Baby Steps

Update On An Ever-Changing Category

Baby StepsWhile regulations are making children's apparel safer, there are still plenty of challenges in the marketplace. Here's an update on the ever-changing category.

The numbers are in and distributors should take note. In Washington state's latest toxic chemical report, released in May by the Washington Toxics Coalition (WTC), some of the country's biggest retailers (think Gap and Walmart) revealed concerning stats. The retailers – which are required by state legislation to self-report – disclosed that more than 5,000 different children's products, including apparel, currently contain potentially toxic chemicals.

One would think, in the years since the Consumer Product Safety Improvement Act (CPSIA) was passed, that children's apparel had gotten a little safer. In many cases, experts believe it has. Yet, this latest evidence makes it clear that distributors still need to be vigilant when selling children's wearables.

A National Issue
Why so much fuss about Washington? Simple, says Nancy Uding, the grants and research specialist for WTC, a public health and environmental protection organization, based in Seattle. "The magnitude of this number is taking us by surprise," she says, and it's reflective of what's happening nationwide. That toxic chemicals are still heavily used in manufacturing wasn't surprising to experts. That they were showing up in so many youth apparel items was.

Reports like those required by Washington state's Children's Safe Products Act of 2008, the first of its kind, are at least helping companies and consumers become more educated and more proactive about buying the right apparel. But staying on top of the latest regulations, many of which were enacted under the federal government's CPSIA, also passed in 2008, can be time-consuming.

"I would say I dedicate at least an hour every week to make sure there aren't new laws coming along," says Gregg Emmer, vice president and chief marketing officer for Counselor Top 40 firm Kaeser & Blair Inc. (asi/238600), a distributor based in Batavia, OH. "We might go five or six months without anything coming up, but then new regulations pop up and you have to be on top of it."

And with more regulations coming out every year – involving everything from forbidden dyes to hazardous drawstrings – knowing if the youth apparel you're pitching is safe can be a real challenge. For example, as of February of 2013, the federal government requires periodic testing on children's products, even for those that were initially tested and found to be safe. For every change made to an item – be it design, manufacturing process or sourcing – new testing must be conducted by a Consumer Product Safety Commission-approved third-party laboratory. And that's just for testing at the federal level.

Next to Act
This year alone, lawmakers in 26 states are expected to debate legislation on defining and acting on toxic chemicals. Potential changes could alter or restrict current manufacturing processes and labeling standards, according to SaferStates, a network of environmental health organizations around the country.

Keeping up with each law can be daunting. For that reason, Emmer says, his company has taken drastic steps. For example, in recent years Kaeser & Blair has chosen not to promote youth apparel in its annual catalog, mostly because it's impossible to predict what will be deemed unsafe next. The liability is a concern, certainly, but so are the ever-changing regulations, says Emmer. And scrambling to recreate products to satisfy both market demand and product regulations can be more than a distributor wants to – or should – take on.

There are simply too many variables, Emmer insists. Sell an item meant for a 12-year-old and, to cover your liability concerns, "you have to assume there might be a child three years old in the same household," he says. "So you really have to meet the requirements for a three-year-old. It's a moving target." Take hooded sweatshirts – a seemingly innocuous garment with a potentially lethal drawstring at the neck. Suddenly "you can't have it," Emmer says. "It's a choking hazard." In the next breath he asks, "How do you make a hoodie without a drawstring? I don't know that anyone's tried."

More to the point, Emmer says, it's not a productive use of his company's time, since marketing to children through promotional products "is a miniscule part of this industry's" efforts. Even so, Emmer says, his company does upward of $25 million a year in apparel products, a significant portion of that dedicated to youth apparel.

Staying Ahead of the Curve
For distributors with a strong apparel business, what are they to do? Product safety websites from states like California, Maine and Washington, where the WSCSPA lists 66 dangerous chemicals, are good resources for distributors to determine what's allowed in the wearables they're selling. But there are also key rules distributors can keep in mind on a daily basis regardless of where their products end up.

"Legally speaking, the law only applies to products marketed specifically to children," 12 and under, says Caroline Cox, research director for the Center for Environmental Health, a toxic chemical watchdog group based in Oakland, CA. Cox is referring to CPSC requirements, but she points out, particularly for promotional product distributors, apparel safety can get complicated when a garment deemed safe for a 10-year-old ends up in the hands of her two-year-old brother.

Regulations surrounding "youth apparel," while the term applies to garments manufactured for and marketed to children 12 and under, can get more stringent for kids under three. Products intended for children are now required to undergo third-party testing and have a General Certificate of Conformity (GCC), showing they're compliant, something the industry has embraced wholeheartedly in recent years – but not without a financial hit.

