At first glance, skyrocketing rents would seem to be to blame. Morris Brothers, an UWS purveyor of school attire and camp gear, closed up shop after 27 years when the store’s annual rent was doubled to $1.5 million. Peanut Butter & Jane, said manager Timmie Reilly, simply couldn’t afford a four-fold increase to keep the 29-year-old West Village shop open.

Daphna Inbar, owner of now-shuttered Lollipop Garden, tried to keep prices down to serve her working-class community of Sunnyside, Queens. But as Inbar tells it, the low prices made it impossible for her to meet her rent. In her view, only big chains like Babies “R” Us and Buy Buy Baby can survive in the current climate.

Yet Natalie Mayer, owner of Natalie and Friends in midtown, dismisses the notion that high rents cause closings, reporting that her business is booming. Open for nearly a decade, the store has a history of handpicking new apparel brands and helping them develop into moneymakers. “It’s about uniqueness,” Mayer says. “If it looks individual and creates excitement, customers will come.”

“To some degree rising retail rents have hurt older chains more than new arrivals,” says Karen Bellantoni, senior vice-president at Robert K. Futterman & Associates. “Their tolerance level tends to be different—they are used to staying open for very regular business hours, for example. But I see lots of specialty stores staying open later. Walk along Bleecker or Hudson Streets now at eight at night and you’ll still see parents shopping at open boutiques.”

Offering more-accommodating hours is just one way some shops are evolving to boost sales in this market. Adding an array of peripheral services for their clientele is another.

Brenna Beirne, the owner of Maggie’s Threads in Park Slope, has seen too many Brooklyn shops go under, citing the Children’s Emporium and Go Fish as casualties. So to increase foot traffic, Beirne offers weekly sing-alongs, sling seminars and yoga classes. Other small retailers are also rolling out the play mats: Dumbo’s Modern Tots, Pomme and Half Pint offer everything from haircuts to art classes to attract parents.

Some shopowners are opting to grow their business on the Web rather than face bricks-and-mortar competition head-on. Jennifer Mankins’s Baby Bird was a natural spin-off of her popular fashion-forward adult boutique, Bird—but when her landlord wanted her to take over a larger space, Mankins closed the children’s shop so as not to risk losing money. “There are over a dozen ‘cool’ kid stores in Park Slope,” she reports. “It is a situation of too much supply.” To satisfy customers’ cravings for her wee designs, she launched shopbabybird.com.

Even with all the closings, there’s no dearth of specialty stores serving the kid market—not really. Bellantoni attributes some of the attrition to “a shifting of family-oriented neighborhoods. People who were once moving to the Upper West Side or Westchester to raise their kids are now moving to Tribeca or Brooklyn.” Looking in these areas, “I see a huge trend in kids’ stores opening,” she says.

Indeed, for those willing to take the plunge and enter this crowded marketplace, there are still big bucks to be harvested: In 2006, parents shelled out more than $35 billion (almost an 11 percent increase over the previous year) to keep children looking stylish.

So, what’s the secret to success in selling to the sandbox set? While local competitors all have their own ideas—including their biggest challenge, locking in a reasonable rent—those who persevere aren’t willing to let a single sale go. “I’m closed on Mondays,” says Beirne, whose Maggie’s Threads passed the one-year mark in May, “but when it was raining last Monday, I let two customers in to buy raincoats.”