional labels, fashionable labels and European designers. If children are all wearing H&M, Tesco or Primark clothes then do not open because you will not be able to compete with the value retailers.

Think also about who your target market is likely to be; for example, a large number of sales are to grandparents buying gifts for their grandchildren. They tend to go more for traditional and practical clothing; money is less of a consideration because they have made money from property and may have downsized. Grandparents are much less likely to buy on the internet however so if you are selling online, you need to target mothers much more.

Apart from the types of styles people want to buy, think what items they are likely to buy. When a baby is born, people want to buy it a present and they often buy clothes such as babygros and little outfits. There is a huge market in new baby gifts so quite a lot of your budget needs to be concentrated on this area. For new babies most people don't want to buy "proper" clothes so sell them velour babygros, cotton rompers, hats, bodysuits, cardigans and some outerwear in the sizes up to about 6 months. People love sets or anything that is already packaged as a gift. You will need some items for small babies as there are quite a lot of premature births, a small amount of newborn (this is not a popular size as babies grow out of it in a couple of weeks) and more 0-3 months and 3-6 months, the latter being the most popular size for gifts as everyone assumes that everyone else will be buying 0-3 months. Think also about seasons because if someone is buying for a new baby in July they will need summer clothes in 0-3 months and winter clothes in 3-6 months.

When babies get older think about the practicalities of the clothes as well as what they look like. White and other pale colours are more or less out once the baby is weaned and crawling babies need clothes that are hardwearing. Dresses are OK for small babies but out once they are crawling purely because it is quite difficult to crawl in a dress but very much back in demand once the children are walking steadily. So the biggest selling size for dresses is 12-18 months, also because they make an ideal first birthday gift for girls. Don't forget about nappies too. Poppers underneath are essential for changing and babies hate having tight clothing pulled over their heads; buttons or poppers across the shoulders are also important. And steer clear of any stiff uncomfortable fabrics. Most importantly, check that everything is machine washable.

With older children it gets much more difficult. Shoppers complain constantly that there is no choice for boys but try to offer them choice and something a bit more colourful or unusual and they won't buy it. So don't take thse comments too seriously. Boys clothes need to be practical, washable and hard wearing beyond anything else.

Girls are much easier and you should spend much more of your budget on girls. In my shop I have found it to be about a third boys compared to two thirds girls but I would be interested to know if other people's experiences are the same. People are also willing to spend double the money on an item of girls' clothing compared to boys.

As for colours, pink still seems to be the favourite colour for younger girls and orange and green are unpopular.

The Weather

One of the most important factors affecting your business is the weather. This affects you in three ways, first, when people shop, secondly, the way people shop and thirdly, what they buy.

If it is raining, people won't walk outside but either stay indoors, surf the net or travel to shopping centres where they can shop comfortably and make the shopping into an outing for the family. So in wet or windy weather, street shops suffer and shopping centre and online shops do better business. Cold weather doesn't seem to make much difference as shoppers will dress accordingly.

If it is warm and sunny, people are less inclined to shop altogether but if they do, they may prefer to walk outside rather than visit shopping centres. If it is really hot then again they stay indoors or visit shops which are airconditioned.

Of course no-one can predict the weather but you should know that the weather has a huge impact on where people shop so bear this in mind when calculating footfall. A poor summer such as that in 2007 led to a downturn in sales of summer clothes; conversely sales of these rocketed in April of 2007 when warm weather conincided with the Easter holidays. A long wet spell could be a long period of reduced sales and you will need strong cashflow to tide you over.

Secondly, the weather influences what people buy. Most people do not plan their shopping in advance (except Christmas shopping which can start as early as June) but buy when they need something. So you can usually only sell school uniform in summer and at Easter, rainwear when it is actually raining (mostly sold when people are caught out and need that raincoat there and then), shorts when the temperature exceeds 25 degrees and to sell coats it really does have to be cold out there!

Remember that is only gets cold in November but that the big stores start their sales in December so not many people will buy a coat before the sales start. So think twice before you stock lots of coats; not only are you likely to have to sell them at a discount but they tie up your money as well as taking up lots of space in your shop as they are bulky.

There are some things that sell really well all year round because the big shops don't sell them. One of these items is swimwear. Children swim in winter as well as summer but the stores only sell swimwear in summer. Strange, but an opportunity you can take advantage of. Parents will tell you that children are forever losing or breaking their goggles so if you position some goggles next to the swimwear you are bound to sell many pairs.

The Buying Process

I thought I would write a few words about the buying process as this can be very daunting to start with.

The buying for spring/summer is done between July and October and that for autumn/winter between January and April. Sometimes it is better to buy early in the season; if you are buying from a distributor, he will have a limited amount of stock to sell on and when it's gone it's gone so the earlier you get in there the better choice you will have. Or sometimes, a manufacturer will have bought the fabric in advance and there is a limit to the number of garments that can be made from it so styles will be cancelled during the buying season.

