July 18 (Bloomberg) -- As the world awaits news of the birth of the child of the Duke and Duchess of Cambridge, all eyes are on Amsterdam-based stroller manufacturer Bugaboo.
When the royal couple go out for a walk with their first child, due any day now, their choice of pram will be an implicit endorsement triggering a fanfare of publicity money can’t buy. And British press reports indicate the Duchess, formerly Kate Middleton, has already bought a Bugaboo.
“There is nothing bigger for a brand than a royal endorsement,” said Richard Cope, director of trends at market researcher Mintel in London.
The Daily Mail said April 27 that the Duchess bought a blue Bugaboo, a brand also used by stars such as Sienna Miller and Elton John. While the closely held company has “no indication” the royal baby will also be carried in one, it would be “delighted that a style icon such as Her Royal Highness has chosen Bugaboo for her first child,” spokesman Max Dundas said.
Wal-Mart Stores Inc.’s Asda supermarket chain reported a 57 percent rise in sales of woven-straw baby bassinets after the Duchess was pictured with one from an upmarket boutique. Yet the biggest beneficiary of the royal birth is likely to be the maker of the baby’s pram or pushchair, according to Chris Hirst, chief executive officer at advertising agency Grey London.
By picking Bugaboo, whose Cameleon model sells for 799 pounds ($1,212) on the company’s U.K. website, the royal household could offend loyalists who want her to buy British, cautions Graham Hales, CEO of Interbrand London.
“The royal family understands its role in representing Great Britain, especially in a challenging economy,” Hales said. “British businesses are looking for support.”
MacLaren, a closely held U.K. company that has made prams for almost half a century, needs an image boost. The company four years ago recalled strollers in the U.S. after they had reports of severed fingertips of at least a dozen children over the previous decade. To capture some of the glow of the impending birth, MacLaren is now offering a $360 Royal Baby Techno XT Style Set, a stroller tricked out with British symbols such as the Union Jack.
U.K. sales of prams and strollers will rise 13 percent to 288 million pounds in the 12 months from July 1 as new parents look to follow the choice of the royal couple, according to the Centre for Retail Research. Gains are also expected for makers of the baby’s clothes, crib and toys, according to the group, which estimates that the birth will add 243 million pounds to U.K. retail sales in the nine weeks ended Aug. 31.
The Duchess’s choices have already boosted some companies. When she wore a Reiss dress to meet President Barack Obama in 2011, the retailer’s website crashed for two-and-a-half hours because of high demand. In the U.S. the dress sold out before stores opened as customers bought it over the phone. Reiss sales rose 5.2 percent to 100 million pounds that fiscal year.
“We have noticed a significant increase in terms of brand interest and awareness” since the Duchess wore the Reiss dress, spokeswoman Helena Choudhury said.
Celebrities using products doesn’t always help the bottom line, according to Richard Jaffe, a retail analyst at Stifel Financial Corp. Michelle Obama’s October 2008 appearance on “The Tonight Show With Jay Leno” in a yellow J. Crew Group Inc. sweater wasn’t enough to prevent the retailer cutting its profit forecast a month later. And Reiss’s pretax profit in the year ended Jan. 31, 2012 fell 18 percent to 3.02 million pounds.
“Granted, the child will not go naked and there will be a flurry of articles dissecting what it is wearing,” Jaffe said. “But overall, the influence of celebrity babies on sales is mostly hype.”
That hasn’t stopped companies from trying to ride the tide of public goodwill. Mothercare Plc, the U.K.’s biggest independent retailer of baby products, is offering a collection featuring “Prince” and “Princess” logos on bibs and romper suits costing 4 pounds to 6 pounds. The Watford, England-based company could use a boost after today reporting a 0.9 percent drop in first-quarter U.K. same-store sales that sent its shares down as much as 8.5 percent.
The royal family is no stranger to product endorsement. It has a near two-century-old tradition of offering warrants -- basically a letter of recommendation -- to companies that have supplied family members with goods or services for at least five years. Prince Charles himself founded a company that sells British-made food.
Even without a warrant, makers of goods seen in early pictures of the baby will benefit since the images are sure to get massive play in news outlets worldwide, according to Marilyn Braun, a royal watcher who has been blogging about the family since 2005.
“Just the fact that Kate is using a certain product is enough to increase sales,” Braun said, “much like everything else Kate buys or wears.”
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