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Pottery Barn threading the needle between kids’ rooms and closets

11/12/2007

SAN FRANCISCO —Browsing through the merchandise at Threads, one may think of a ‘shop around the corner’ children’s wear boutique. A closer look at the signage, however, reveals that the silk checkered dress and the cotton cashmere sweater are products of Pottery Barn Kids.

The Williams-Sonoma company has added yet another name to its repertoire in order to cushion the furniture segment. “My guess is that they are looking at this as an opportunity to branch out beyond home goods,” said Mary Brett Whitfield, senior vp of TNS Retail Forward, a retail consulting firm. “As we all know, home goods have come across some pretty hard times. Pottery Barn has capabilities in textiles that can be leveraged in apparel.”

The first Threads store opened this October, only a few doors down from Pottery Barn Kids, at Bellevue Square in Bellevue, Wash., a suburb of Seattle. Inside, apparel and some accessories for children 36 month and younger are set up in a space that gently reminds customers of an elegant children’s bedroom.

Picture frames adorn the walls and tables. Some actually match a collection of dresses. Baby shoes and teddy bears are among other items placed around the store. For a touch of individualization, the store offers a monogramming section.

A month later, on Nov.3, the store popped up on 76th Street and 2nd Avenue in New York City—the Upper East Side is also home to a Pottery Barn Kids. With 1,500 square feet to showcase the merchandise, Threads is bound to make an impression in the neighborhood. However, items like a wool coat with a velveteen collar and a christening dress, retailing at $88 and $128 respectively, are for well-endowed wallets. Most items run in the $30 to $60 range.

Clearly, Threads caters to a parent who believes that style starts very early in life. “There is a very different mentality of couples who are having kids today,” said Craig Johnson, president of Customer Growth Partners, retail and consumer consulting firm. “Now, parents are professionals who have delayed having kids until they are older and much higher up on the income curb. They have a BMW and they don’t want to buy stuff for their kid clipping coupons. They want more top of the line, spare no expense [items].”

Although the Threads stores are a new concept, Potterybarnkids.com and Pottery Barn Kids have been offering a limited selection of the merchandise found in the stores. Based on comments sited in previously published reports, the two venues are referred to as laboratory stores.

Although a few stores in the infant category is not going to offset difficulties faced in the home goods department, retailers are thinking more broadly about non-linear growth opportunities, added Whitfield.

Pottery Barn Kids, declined to comment on the strategy behind the Threads brand.

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