Lincoln International’s sector specialist shares trends for the juvenile sector after attending Kind+Jugend 2025.

1

While brick and mortar retail faces further pressure and online marketplaces gain market share, the most attractive and future-ready approach seems to be a successful and digitized omnichannel strategy.

AI is still underpenetrated in retail formats, with less than 30% usage among global retailers; however, retail partners see significant opportunity in omnichannel retailers using predictive AI to manage inventory and assortment strategy, tailor the timing of markdowns and creating a dynamic pricing strategy, thus driving profitability and overall cash flow. In addition, omnichannel retailers can provide insightful data to branded juvenile players to monitor their product assortment and innovation strategy steering sales towards clearly sought after products by end customers.

2

While consumers remain price conscious in an overall inflationary environment, 24% of consumers in the biggest European countries were willing to spend more on baby supplies at end of 2024, according to McKinsey. While Asian marketplaces like Temu and Shein continue to grow significantly and offer cost-conscious products, end customers have realized the threats of non-compliant products entering the market. Well-known and experienced brands gain trust and market share by having clear communication and a go-to-market strategy, as they usually service regulatory and compliance needs and help customers in product selection.

3

The concept of secondhand fashion is already established among customers and is experiencing double-digit growth, with a significant online penetration in European markets like UK, France, Poland and Germany. Women statistically show a stronger participation and adoption of secondhand fashion. As mothers are key decision-makers for buying baby products, the baby and juvenile market have followed a similar growth path. In addition, branded wearable products are increasingly sought after by consumers, and increasingly common juvenile clothing rentals offer customers access to desired products paired with attractive cost savings.

4

Current market challenges support an ongoing wave of industry consolidation, both in the online / retail segment (e.g. baby walz and babymarkt) and on the supplier side (e.g.m bugaboo and joolz).

The premium segment has seen more concentration in recent years, with platforms emerging and covering different product lines with distinct and well-known brands under one roof. Reasons to consolidate include saving on product cost and marketing spend. Another driver is the extension of customer lifetime value, as well-known market players in the baby segment try to route customers to an extended journey under their roof via new kids products (e.g. school supplies, kids shoes).

Mass market and mainstream segments are still highly fragmented, with many family-owned companies driving future M&A through succession plans.

5

Comfort and functionality have become key pillars for young parents. Motor-driven strollers and easy-to-use car seats, as well as other light and functional travel gear, support overall wellbeing and quality time for a young family on-the-go. Research-backed products are also favored to support child and family wellbeing, including light and sound products, low-impact mattresses and technology-enhanced sleep protection.For private equity investors, sponsor platforms and lenders, private label manufacturing offers a unique opportunity for growth. Forward-thinking companies that integrate capital investments with operational expertise can unlock significant value in this rapidly evolving sector.