H&O signs franchise deal with Carter's
Israeli chain to market US baby clothing giant's products in Israel, promises to maintain low prices
Carter's is an extremely popular brand in the United States and is known for its superb quality, design and affordable prices. The company was founded in 1865 when founder William Carter decided to manufacture baby mittens from leftover wool. By the end of the 19th century the company was producing underwear for men, women and babies. It later went on to focus on baby apparel.
Carter's has a $1.6 billion annual revenue stream and manufactures some 350 million items a year. It markets its US products in such department stores as Walmart, Target and Macy's as well as in 500 independent stores across the country. It also offers clothing online. Outside the US, its products are sold in some 700 stores in 38 countries.
High hopes
Israel's baby clothing market generates some NIS 600 million (roughly $165 million) a year with Shilav and Fox Baby being the biggest labels. H&O hopes to take over 20% of the market in the long run.
"Our biggest competitors are Shilav and Fox Baby but Carter's offers a unique combination of quality, design and affordability that does not exist anywhere in Israel," Nitzan Hadas, H&O CEO said. Hadas promised that the company will maintain the US pricing level in Israel.
Carter's also offers a line of franchises in a large variety of products such as baby socks and shoes, hats, books, prams and even pacifiers. It has allowed Israel to hold independent negotiations with the franchise holders and buy from them directly or manufacture in Carter's factories in the Far East in exchange for royalties.
"We're already negotiating with the franchise holders of the fur toys, blankets, hats and aprons," Hadas said. "We have signed a franchise agreement to manufacture underwear in China."
H&O is slated to invest NIS 1.2 million ($330,000) in its Carter's stores in Israel.
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