Carter's Revolutionizes Children's Business; Unveils New Brand Theme -- Celebrating Imagination.

MORROW, GA--(BUSINESS WIRE)--November 2, 1998--The William Carter Company, the number-one brand for children's apparel from newborn through age six, is revolutionizing the children's business with the introduction of a major new brand theme, Celebrating Imagination.

Celebrating Imagination will strengthen the company's position as the favorite brand for young children for over 130 years by focusing on imagination and creativity. The theme will be the dominant feature of new children's apparel, packaging, and the creation of toys, accessories, room decor and other new products.

The new brand theme will be launched in New York beginning November 2, to all Carter's retailers. To demonstrate this dramatic concept, the company has created a prototype shop within a shop for department and specialty stores designed by the noted retail design group, Mansour Design. The new shops will showcase the company's full line of Celebrating Imagination products.

Highly innovative design is a key component of Celebrating Imagination. The company has licensed John Lennon's artwork titled Real Love for Children, created by Lennon to visually teach his son, Sean, to read. The drawings will be used in a new collection of apparel for newborn to six.

Carter's has intensely studied its brand over the past 18 months. It concluded that mothers, reflecting nostalgia for their own childhood, desire a simpler way for children to play in this fast-paced society. Parents also feel that celebrating fun and very special moments helps their child's growth while inspiring creativity. Key to this is a desire by parents to encourage imagination in their children. The research also shows that unstructured imaginative play contributes to children's language development and attention span.

"Carter's is no longer simply selling a brand, we are marketing a lifestyle, one based on imagination and creativity," said Fred Rowan, chairman and chief executive officer of Carter's. "We are a trusted brand with mothers and grandmothers and they value our long-standing commitment to the creative process."

"We will strengthen our remarkable emotional connection with consumers by offering them wonderful, creative children's apparel and a shopping experience that is imaginative and fun," he added. "Our customers are sophisticated individuals who know that a child's creative spirit must be nurtured. Celebrating Imagination answers that need and fills a void in the market."

To fulfill the desire of its consumers to foster imagination in children, Carter's will introduce the following as part of Celebrating Imagination:

TOTAL SOLUTION MARKETING

The company will develop a totally comprehensive lifestyle brand that surpasses Carter's traditional children's apparel market and expands into footwear, high-quality accessories, room decor, and play products.

Celebrating Imagination will include toys, music, greeting cards, travel, scrapbook and art-based kits. All of these items will incorporate the quality and appeal long associated with Carter's products.

JOHN LENNON'S ARTWORK IN A NEW PRODUCT LINE

John Lennon's artwork, Real Love for Children, will launch Celebrating Imagination and be incorporated in a new Fall 1999 collection, featuring children's clothes from newborn to age six, available to consumers during summer 1999. As a gift of love, Lennon created this art for his son, Sean. The imagination, innocence, and whimsy of these drawings will be available, for the first time ever, to millions of families on beautiful, finely-made clothing and accessories. The artwork was obtained through a licensing agreement with Bag One Arts represented by Sony Signatures.

THE IMAGINATION SHOP

In Carter's Imagination Shop, a shop within a shop, children can draw on the walls, bang on drums and see themselves 10-feet tall. These fun-filled shops will be in department and specialty stores and will showcase the full line of Carter's Celebrating Imagination products.

At the center of this world is the Imagination Machine, a totally interactive, hands-on and informational fixture, offering parents and children the experience of celebratory shopping. Children can climb into the Imagination Machine and hear sounds or play with interactive games on the outside, while parents can obtain information on how to foster imagination and purchase products geared towards celebrating imagination. The entire motif of the store will include art created by children which will be incorporated into window displays, hang tags and shopping bags. The Imagination Shop has been created by well-known designer, James Mansour, who created the Sony Style Store in Manhattan, the award-winning Warner Brothers flagship store on Fifth Avenue, New York City, and the Early Learning Centre in London.

OTHER PARTNERS IN CELEBRATING IMAGINATION

Carter's has also named Ogilvy & Mather (O&M) Atlanta as its agency of record to help drive the brand's explosive growth. The agency, which bills more than $100 million annually, represents American Express Southern Region, Eastman Kodak Company, Sheraton Hotels and Resorts and McCormick & Company. The strategic marketing team in partnership with Carter's management will also include The Dilenschneider Group, the international strategic counseling and public relations firm.

Known to millions of mothers and grandmothers, Carter's is the number one brand for children, newborn through age six. In 1998, Carter's will sell more than 60 million units. It is the favorite brand for young children.