The following research report contains market research, analysis, statistics and business intelligence relating to research on Children's Wear Industry In Germany.

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ABSTRACT
In 2000, sales of clothing in Germany totaled U.S. $10.24 billion (DM 21.5 billion) of which the children's wear segment made-up U.S. $ 3.14 billion (DM 6.51 billion). Children's apparel in Germany is broken into four sectors: Baby-wear for children from birth to 1.5 years, toddler-wear from 1.5 to 6 years, school-wear from 6-12 years, and teenage clothing from 12 years onward. This report covers all age groups for children's underwear, outerwear, and sportswear, but does not include shoes. Children's clothing accounted for 30% of total clothing sales in Germany. German exports of clothing totaled U.S. $3.5 billion (DM 7.3 billion), of which children's clothing accounted for $770 million. According to BBI (the German Association of Clothing Manufacturers), 97 percent of children's clothing was exported to European countries, with less than 3% to the United States. Total clothing imports equaled $6.3 billion (DM 13.3 billion). Main import sources were China, Turkey, Poland, Italy, and Romania. Imports from the United States accounted for less than 5% of total clothing imports with children's clothing accounting for less than 3%. Most U.S. brand names and labels, which are sold in Germany, are manufactured outside of the United States and thus do not count as U.S. exports to Germany. U.S. exporters do not play a significant role in this industry.

A.Market Highlights and Best Prospects

-Market Trends

A wide variety of styles of children's apparel are offered in Germany, with several positive trends favorable to U.S. exporters. General sportswear primarily sells well with 4 to 12 year-olds, especially sweatshirts with American logos; symbols in red, white, and blue; or sportswear displaying movie-themes or highly identifiable character lines.

Additionally, sportswear identified with in-line skating is gaining popularity. Germans from 8 to 18 are increasingly fascinated with the sport and the styles associated with it. Clothing with sport themes, particularly American sports, is also popular with this age group attracted by American fashion.

Finally, the German desire for environmentally sound living increasingly strengthens the demand for eco-labeled clothing. Environmental aspects are often key purchasing factors. German industry representatives have announced plans to buy and sell eco-friendly labels whenever possible.

Overall, the potential for expansion into the children's clothing market is weak. Industry analysts feel the market will slow. A market decrease is expected in the 4th quarter of 2001 and into 2002, as consumers are hesitant to purchase because of the introduction of the Euro.

The children's clothing market in Germany supports a wide variety of mid-range priced goods of substantial quality.
Most U.S. exporters of American-labels are not competitive in this price range. American labels, which are competitive, are not actually manufactured in the United States and are not considered to be American imports when they arrive in Germany.

-Statistical Data

Table 1: The German Children's Clothing Market (DM billion)

1999 2000 2001 (est.)
Imports 6.29 6.64 6.62
Local Production 1.52 1.49 1.46
Exports 1.60 1.62 1.64
Total Market 6.21 6.51 6.44
Imports from U.S. 0.18 0.19 0.19

Table 2: The German Children's Clothing Market ($ billion)

1999 2000 2001 (est.)
Imports 3.40 3.20 3.05
Local Production 0.82 0.71 0.67
Exports 0.86 0.77 0.76
Total Market 3.36 3.10 2.97
Imports from U.S. 0.10 0.09 0.09

Table 3: Exchange Rate

1999 2000 2001
1$ = 1.85DM 1$ = 2.10DM 1$ = 2.17DM

(Data for 2001 are placed in text, not tables, as they are estimates only. Note that all calculations are based on domestic currency.)

-Market Share

The most recent and reliable figures concerning market share by nationality are from 1999.

1999 IMPORT MARKET SHARE for clothing (percentage for USA and major competitors): China 19%, Turkey 16%, Poland 15%, Italy 12%, Romania 11%, Hong Kong 7%, Tunisia 6%, India 5%, Czech Republic 4%, and Hungary 4%, for a total of 95%. U.S.: 2.8%.

1999 IMPORT MARKET SHARE for children's clothing (percentage for USA and major competitors): less than 3%.

As shown by these figures, exports from the United States do not play a significant role in the children's clothing market in Germany. Most of the U.S. brand names and labels sold here are produced outside the United States and do not count as American exports to Germany.

B. End User Analysis

Despite economic volatility and resulting unemployment, buyers of children's wear still consider brand names and designs major buying factors more so than in other apparel sectors. Parents who choose what their children will wear are price-conscious, but are looking for high quality materials. Additionally, during the last decade there has been an enormous change within consumer practices.

In the past, parents chose their children's clothes until they reached 14-15 years. Today, even six year-old children choose their clothing themselves or strongly influence purchasing decisions. This emancipation of young people in Germany has made the market more fashion-oriented, because young people are especially interested in wearing the latest styles. Similar to the United States, young people in Germany become interested in specific brand names at school, through their circle of friends, and through television.

Sports labels have an almost cult-like status since older children like the look and feel of modern high-tech materials. The most popular names are Adidas, Puma, Nike, Levi's, and Wrangler. Jeans labels are also a major purchasing factor with children of all ages. Thirty-seven percent of 6-9 year-olds purchase their jeans on label alone, with 62% of 10-13 year-olds, and 78% of 14-17 year-olds choosing their jeans based solely on the label. The Levi and Wrangler labels continue to dominate the jeans market.
C. Market Access

American exporters of children's clothing do not face quotas, but shipments must be accompanied by a Certificate of Origin obtainable through a local U.S. Chamber of Commerce.

