NEW YORK -- Juliet Sandler dresses in the latest $650 dresses and $400 shoes from Parisian fashion house Lanvin. Juliet is 3.

Her mother, Dara Sandler, says she dresses her daughter in the latest fashions because Juliet is a reflection of her – even though her daughter can't spell the names of the designers, let alone pay for their clothes.

"I dress my daughter exactly the way I dress myself," says the 33-year-old Manhattan mother, who spent $10,000 for her daughter's summer wardrobe. She plans to spend a few thousand dollars more for fall.

Top fashion designers are pushing more expensive duds for the increasingly lucrative affluent toddler demographic. This fall, Oscar de la Renta, Dolce & Gabbana, and Marni launched collections for the pint-sized. Luxury stores Nordstrom and Bergdorf Goodman are expanding their children's areas to make room for the newcomers, many of them with higher price tags. Late last year, Gucci, which launched a children's collection two years ago, opened its first children's store on Manhattan's Fifth Avenue.

Some designer houses like Oscar de la Renta and Marni say they're careful to keep the clothes appropriate for kids. But there are plenty of miniature versions of the adult looks that raise eyebrows because of their eye-catching prices and sophisticated styles.

American households are expected to spend an average of $688 outfitting their children for school, says the National Retail Federation, and that includes supplies like pencils and notebooks.

That's most families. Some will spend $795 on Gucci backpacks or $1,090 on leopard print puffy coats from Lanvin.

Sasha Charnin Morrison, fashion director at Us Weekly, admits that some of the clothes are outrageously prices. But, she says, things like $200 Gucci sneakers make her kids happy.

"They're a walking billboard of you. They're a reflection of who you are, so if you are someone highly stylized, then you want to make sure your kids are the best-dressed kids out there," she says.

Critics say the trend promotes elitism.

"This creates a class system of the haves and have nots," says Dr. Alan Hilfer, director of psychology at Maimonides Medical Center in New York City. "It creates a culture of envy."

Only five years ago, the high-end children's wear business was dominated by just a few major designers like Ralph Lauren, Burberry and Christian Dior. But the recent influx of others is the latest sign that affluent shoppers have gone back to splurging since the recession. And as the wealthy feel more comfortable about spending again, they increasingly want their kids to reflect themselves.

It's a "mini-me" phenomenon, says Robert Burke, a New York-based fashion consultant. "It feels good. It's like one for me and one for you," he says. The trend isn't limited to Manhattan or Beverly Hills, but is occurring in other big cities like Boston and Chicago, he says. Sales of designer children's wear are also strong in resort areas where retirees who tend to dote on their grandkids live, he says.

Luxury children's sales account for just a fraction, or just over 3 percent, of the $34 billion market, but it's growing faster than the rest of the children's wear and clothing market, according to NPD Group Inc., a research firm. For the past 12 months ended in May, children's wear sales rose 4 percent, with the upscale component up 7 percent, according to NPD's most recent data. That compares with a 3 percent rise for the overall clothing market.

Designers, seeking more growth, are now looking at children's wear as another way to deepen their relationship with their customers as well as reach out to new ones.

The designers are targeting household incomes of at least $350,000, says Marshal Cohen, NPD's chief industry analyst. That's about seven times the U.S. median household income of $49,445.

Many of the new designer entries are more expensive than some of the established brands like Ralph Lauren. Ralph Lauren's cotton shirts for boys are priced about $59. In comparison, Dolce & Gabbana's plaid shirts for boys run $190. Girl's dresses are about $500.

Nordstrom, whose designer kids clothes were limited to a few names like Burberry and Ralph Lauren, is adding a number of collections for kids from the likes of Marni, Marc Jacobs and Stella McCartney.

Neiman Marcus Group's Bergdorf Goodman in Manhattan recently expanded its children's wear department by a third to devote more space to Gucci and the new lines like Oscar de la Renta. For fall, the prices range from $4 for hair bows to $5,200 for an exclusive Christian Dior silk party dress handmade in France.

"We're definitely growing," says Andrew Mandell, Bergdorf Goodman's vice president and divisional merchandise manager of home and children's wear. "This is a whole new realm. And when you have our customers so fashion forward, they eat this up."

Colleen Sherin, fashion director at Saks Fifth Avenue, says both parents and grandparents are willing to spend on "unique, special" fashion items. "They're just not looking for basics."

The bigger trend, however, is designers creating free-standing shops devoted to kids, says Faith Hope Consolo, who leads retail leasing and marketing at Prudential Douglas Elliman.

Following in the footsteps of Gucci, Italian fashion house Giorgio Armani will be opening this fall its first U.S. store devoted to children in Manhattan's Upper East Side. Armani launched its children's business in the U.S. in 2009.The Armani store, which targets newborns to teenagers, will feature items priced from $50 to $500, says Armani spokesman Christian Langbein.

Some parents who are splurging say they also mix in shopping trips to Gap or other less-expensive stores, but see the designer duds as a confidence booster.

"I really believe when she dresses like this, she feels better about herself," added Sandler, who shops for pricey children's clothes at Barneys New York as well as a New York women's clothing store called Edit, which now has a designer children's wear section.

Manhattan resident Kelly Mallon, 39, says she's proud that her 9-year-old daughter Madeleine has developed her own fashion sensibility.

"I love seeing my child well-dressed. It makes me happy. It makes her happy," says Mallon who outfits her daughter in accessories from Italian designer Missoni and tops from designer Milly's year-old children's line called Milly Minis. "It's not a little girl playing dress up. She's in her own clothes made for her."

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