I really thought of not answering this question mainly because everyone wants the best for their family, but this is just designer branded clothes.
You already know the answer to this one: Kids are not required to wear designer clothing.
The clothing is not necessarily better made, and even if it was, much of children's clothing will be too small after a year or even 2 months for really young children. So it's not the best clothing, and even if it was it will become destroyed or too small for your growing children and need to be replace at a very high cost
You will go broke. They will go broke. Mom will go broke. Think of all that money just trickling away from an education, family vacations, retirement money, videogames they actually wanted, dinner out with the wife, and other activities that make life great.
Peer pressure is hard when you are that age as it is something that seems you can never escape from. But no one grows up and says "my life would have been more succesful and complete if my mom and dad bought me lacoste sneakers".
And how do you want your kids to live, even if they are super-rich: blowing money on clothes or owning businesses?
I'm not sure of the age of your kids, but if they are old enough to demand designer clothes, perhaps it's time for an allowance and/or a job?
What will stay the same is that you and your wife will still know that your kids are amazing and talented. That will never change.