Once upon a time, upscale baby products were restricted to one-of-a-kind novelty items known in the industry as “granny bait,” the $310 sterling Tiffany baby rattle being the classic example. But today, the high-end sector is among the fastest growing in Canada’s $2.5-billion-a-year children’s retail market. While sales of infant products increased by five per cent over the past year, the luxury-heavy gift market jumped 11 per cent. Upscale labels have mobbed baby retailers—there’s a new world order playing out at boutiques across the city.

At Little Ones on Eglinton West, you can buy an Escada hooded parka with fox trim for $335 or Seven jeans with Swarovski crystals on the back pockets for $192—for a two-year-old. Inside Li’l Niblet & Baby Sprouts in Lawrence Park, grinning dads-to-be can test drive Bugaboo Frog strollers ($1,049 retail) over the treacheries of interlocking brick. Thanks to conspicuous product placement on Desperate Housewives, $200 Petunia Pickle Bottom diaper bags are whizzing off the shelves at Diaper-Eez in Bloor West Village. As of this month, Holt Renfrew has started carrying designer lines for infants—D&G Junior, Moschino and Baby Dior, with price points reaching as high as $300 an item. Welcome to the commodification of babies, in which the trendiest retailers and a willing public are morphing newborns into status symbols.

It should be a great moment for baby product manufacturers, but for Sam Perez this trend is one of the most difficult challenges he’s faced in his career. As president of Kushies Baby—one of the largest baby products manufacturers in the country—he’s well acquainted with the fickle marketplace. Launched in 1989, the company has weathered one recession and at least a dozen style shifts. But now Perez must contend with the fact that his target customers—25- to 35-year-old parents—have become status-crazed spendthrifts. It sounds as if this would be a good thing, but it’s not.

Kushies is not a status brand. Over the past two decades, it has developed a reputation for making cheerful, sturdy goods aimed at the under-two set. Selling eight clothing lines and 350 products—from colourful change pads to waterproof bibs—in 35 countries, the privately held firm brings in revenues of almost $20 million a year. But it’s hard work. Unlike Old Navy and the Gap, Kushies neither has its own retail outlet nor sells any adult products; with each generation, Sam Perez has to establish the brand identity anew. To complicate matters, his company is also being squeezed from the other end of the spectrum, by an equally voracious discount market. Wal-Mart and Loblaws are selling sleepers for half of Kushies’ $22 going rate. With the market being polarized between discount and luxury, Perez must find a new position for his mid-market brand.

The trend toward swaddling infants in silk receiving blankets or outfitting them in Ugg booties has a simple cause: demographics. Urban North Americans are waiting longer to become parents; when they finally do, they’re more established in their careers and their lives, and have more money to spend on their children. The average age of first-time mothers in Canada has increased from 23.4 in 1976 to 28 in 2002. It’s even more marked in wealthy, urban Ontario—especially Toronto—where more than half of all first-time mothers are over the age of 30. Average family size has also decreased, from almost four kids at the height of the baby boom to 1.5 children today.

Compared with boomers, today’s parents have had longer to develop their own identities. A mid-career, 30-something mother is more likely to dress her child in the name brands she knows and loves. For Pilar Guzman, the 35-year-old editor-in-chief of Cookie (a New York publication that’s become a sort of Vogue for babies), the rules are simple. “My husband has a litmus test for the clothes we put on our son,” Guzman notes, neatly summing up the new attitude. “He says, ‘If I wouldn’t wear it, why should I put it on him?’”

In response to this phenomenon, Perez has attempted to move Kushies upmarket. The first step in what was to be an eventual company-wide move was slated to debut last fall: a line of overalls, sweaters and cardigans called Kashmere that would retail at between $200 and $300 an item. As dry clean–only togs intended for creatures who spit up several times a day, they were eminently impractical (and yet suitable for consumers who shell out $177 for tyke-sized Paper Denim & Cloth jeans in a whisker wash). But it’s a rule of branding that while it’s easy to move a luxe label to the mid-market—to cheapen it, in other words—it’s almost impossible to move a mid-market label up. It’s the reason Toyota created a completely new brand, Lexus, rather than trying to sell $100,000 vehicles alongside Corollas. Perez and his team weren’t able to sell the line. “At that price, we were competing against labels like Armani and Moschino. People would pay that much for them, but not for us,” says Perez. “So we killed it.”

Sam Perez doesn’t look like the type to run a baby brand. He clothes his five-foot-nine-inch frame in European-cut suits, merino sweaters and slick crewneck Ts. In his spare time, the 52-year-old cruises around on his Harley or gallops on horseback across the trails with his wife, Susan, at their Niagara Escarpment ranch. Between drags on his cigarette, he speaks with a French accent, betraying his native tongue. But “speaks” isn’t exactly the correct term. Grumbles, maybe. In Kushies’ Stoney Creek headquarters, Perez’s office is a high-ceilinged, airy space, and he bustles about the place like a terrier. One second, he’s demonstrating the Kushies hanger, a plastic device with spreading arms that accommodates clothing as the child grows. The next, he’s showing me the latest sleepwear and sliding open dozens of drawers to display his collection of more than 300 pens—limited-edition or antique Mont Blancs and Cartiers.

He seems more like the kind of guy you’d find running a high-fashion label. And that’s pretty much what he was, circa 1975. Born in Casablanca, Perez was the youngest of five children. His printer father and dressmaker mother moved the family to Montreal in 1968 when Sam was 14. Lured by the glamour of fashion, he convinced his mother to give him a crash course in pattern making. By 1972, he was running his own label, Soms Fashions, on St. Laurent. At its peak, the company had 80 employees and revenues of $1.5 million a year—until it crashed with Montreal’s economy after the separatists won the 1976 Quebec election.