Testing for toxins can run upward of $200 a test, says Lenny Polakoff, executive vice president of client services for Zag Toys and Zagwear (asi/365552), a distributor based in Orangeburg, NY. That can profoundly affect business. Testing costs for "a one-color job versus a seven-color job is a huge difference," Polakoff says. Produce a 5,000-shirt order and those costs aren't so daunting. But, with a 50-piece order, suddenly the project becomes unprofitable – or, at best, a loss leader.

Room to Grow
Think youth apparel is a market to avoid? Some distributors would agree. Still, others say they're seeing steady sales and growth opportunities despite the hazards and testing costs that come with selling such regulated products. To put his mind at ease, Grant Peters, owner of Proforma RGP Creative (asi/300094), based in St. Louis, limits the suppliers he works with when it comes to youth apparel. One of his biggest clients is in health care, and orders infant wearables regularly.

It's imperative, of course, that the products are safe, Peters says. For that regular health-care client, who places frequent orders for infant onesies that are handed out as part of an outreach program for low-income expectant mothers, Peters uses Rabbit Skin apparel and "eco-friendly ink," he says. He won't pass along anything that's not CPSC certified, which can be tricky for orders placed from different states. "Before a new company places an order they will get preproduction samples from us, and then they're submitted for state approval," he says.

Since distributors will most likely not be coordinating product testing for many of the items they sell, it's key to ask suppliers for safety certifications or product labeling that shows that garments are CPSC-approved.

With that level of proof, many distributors say they're still quite comfortable selling into a marketplace that offers plenty of sales opportunities. "Youth apparel for us goes in waves," Polakoff says. Although he worries the industry is moving away from youth wearables as a whole, because of concerns over production safety and social responsibility issues, he adds that Zagwear still sees plenty of sales in the category.

Working with giants like General Mills and Nestlé, Polakoff says, his business can still be robust in wearables for kids. Landing orders in companies that large, however, means jumping through more certification hoops. In fact, those corporate behemoths are coming to the table demanding apparel safety and proof that their wearables are harmless to any child, regardless of age.

Of course, no product can guarantee its safety for life, as Emmer indicated. But cutting off potential sales for fear of injury by T-shirt is too fearful an approach to take, say even the most cautious distributors. "I'm not concerned about products today being compliant 12 months from now," Polakoff says.

– E-Mail: betsycummings23@gmail.com

Selling Youth Apparel

Want to target the youth marketplace? Starting small is likely the best approach – but that doesn't just mean a nearby high school or booster club. Opportunities for selling promotional children's apparel are more prevalent than you might think.

"Start at the local level," suggests Lenny Polakoff, executive vice president of client services for Zag Toys and Zagwear (asi/365552). Schools, booster clubs, "your local ice cream or yogurt shop, any business that has a child audience to some degree," are ideal targets for newcomers to the youth apparel marketplace, he says. "Nobody's walking into McDonald's and selling them youth apparel, or selling them anything right out of the gate. It takes a very, very long time to get into that business."

But there is plenty of apparel business to be had locally. When targeting today's apparel buyer, many are looking for less expensive items, particularly when it comes to ad specialties for children, according to Grant Peters, owner of Proforma RGP Creative (asi/300094). "A lot of them are not going to buy a $3 item," he says. "They're going to buy something that's in the $1 to $2 range, so they can give out more of them and reach more people."

Keeping Kids Safe

Opportunities for selling youth apparel in the promotional product marketplace may abound in more places than you realize – even in local restaurants and ice cream shops. But before you can cash in through this category, you need to be aware of the latest safety regulations. Here's a guide.

  • Define It: It's likely obvious that a garment is for kids only, but it's important that distributors make sure the products they're selling are deemed youth apparel and certified as safe – either with labeling or certificates that pass CPSC standards.
  • Stay On Top: Selling youth apparel nationwide could certainly expand your market share and boost your bottom line. But remember to follow the regulations of the state into which those items are being sold. Certain states like Washington, Maine and California have aggressively tackled safety with greater manufacturing scrutiny. Websites like SaferStates (www.saferstates.com) and the home page of the Consumer Product Safety Commission (www.cpsc.gov) can provide links to a wealth of information on banned substances and state actions.
  • Know Your Suppliers: One of the best ways to ensure your products are safe is to work with suppliers who make youth apparel safety their top priority. Ask for testing certificates, and use suppliers trusted by other large-scale distributors within the industry.