Tickle Down Economics

We wonder if Brad DeLong approves of this stimulus to the economy:

Neiman Marcus Group's Bergdorf Goodman in Manhattan recently expanded its children's wear department by a third to devote more space to Gucci and the new lines like Oscar de la Renta. For fall, the prices range from $4 for hair bows to $5,200 for an exclusive Christian Dior silk party dress handmade in France.

"We're definitely growing," says Andrew Mandell, Bergdorf Goodman's vice president and divisional merchandise manager of home and children's wear.

"This is a whole new realm. And when you have our customers so fashion forward, they eat this up."

Colleen Sherin, fashion director at Saks Fifth Avenue, says both parents and grandparents are willing to spend on "unique, special" fashion items. "They're just not looking for basics."

The bigger trend, however, is designers creating free-standing shops devoted to kids, says Faith Hope Consolo, who leads retail leasing and marketing at Prudential Douglas Elliman.

Following in the footsteps of Gucci, Italian fashion house Giorgio Armani will be opening this fall its first U.S. store devoted to children in Manhattan's Upper East Side. Armani launched its children's business in the U.S. in 2009.The Armani store, which targets newborns to teenagers, will feature items priced from $50 to $500, says Armani spokesman Christian Langbein.

Some parents who are splurging say they also mix in shopping trips to Gap or other less-expensive stores, but see the designer duds as a confidence booster.
"I really believe when she dresses like this, she feels better about herself," added New Yorker Dara] Sandler, who shops for pricey children's clothes at Barneys New York as well as a New York women's clothing store called Edit, which now has a designer children's wear section.