Rolling stock
From woe to go in five years. Rachel Nottingham looks at how a backyard buggy company became an international brand
Monday, September 22 2003 || BY Rachel Nottingham
Phil and Ted’s Most Excellent Buggy Company Limited: the name may be reminiscent of the jocular 80s comedy movie, but that is about the limit of the similarity. Phil and Ted’s (as it is now known) is a totally serious multimillion dollar company selling over 27 products in more than 300 outlets worldwide, with manufacturing operations in New Zealand and China and predicted turnover growth of at least 30% this year. It’s an impressive record for a company with humble beginnings.
In 1997, former sharebroker Campbell Gower was approached to invest in the company. At the time, Phil and Ted’s (the company is named after the first owners) was a cottage industry producing only two or three buggies a week out of a house in Wellington. Not, perhaps, the average sharebroker’s idea of a dream investment opportunity. But Gower looked past the lacklustre financials and the “agricultural-looking” buggy being produced, and saw that Phil and Ted’s had huge potential. In fact, after making an initial investment in 1997, he was so convinced that he bought the company outright in 1998.
He had no previous experience in either manufacturing or the nursery products market, but as a parent he knew the exponential setup costs of such products whose useful lives were but months. The rudimentary buggy that Phil and Ted’s was producing defied existing buggy life spans by being able to accommodate a second child and being adaptable according to the age of the child. All Gower had to do was to redesign, rebrand and rework the model, and then go and out sell it.
After a year of research and trials, Phil and Ted’s perfected the first one child-to-two, baby-to-toddler buggy. Gower’s gut feeling about the company seemed to be paying off, and after two years turnover had increased to over $1 million. The company hasn’t looked back since, and this innovative buggy remains its lifeblood, although over the last three years it has successfully diversified into cots, carriers and other accessories.
When Gower first took Phil and Ted’s to the market, three-wheeler buggies were just beginning to take off in New Zealand. But from the outset Gower focused on export markets. Though New Zealand was not a known market leader in nursery products, the company leveraged off the positive perception that New Zealand is a “clean green” country to help build a profile in foreign markets. Gower has also eschewed distributors, preferring to develop and maintain personal relationships with retailers to generate an enthusiasm for the products. As a result, he has clocked up thousands of air miles, meeting and greeting. His effort has been rewarded with export deals in markets ranging from Australia, the Benelux countries (Belgium, Netherlands and Luxembourg), to the US and, most recently, the UK. John Lewis, the UK’s largest chain of department stores has just agreed to stock the original buggy. Exports now account for 80% of the company’s sales.
The need to innovate runs the depth of Phil and Ted’s, and is not limited to product design. In an attempt to conquer the Benelux market by bringing their top retailers to New Zealand, Gower is pioneering a three-way marketing initiative with merino clothing company Icebreaker and outdoor equipment manufacturer MacPac. New Zealand Trade and Enterprise was so impressed with the strategy that it’s stumping up a $15,000 grant.
Another inventive strategy has seen Phil and Ted’s pushing its products into outdoor equipment stores, as well as the more traditional baby product retailers. By selling its products through the outdoor shops Phil and Ted’s hopes to underline the mobility and concepts of freedom behind its range.
Keeping ahead of the competition is crucial in the nursery care market — particularly if, like Phil and Ted’s, you aim to be the next Maclaren of the buggy world. Thanks to an interesting design tactic, the company thinks it might be able to achieve it. Phil and Ted’s recently ran a design competition at Victoria University’s School of Design. Using the winner’s “uncluttered, unrestrained free thinking” and a grant from Technology New Zealand, the company has developed what Gower believes will be another market-first in buggy design — a two-wheeler for which there is a patent pending.
So what’s next for Phil and Ted’s? Media-shy Gower is reluctant to reveal much detail, but the target is clear: “To be the leading New Zealand exporter of nursery products” through a drive for leadership in marketing, design and competitive costing. Bold ambitions, but with Gower steering there seems every chance that the company will keep rolling, rolling, rolling until it succeeds.
rachel_nottingham@idg.co.nz