Sometimes it is better to buy later; in cases where the agent has not yet received all the samples or where the unpopular colours are cancelled during the buying season. You will soon work out how best to time this.

Don't rely on the delivery times you are told; they can be early or late and you have little control over them. If you don't want your deliveries too early or too late then specify the earliest date you will accept and a date by which you can cancel if they arrive too late.

Don't rely also on every item arriving as some items will invariably be cancelled. This can be annoying when you have bought items to make up a set so there might be times when it is appropriate to specify that you won't accept one item without the other.

The way it generally works is as follows:

Apart from the ability to place orders at the shows, the manufacturer's agent will either visit you at your premises (usually if there is a relatively small collection to show) or you make an appointment to visit them if they operate a showroom. You are then shown samples of each piece of clothing - the factory will have made up one of each item only - and you then order from those samples.

Some manufacturers will allow you to order individual pieces in individual sizes and colours; others will sell them as a pack with a preselected sizing and colour matrix. For the latter you might have a pack of 12 which comprises boys' trousers in sizes 6-12 months, 12-18 months and 18-24 months where you get two of each in two colours, say green and blue. The sample may only be in one colour so it is important to check what the second colour will be as the second colour could be a very strange one which you might find is unsaleable.

Clothes are usually divided into age groups with some crossing over age categories. Common age ranges are 0-9 months, 3-24 months, 0-36 months, 2-6, 2-7 , 2-8 years and 2-10 years and 6-16 or 8-16 years. You will need to bear this in mind when thinking out displays for your shop.

Go through the clothes you like the look of first and put them on the little rail which the agent will give you. Do them in batches such as baby girls, then baby boys etc. Then go through them more carefully looking at the prices and colour options. Discard any which are too expensive even if you like them - work on double the wholesale price to get to the retail price and see whether you think the price is realistic. Many prices are in euros; make sure you know the exchange rate yourself and how to convert to pounds and don't rely on what the agent tells you. Discard any which don't have anything to match with them or which aren't in the ideal sizes. Whittle them down again making sure you buy several matching pieces in each story. Different colours and styles are divided into stories which mix and match the items within them. It is better to buy several items from one story than a few items from each storey as they will sit better together.

Think about interesting pieces and basic items; the latter should be cheaper. Whilst people are willing to pay a premium for a dress or a nice piece of knitwear, they will not do so for something they can buy cheaply from a supermarket such as a plain pair of jeans or a T-shirt. Consider buying the basics at basic prices elsewhere as customers do like to complete their outfits such as buy a plain long sleeved top and pair of tights with a pinafore dress but are not necessarily willing to spend sufficient money on a basic item from the same designer as the dress.

Once you have placed the order, you do enter into a legally binding contract and although you are usually entitled to a certain cooling off period of about 7 days during which you may cancel, you will be liable for hefty cancellation charges if you try to cancel any later than this. Read the terms and conditions on the back of the order form.

Some companies may try to prohibit you from selling online, others levy substantial interest charges for late payment and some offer you good discounts for early payment which are often worth taking up if your cashflow is sufficient.

Fabrics and Fit

When you have whittled down the items you like on the basis of style, size, colour and price, you also need to take into account the fit of each item and the fabric it is made from. I will set out some examples here:

1. Children tend to get their clothes dirty quite easily so washability is a major factor, I would advise you strongly against buying anything which is dry clean only unless it is a special occasion dress which may only been worn once or twice but even then it will put off the vast majority of customers. Look out also for handwash only items; again not popular with busy mums. Make sure also that the clothes are colourfast. Check that the fabric will wash well - 100% cotton sweaters can sometimes become shapeless on washing and some fabrics will shrink.

2. Children come in all different shapes and sizes so adjustable clothing is always popular. Many children are very slim around the waist and hips and their trousers and skirts constantly fall down. Adjustable waistbands are becoming more widespread so busy mums don't need to take in the waistbands so you should look out for these. Overweight children prefer elasticated waistbands.

Some children have short legs in relation to their waist and their parents are always greatly relieved to find a pair of three quarter length trousers which fit them as long trousers so consider stocking some of these for summer.

3. Some babies can't tolerate any kind of waistband so stock some dungarees or dresses for them

Consider the way clothes are put on. Babies in particular, but older children too, hate having anything tight pulled over their heads. So check for some kind of opening on polo necks and other tops such as a zip or buttons. For young babies, buttons across the shoulder are very popular.

Many people do not like their children to wear synthetic fabrics so make sure you do stock some 100% cotton garments.

4. Jeans are quite difficult to sell unless you can offer a wide choice of styles and fittings; most mums buy their boys' jeans in GAP because they have a good selection.

5.Avoid fabrics which are scratchy such as some woollen jumpers or with uncomfortable lace or net trims as children will detest them.

