phil&teds Most Excellent Buggy Company Ltd

World-beating designs combined with quality and a quirky attitude has taken Wellington business phil&teds from a struggling engineering company to an export juggernaut - with exports of its innovative baby goods growing by 82 percent to over $30 million last year.

phil&teds cuts through the clutter of the crowded international nursery channel with niche products that live up to their marketing promise – to help parents ‘adapt & survive’.

“We believe that nursery products should be aimed at helping parents to manage their day, live their chosen lifestyle and retain their sense of self, even with kids in tow. They need the kit with which to do that, and phil&teds provides exactly that,” explains head of show & tell, Richard Shirtcliffe.

That ‘kit’ is phil&teds' extensive and growing bunch of unique products across six nursery categories: push, sleep, feed, carry, drive, adapt. These unique products include the only travel cot in the world that’s lighter than the baby, car seats, clip-on highchairs, the world’s original and only inline™ buggy and related matching accessories.

The all-important underlying brand values and humour are very engaging for retailers and parents alike, and Mr Shirtcliffe says phil&teds is now well established as an international brand leader in the expanding global niche of the massive nursery products industry, winning numerous international awards.

New category and product development and innovation are critical to this company’s success, with 75 percent of last year’s sales from new products.

“Ideas come from our own parenting inspiration, from ardent phil&teds consumers and from encouraging a ‘let the best idea float to the top’ culture. Staff from any part of the company are encouraged to bounce ideas off each other, within some structure to ensure focus,” says Phil Brace, head of imagination & reality.

Last year alone the company successfully launched 10 new products and introduced new product categories to expand their offering in 1800 stores worldwide; they added 18 new export markets and grew export revenue by five times over their 2005 figure. Ninety-five percent of revenue is export driven from over 40 countries, with key markets the UK, United States, Australia, Europe and Canada.

phil&teds has a deliberate strategy of entering new geographic markets when consumers in those markets have moved past the early adopter stage for purchasers of three-wheeled buggies and there is at least one competitor already present in that market.

While this means it may lose some early sales in those markets, it is entering at a time when it knows the market is closer to a ‘tipping point’ of sales. Paul Yarrall, chief barrow boy, says this avoids the risk of incurring high upfront marketing and advertising expense in a market that may be too early for accepting the buggy concept.

“Our most successful markets are those where we have set up the market ourselves and then appointed a distributor. If you just get into the market and start doing business direct at a very local level you build a market understanding and can scale from there.”

Mr Yarrall says a recent deal with Mothercare, an international nursery chain with 300 stores in 42 countries, represents another “extraordinary leap” in phil&teds’ global brand and product reach.
 
“Mothercare said of the five key brands they introduced to store last year, including our billion dollar competitors’, phil&teds out-performed them all in terms of sales and profit per square metre – key retail metrics.”

Sales are driven from New Zealand, with the direct approach helping phil&teds stand out from other distributor-only suppliers. “I think that it’s important that we are based in New Zealand, paying New Zealand taxes whilst keeping in touch with our markets - every day someone from phil&teds New Zealand is somewhere in the world – not bad given there are only 30 of us!”

Since Campbell Gower, chief cook and bottle washer, took over phil&teds in 1998, the firm’s strategy has been to focus on what it can do best and outsource the rest.

“We go for those parts of the chain where we can add value: our IP, brand, design, supply chain and relationships,” says Mr Gower.

Products are manufactured in China and shipped directly to market, with manufacturing partners working exclusively for phil&teds. He says the company has put in a huge effort to improve quality control to near perfect.

Along with the growth of its core business, phil&teds is also developing new businesses. It has created the mokopuna merino™ baby clothing brand which it now successfully sells in New Zealand (to one in five babies), the UK, Australia, Canada, Scandinavia and Benelux, with potential for distribution worldwide. It’s also launched bam!, a mid-market brand of nursery hardware and is always looking for new business opportunities.

Mr Gower advises other would be exporters to go for it – “We’re not that clever and there aren’t any secrets; we just did more of what did work and less of what didn’t! The harder you work – the luckier you get.”

Contact: Jo Miller, phil&teds, phone 04 380 0833, ext 711, email jo@philandteds.com www.philandteds.com