Should You Get Designer Gifts For Your Kids?

— -- This report originally aired on Nov. 18, 2006.

We all want what's best for our kids. But I thought that meant the best care and the best education, not the trendiest clothes.

The kiddie clothing business is booming. The fashion industry has discovered that some parents will pay a lot for kids' clothes, so now Versace, Dolce & Gabbana, Burberry, and other high-priced designers are funding fashion shows -- complete with 5-year old models gliding down runways in miniskirts and knee-high fur boots. The designers arrange these shows hoping that children's clothing stores will carry their high-end fashions for kids.

I find it hard to believe that parents will pay $125 for kiddie boots and $100 for tiny miniskirts. But I'm a guy -- what do I know?

I stopped by Z'Baby, a popular store in New York City to see what designer kids clothes go for. Store owner Sharone Glaser stocks jeans that sell for $300. They even look frayed, but Glaser says that makes them "more cool."

I thought parents would buy less expensive clothes for their kids, since children outgrow their clothes so quickly. But Glaser's customers don't seem to mind the high prices.

One mom, who bought her daughter a $340 coat, said she wants her daughter's clothing to make an impression. "She's my little princess doll ... We're dressing her so that when we take her out, adults look at her and say, 'Wow.'"

But when we brought some cheaper $30 sweaters and dresses to Z'Baby, we found that half of the customers couldn't tell the difference between them and the Z'Baby clothing, which cost almost three times as much.

Shoppers might not be able to see any difference in the store, but Glaser claims her expensive clothes are more durable.

"They last longer. The quality is better. It doesn't fade," she said.

Glaser said we'd see the difference in quality after a few washes.

Se we washed her expensive stuff along with cheaper clothing from the Gap, Gymboree, and Old Navy. After five washes, it all looked the same. When we washed it 10 times, some of the clothing faded, but price was no guide -- the Gymboree stuff did well, and the stitching on even the cheapest clothing held up through 20 washes.

In fairness, Glaser's expensive clothes held their color very well. It's the reason she buys $400 raincoats for her kids.

Isn't there something gross about spending so much money on clothes kids will outgrow so quickly, I asked her?

"No, because you know what? I think that it's gross when the parent doesn't value the child," she said.

Buying a $400 raincoat is how we value kids? Please tell me it's not true.

I then went to a clothing show where kids were modeling Madonna's line of children's clothing. The pop star's shirts were double and triple the price of similar clothing at the Gap or Target.

I asked a group of kids at the show if they thought the clothes were better. "They're much more comfortable and they look more stylish," one girl told me.

But couldn't you go to J.C. Penney and get stuff that's comfortable and bright, I asked.

"No, not really," several girls answered.

The kids couldn't say enough good things about the expensive clothes. One said, "It's strange how something as little as clothing can make you feel so confident in yourself."

Why would clothing do that?

"Because if you look pretty you feel good about yourself," she said.

But do you have to spend hundreds of dollars to feel good about yourself?

I asked another girl why she loved the expensive clothes:

"Because they're popular," she explained.

And what does popular mean?

"It means when ... another person's wearing ugly clothes, they have to wear pretty clothes and they can hang out with the people," she said.

So today's message from the designer clothing business? Buy $120 outfits and you'll get to hang out with "the other people."