6. For baby girls, many people prefer dresses and tops to have short sleeves to avoid sunburn on the shoulders so avoid strappy tops and halter necks for babies.

7. Watch out for neck cords in hoodies and similar garments as these are now governed by stringent regulations which you are advised to check out. Similarly there is legislation relating to flammability of nightwear.

How much to buy?

Test a label first by ordering a small quantity of their garments; most manufacturers will be happy in the current climate to sell you an order of around £500. If they persuade you that their minimum order is higher then don't buy from them. One of each size is usually sufficient until you know what sells and what doesn't.

I am not going to set out in this article what you should buy; it is too subjective.

Profit Margins

Moving onto margins...... most childrenswear retailers work on a mark up of double, some 2.2 but you are not going to realistically going to get more than that really unless you sell cheap goods at the bottom end of the market. If you can buy well then these cheaper goods are good for mixing in with the rest of the stock to boost your overall profit margins. The margins on childrenswear are really very tight and it is so hard to make any money so anything that improves them must be encouraged.

Paying for goods

If it is your first order and you have no trading history you will probably have to pay for it in advance. This is the start of the difficult cashflow situation. Deliveries may well arrive much earlier than you want them so make sure you have plenty of money to fund the cashflow. This is the hardest part because you pay before the goods arrive and might well run out of money before you sell them so make sure you have plenty of money as a back up. After the first order, most companies will give you credit and between 30 and 60 days to pay after the goods are dispatched. Take advantage of their discounts of between 2 and 10 % for early payment as these will improve your margins greatly; if you have the cash of course.

Find out when you order when and how you will be expected to pay for the goods. Check also that you know which currency you will be invoiced in. The euro exchange rate has moved against sterling by about 15% in the last year. Currency fluctuations will affect the price you pay and the price you can charge so bear this in mind when ordering and stick to pounds wherever possible.

Check whether you can pay by BACs, credit/debit card or cheque and whether a fee will be levied for card payments. Or are you required to pay an overseas supplier by telegraphic transfer? This can be costly especially on small invoice amounts.

Take all of this into consideration when placing an order.

Timing

Now you have some ideas about your stock, I will mention timing and premises. This is where it gets tricky because you generally order your winter stock between January and April for delivery in July to September or your summer stock in July to October for delivery in January to March. If you order your stock first you may find you have no premises, if you find the premises first then you will have no stock. You will have to work out how best to play it. If you leave your ordering to the latest moment say April but look for premises at the same time so you secure the premises by April and allow 3 months for the conveyancing then it could all tie in quite nicely for opening in say September but you are always at risk of the premises falling through. A difficult one to which there is no easy answer.

It is probably worth opening at the beginning of a season ie January or August rather than mid season otherwise you will straight away be competing with shops going into sale and you really need the maximum opportunity to sell your goods in the season at full price.

Premises

The subject of premises is worthy of an article by itself so please see the author's related article at

Selling on line

Please note that this article only covers selling via a traditional bricks and mortar shop and does not cover the important subject of selling online which will be covered in another article at a later date.

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    • justdresses lm profile image
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      justdresses lm 3 years ago

      @anonymous: These brands aren't available through a general wholesaler. The company sells them directly via their agents. If you are in the UK, you can get info from the National Childrenswear Association.

    • profile image

      anonymous 4 years ago

      Hi does anybody nowhere to buy desinger baby clothes eg. Burberry monnalisa catimini olilly?

      I'm looking to open a shop but don't no which wholesales sale these kind off designers?

    • profile image

      anonymous 4 years ago

      Thank you for taking the time to share your knowledge and for providing some very useful advice.

    • rosytaylor profile image

      rosytaylor 6 years ago

      Hi! This is an amazing and Awesome lens. Thanks for sharing such a nice lens. Nicely done, Keep up your great work!

    • profile image

      anonymous 6 years ago

      Thank you for you article.It has really given me useful tips cos am about paying for a shop in warri Delta State Nigeria to start childrens wear business for my wife believing God for favour especially on good capital to start with for a better cash flow like you mentioned.Iwould also appreciate some tips on best way to take dayly sales accounts.Thanks

    • profile image

      anonymous 6 years ago

      Thank you for you article.It has really given me useful tips cos am about paying for a shop in warri Delta State Nigeria to start childrens wear business for my wife believing God for favour especially on good capital to start with for a better cash flow like you mentioned.Iwould also appreciate some tips on best way to take dayly sales accounts.Thanks

    • profile image

      anonymous 6 years ago

      I have been thinking about starting a small business, selling childrens clothes and nursery equipment, I found the article very helpful.

    • profile image

      anonymous 7 years ago

      I am in the process of opening a childrens store in the Cayman Islands. There is a great need for boys clothing so my store will specialize in there apparel but also includes girls apparell. I am trying to gather as much information as possible but feeling overwhelmed because i don't know where to start especially after looking at so many wholesale stores. I did enjoy this article which is very informative.