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How is the com­pany per­form­ing here?

China Daily (Hong Kong) - - Q&A WITH CEO -

Michael Casey knows all about brands that are time­less. Af­ter all, he works for one.

The chair­man and CEO of Carter’s Inc re­flected on the iconic chil­dren- and baby­wear la­bels, and stressed it was all about soft­ness.

“Our clothes wash well year af­ter year af­ter year,” Casey said dur­ing a trip to Bei­jing. “We’ve had let­ters, say­ing how sweaters have been handed down from gen­er­a­tion to gen­er­a­tion.

“We had one, say­ing a pink sweater had been worn by grand­mother, mother, daugh­ter and grand­child when they were tod­dlers. It had been handed down for 40 years,” he added.

Tra­di­tion is ev­ery­thing for Casey, who popped over to the Chi­nese cap­i­tal to visit a newly opened store.

It was a long way to come from the com­pany’s head­quar­ters in the United States city of At­lanta in Ge­or­gia. But then, Carter’s has been do­ing busi­ness in China for more than 20 years.

“A good por­tion of our prod­ucts are sourced here, par­tic­u­lar baby ap­parel, which is man­u­fac­tured in China,” Casey said.

Founded in 1865, Carter’s has be­come a truly in­ter­na­tional busi­ness. In the US, the com­pany has more than 18,000 re­tail lo­ca­tions, in­clud­ing 1,000 di­rectly owned stores.

Over­seas, it has 800 re­tail shops in 60 in­ter­na­tional mar­kets. In China, it has nine stores and plans to open more than 40 in the near fu­ture.

In­deed, ex­pan­sion has paid off for the chil­dren’s cloth­ing com­pany.

Data re­leased by Carter’s showed first quar­ter net sales were $733 mil­lion, a 1 per­cent in­crease com­pared to the same pe­riod last year, ac­cord­ing to the group’s cor­po­rate web­site.

“As for China, we have been happy with our per­for­mance,” Casey said.

In a far-reach­ing in­ter­view with China Daily, he talked about the com­pany’s on­line strat­egy here, choos­ing the right lo­ca­tions and the OshKosh B’Gosh brand.

What is Carter’s pres­ence in China?

We have a his­tory of do­ing busi­ness here, mostly from our US web­site, which was launched in 2010. We saw strong de­mand af­ter launch­ing on Tmall (the on­line shop­ping cen­ter owned by Alibaba Group Hold­ing Ltd) in 2015, and it has been very suc­cess­ful. Now, we’re start­ing to open up stores in the coun­try.

Well, its early days, but we are very happy with the per­for­mance. Last year was our first full 12 months on Tmall with the Carter’s brand. We re­cently re­ceived a spe­cial recog­ni­tion award by Tmall for be­ing one of the most pop­u­lar la­bels in chil­dren’s ap­parel.

We have also opened a new chapter with Pou Sheng In­ter­na­tional (Holdings) Ltd, our strate­gic part­ner. We opened nine Carter’s stores in the fourth quar­ter of 2016 and our plan is to have at least 40 more in the fu­ture.

2008 on­wards: Chief ex­ec­u­tive of­fi­cer, Carter’s Inc

2003: Ex­ec­u­tive vi­cepres­i­dent and chief fi­nan­cial of­fi­cer, Carter’s

1993: Joined Carter’s as vice-pres­i­dent of Fi­nance

1982-93: Price Water­house LLP, a pre­de­ces­sor to PwC

Since you are plan­ning to open more out­lets here, what does the fu­ture hold for Carter’s in China?

We be­lieve this will be at least a $100 mil­lion op­portu- nity dur­ing the next five years. We’re not try­ing to go fast, we’re try­ing to do it well and make sure we un­der­stand what is im­por­tant to our Chi­nese cus­tomers.

There is no short­age of ex­am­ples of com­pa­nies that rushed into China and failed.

Many were very large, suc­cess­ful com­pa­nies. We have done our home­work, we have found good part­ners with Alibaba and Pao Sheng. We will look to them for guid­ance when it comes to Chi­nese con­sumers.

So, China could be the largest mar­ket for you out­side of the United States?

Well, out­side of North Amer­ica. We have a very suc­cess­ful busi­ness in Canada. The two largest mar­kets of growth for Carter’s dur­ing the next five years are Canada and China.

How do you choose lo­ca­tions here?

Right now, the fo­cus is on first-tier and sec­ond-tier cit-

In China, the chil­dren’s ap­parel mar­ket is highly frag­mented. Bal­a­bala is the largest with 3 per­cent of the mar­ket share. But to be fair, the brand is not a baby and tod­dler ap­parel la­bel as it’s geared to­ward older chil­dren.

What we saw in terms of de­mand from here, or on our US web­site, is that China is the No 1 mar­ket out­side of the United States. We were able to see what con­sumers were re­spond­ing to and their fa­vorite was baby ap­parel. So, we try to un­der­stand where the mar­ket is and adapt to that.

You have mul­ti­ple brands un­der the Carter’s Inc um­brella. Will you bring over more la­bels to China?

Yes, I hope so. OshKosh B’Gosh is our other ma­jor la­bel, which has been around for nearly 125 years, and fo­cuses on the tod­dler seg­ment. Carter’s is in baby ap­parel, so it’s nice to have these two com-

The key was find­ing the right lo­ca­tions for our stores here. You need to have the right re­tail cen­ter — the right space. Those are the two most chal­leng­ing things and the most im­por­tant.

Carter’s has ac­quired Skip Hop, a broad brand which sells strollers to bath toys. How will you sell the la­bel here?

We are al­ready do­ing busi­ness on Tmall. Our next fo­cus is how we could cre­ate “an ex­pe­ri­ence” within the store for cus­tomers.

We are work­ing with our Skip Hop part­ners to de­cide how we re­late that spe­cial ex­pe­ri­ence with the brand.

On­line

PRO­VIDED TO CHINA DAILY

Michael Casey, chair­man and CEO of Carter’s Inc.

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