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Lululemon Pivots on Girls, Target Boosts Baby Business

The children’s market is proving challenging for Lululemon while Target has great expectations.

Lululemon is pulling back on its children’s wear label, Ivivva.

In its Q1 press release, the activewear brand announced it would shift Ivivva operations online. As a result, it will close 40 of its 55 locations and convert about half of the remaining stores into Lululemon stores. As a part of the pivot, the company will also close Ivivva showrooms and temporary locations, and it looks like cuts in personnel are coming too, as it says it will “streamline its corporate infrastructure.”

Lululemon plans to wrap up these changes by the end of Q3, and it anticipates the restructuring will result in $17.7 million in pre-tax costs in Q1.

Lululemon’s CEO Laurent Potdevin says he believes the changes “are the best means to optimize this part of the business.”

Overall, the company saw a 2 percent decrease in comp store sales and flat direct to consumer revenue. Income was down by 21 percent to $45.4 million while gross profit was up by 7 percent to $256.9 million.

In other kids’ news, Target has debuted Cloud Island, its latest private label collection.

The 500-piece baby brand spans everything from juvenile products and bedding to layette and décor options. New parents won’t want for selection, as the line teems with 70 different prints in layette and 14 in bath, spanning everything from hipster to sweet aesthetics. The line is designed for gift-giving with coordinating patterns made to mix and match to create personalized bundles to celebrate the new bundle on the way.

“Target has seen incredible strength in our Kids business with the launch of Pillowfort and Cat & Jack, and we’ve heard from guests that they’re also looking for stylish and affordable options for babies and younger children,” said Mark Tritton, Target’s executive vice president and chief merchandising officer.

In the company’s Q1 earnings call, the retailer attributed part of its success in children’s last year to Cat & Jack. Target revealed that spending in the children’s apparel department increased by 50 percent after the Cat & Jack launch, driving sales beyond the new private label launch.

Because safety is top of mind for new parents, the collection features tags with safety reminders and some pieces tout certifications like OEKO-Tex.