Vendors Evolve as They Embrace a Changing Marketplace

Industry Developments

Zutano, partnering with TarHong to create Zutano tableware

Vendors Evolve as They Embrace
a Changing Marketplace

Even amid the children's industry's remarkable resilience to economic woes, vendors and retailers say embracing novel approaches to business is essential to maintaining vibrant sales.

By Marianne Bhonslay

As a wholesaler, Julia Gordon has been in business for approximately twelve years. But more recently the Colorado native, who moved her company, Hi Ho Batik, to Florida in 2001, decided that relying solely on receivables from retailers was not prudent business practice amid an altering market.

In an effort to adapt to an ever-shifting economy, Gordon launched what she refers to as a "party business" in which groups come into her warehouse-turned-boutique and make their own T-shirts. Once the T-shirts are made, the merchandise is not ready to go home with consumers: people must return to the 1,200-square-foot shop to collect their sartorial work of art, and will likely be induced to make another purchase at that time. Gordon also created a Hi Ho Batik website, which sells the clothing line.

"We're not steering away from wholesale," explains Gordon, who equates her concept to pottery-making shops around the country, and says she may franchise T-shirt making boutiques. "We're opening up stores that are experiential. The wholesale market (right now) is unpredictable. Stores (retailers) are going in business and stores are going out of business. It is not in our control."

Running her own boutiques, even as she continues the wholesale business, affords an additional income, says Gordon, adding that the new business has increased revenues by as much as 50 percent.

Innovative marketing and creative merchandising are the mainstays of successful companies. Zutano adopted this ever-adapting business mindset as it began considering options for expanding its brand. The children's clothing and toys brand has been busy. It launched its first organic clothing collection for summer 2010 and expanded with new organic groupings for Spring/Summer 2011. The Vermont-based company is also in the midst of finalizing an extensive licensed collection featuring rainwear, rain boots, umbrellas, booties, tights, socks and footwear that will debut to the trade in October. This new collection from United Legwear coincides with the brand's move beyond the clothing and accessories segment.

The 21-year-old firm has partnered with TarHong to create a tabletop collection for the home (kids and adults) based on Zutano's eye-catching patterns. And it is working with Kids Line to produce Zutano bedding and room décor.

Uli Belenky, Zutano's co-founder and designer, sees the transition to home design as a natural progression.

"Zutano's brilliant colors and patterns can translate to so many home products. Vibrant color and inspired designs are ideal for tableware and will no doubt add soul and positive energy to a family meal. I'm contemplating many new colors and sophisticated patterns whose energy will be captured in a new format."

Zutano has also embraced change in its approach to retailing its wares. Just last year Zutano branched out from its traditional retail distribution of clothing stores by establishing a concept shop within the children's department of a bookstore. Northshire Bookstore in Manchester Center, VT, dedicated an estimated 250 square feet to Zutano merchandise within its 3,000-square-foot children's department, reports Northshire's CEO and general manager Chris Morrow.

The 10,000-square-foot bookstore "was interested in creating space highlighting Vermont companies and products," says Jessica Wood, manager of the bookstore's children's department and in charge of buying for that category. "Instead of doing it in a small way, which would get lost in a store like ours, we (created) a fairly large space."

Wood reports the Zutano merchandise features newborn to 4T sizes and includes "everything from booties to hats and jackets and a lot of fleece and colorful blankets," with retail prices ranging from approximately $12.50 to $42. "You could outfit your child in just Zutano," she adds.

According to Morrow, sales in the children's department since launching the Zutano boutique are up about 4 percent, and sell-through on the merchandise is "good." Given that Cabot, VT-based Zutano is a "local" company, the brand is recognized by about half the customers shopping the children's department, Wood says.

"The children's department remained strong in a difficult (economic) time," adds Wood, pointing to book and gift sales. "It became apparent that if we expanded anything, it would be children's."

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