Recently, German Customs officials have declared they will no longer accept imports from the United States shipped with Certificates of Origin containing disclaimers. (This is due in part, to the increased occurrence of imports being manufactured in third-world countries, whose American parent companies then attempt to export them as made in the U.S. American Chambers of Commerce were requested to answer for certifying the exports as made in America, and responded by adding disclaimers to the Certificates of Origin.) U.S. companies should be certain that all exports are accompanied by certificates without disclaimers and that the issuing Chamber has fulfilled its responsibility in certifying the origin of the goods.

Exporters from outside the European Union do face high freight and handling costs in addition to import duties, whereas imports from within the European Union enter Germany duty-free. A 14% duty rate is charged on children's wear from the United States, and a 16% import turnover tax must be paid on the landed cost (value of shipment plus freight plus insurance C.I.F. plus duty), which is passed on to the end-user as a Value-Added Tax (Mehrwertsteuer). The same VAT rate also applies to domestic products.

Beginning January 1, 2002, Germany will completely surrender usage of its own currency and replace it with the Euro. Germany will be joined by Austria, Belgium, Finland, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain. Since January 2001, the Euro has been used for credit transactions, but will now be a true hard currency. Using the Euro will increase cost-efficiency for exporters by ending the need for multiple currency-exchange equations and multiple currency fluctuations. The Euro introduction will make pricing completely transparent in Euro countries and, thus make different pricing much more difficult. Some exporters may see more advantage and convenience in universal pricing.
Successful penetration of the German market depends on continuity of effort, regular participation in trade fairs, and the establishment of a sales office and warehousing. Personal business relationships (especially during start-up operations) and follow-up are important in Germany. Appointment of sale agents should be the first step. For appointing sales agents, commissions in this sector generally range between 7% and 16%, depending on merchandise price levels, sales volume, and customer base. Agents will help to ensure new products and brands are launched with aggressive advertising campaigns.

With a continued market presence, successful U.S. exporters will eventually have to establish warehousing, either in Germany or another EU country. A warehouse is necessary to meet short-term delivery requirements.

Also, buying cooperatives play an important role in the distribution of apparel. Large-volume buying results in price discounts, which are then passed on to the retail members.

U.S. exporters should quote C.I.F. prices for a German port of entry when making offers to German companies. U.S. products, however, cannot generally compete on price alone. Producers of brand name apparel should plan on substantial market penetration costs to achieve the identification required to produce high sales and margins. To secure a better foothold in the European market, U.S. exporters may also consider a joint venture or licensing agreement.

In May 2001, German clothing producers, importers, and distributors uniformly adopted a new, self-imposed regulation in children's apparel with hoods. Due to severe injuries and fatal accidents resulting from string-closures, the industry has decided to phase them out, with all back stock to be sold by June 2002. Hooded children's wear must now be made with alternative closures, such as Velcro, hook and eye, snaps, or buttons. If strings are used for decoration, they should be no longer than 8 centimeters. Although this is not a law, the policy should be perceived as a regulation since all domestic producers will adhere to it and consumer expectation and preference has changed because of it.

Also important for accessing the German market is the different size-system used in most of Europe:

Age Size
Up to 1 month 50
Up to 2 months 56
Up to 3 months 62
Up to 8 months 68
Up to 1 year 74
Up to 1.5 years 80
Up to 2 years 86
Up to 2.5 years 92
Up to 3 years 98
Up to 4 years 104
Up to 5 years 110
Up to 6 years 116
Up to 8 years 128
Up to 11 years 140
Up to 13 years 152
Up to 15 years 164

D. Trade Promotion Opportunities

Trade Fairs

Participation in international trade fairs in Germany is an excellent vehicle for entry into this highly competitive and sophisticated market. The following fairs represent strong opportunities for exposure to buyers from all over the world and serve as international meeting places for the industry.

Event Kind & Jugend
International fair for children's businesses

Site Cologne

Dates February 9-11, 2001
Feb., 2002 (date to be announced)
July 27-29, 2001
July, 2002 (date to be announced)

Organizer Messe- und Ausstellungs- Gesellschaft m.b.H.
KoelnMesse GmbH
Mr. Mueller
Messeplatz 1

D- 50679 Cologne
T: (011) (49) (221) 821-0
Fax: (011) (49) (221) 821-2574
http://www.koelnmesse.de
email: info@koelnmesse.de

Or, their U.S.- Representative:

German-American Chamber of Commerce, Inc.

40 West 57th Street, 31st Floor
New York, NY 10019-4092
T: (001) (212) 974-8830
Fax: (001) (212) 974-8867
e-mail: gaccny@compuserve.com
http://www.gaccny.com

Kind & Jugend Fair is a well-established trade fair and is considered the world leader in its sector.
Commercial Service Contact:
Birgit Hesse
U.S. Consulate General
Willi-Becker-Allee 10
D-40227 DŸsseldorf
Tel: (011)(49) 211-737767-70
Fax: (011)(49) 211-737767-67

DISCLAIMER
Information in this report relies on sources including Government Publications, Opinions of industry experts and other public sources. Infomat can accept no responsibility for the accuracy or completeness of such information or for loss or damage caused by any use thereof. All prices subject to change without notice.

$3500 USD
For the 2008 Edition

Published: 2006 August
Market: Childrens
Region: Germany
Industry: Apparel
Pages: 45
Delivery: 7-12 Business Days
SKU: infre0000288