Childrenswear in Israel

2020 IMPACT

Home seclusion trend and rising price sensitivity reduce demand for childrenswear in 2020

Childrenswear experienced notable declines in 2020 on a par with both womenswear and menswear as a result of the pandemic-induced lockdowns and restrictions on movement outside of the home, in addition to store closures. Increasing price sensitivity and limited time outdoors therefore reduced demand for childrenswear, despite the fact that many Israeli parents are more likely to forgo purchases for themselves and spend on their children instead, although there is also likely to have been some level of handing down apparel from older siblings to save money, a tradition that was increasingly waning over the review period.

School closures and restrictions on socialising over holiday seasons are other negative factors

The declines noted by childrenswear were not only driven by physical store closures as demand saw a greater shift online, but also because schools and other educational frameworks were closed, resulting in most children being forced to stay at home. In addition, during the holiday seasons of April for Passover, and September for Rosh Hashanah, lockdowns and social distancing measures restricted movement; traditionally, these important holiday seasons tend to encourage many parents to purchase new childrenswear for dinners and family gatherings which were forbidden throughout much of 2020.

Fox retains convincing leadership in 2020 but smaller players gain further share

Fox Wizel Ltd retained its overall leadership of childrenswear in 2020 as the only player to hold double-digit value share, placing it at some distance from its nearest competitors Castro Model, Shilav Group and Golf & Co Group. The player offers a wide range of popular brands including The Children's Place, Fox Kids, Fox Baby, American Eagle Outfitters, and Mango.

RECOVERY AND OPPORTUNITIES

Category’s future trajectory linked to population growth but will struggle to fully recover over the forecast period

While childrenswear is predicted to see an upturn in demand from 2021, with growth rates gaining stronger momentum over the course of the forecast period, the significant decline experienced by the category in 2020 and lingering price sensitivity means that it will struggle to fully recover and return to pre-pandemic levels in both volume and value terms (at constant 2020 prices) by 2025. The category’s overall trajectory will very much be linked to overall population growth and whether Israelis feel financially stable enough to start a family or have additional children.

E-commerce likely to gain further growth momentum offering convenience and competitive prices

E-commerce is expected to continue to grow in popularity as a major distribution channel over the forecast period, since the prices in the local market are quite expensive compared to other countries and most toddlers and children do not require specific needs compared to adults such as fitting different body shapes. Adults many hesitate to order apparel due to concerns of ordering the wrong size or receiving an item that does not look as they expected, while these concerns tend to be less significant when ordering childrenswear as sizes are similar on a global level.

Children likely to influence purchasing decisions at increasingly young age

The trend for celebrity endorsement of fashion is seen internationally, and was gaining traction within childrenswear in Israel towards the end of the review period. This shift has partially stemmed from growing independence from a younger age, as children have access to the internet and smartphones, and are therefore exposed to the available trends.