Small retailers eyeing bright outlook overseas

A young girl wearing Babiator sunglasses Babiators' sunglasses are now on sale in shops in 45 countries

The founders of a new brand of children's sunglasses guessed their sales would soar across the US thanks to the glare of publicity provided by a celebrity TV endorsement.

The company in question is called Babiators, and the praise came back in 2012 from actor and comedian Nick Cannon, the husband of singer Mariah Carey.

Appearing on the popular Ellen DeGeneres Show, he said how much he liked his baby son's sunglasses.

The publicity, which came just a year after the Atlanta-based business was formed, sparked a stampede of customers and put Babiators firmly on the map in the US.

With its domestic sales having continued to grow strongly, the company, which now has 15 staff, has since expanded overseas.

But while Babiators enjoyed a dream start in its home market, how has it fared abroad? And what are the wider issues that small retailers have to face when seeking international sales?

Start Quote

One of the major challenges is brand unity, [of] wanting to make sure that the person who signs on to exclusive rights for Babiators in another country gets your brand, and will sell it well”

End Quote Molly Fienning Co-founder Babiators
'Could be fun'

Babiators was founded by two couples who had been friends since university, Ted and Molly Fienning, and Matthew and Carolyn Guard.

The inspiration for the product sprang from Mr Fienning's previous job as a fighter pilot for the US Marine Corps.

One time while Mrs Fienning was watching her husband and his colleagues land their planes at their base in South Carolina, she noticed that all the children in attendance were having to squint as they looked up at the sky.

The military had issued Aviator sunglasses to the adults watching their loved ones, but not to the boys and girls.

"The kids were kind of left out there in the sun," says Ms Fienning, 34.

She mentioned the children's predicament to her husband, who came up with the name, Babiators.

"Once we had the name, we thought, 'OK, this could be fun,'" she says.

Developing the idea with the Guards, they designed sunglasses which were made out of rubber instead of plastic, so as to be as durable and child-friendly as possible.

Babiators co-founders, left to right, Molly Fienning, Carolyn Guard and Matthew Guard Babiators says being an American company has helped their overseas sales

They started selling Babiators in March, 2011, for about $20 (£12) each.

'Brand unity'

Although the Babiators' website allows customers to buy the sunglasses directly, the company realised that most people, when buying clothes or clothing accessories, like to try them on first.

Start Quote

Entrepreneurs need to do what I'm not sure comes naturally to them - they need to pause and study the culture”

End Quote Candace Corlett WSL Strategic Retail

So after some speedy international expansion, the sunglasses are now available in 45 countries, via almost 2,000 retailers.

This swift overseas growth has posed some obstacles for the company.

"One of the major challenges is brand unity," says Ms Fienning. "[Of] wanting to make sure that the person who signs on to exclusive rights for Babiators in another country gets your brand, and will sell it well."

But despite these worries, with Babiators' total sales set to hit $4m (£2.4m) this year, Matthew Guard says the brand's strong American identity has been a big help overseas.

"The fact that we have a very American brand is actually a real asset," says Mr Guard, 34. "The hard part for many entrepreneurs is finding an identity that works [abroad]."

'Good feel'

For UK-based ladies' shoes designer Sarah Watkinson-Yull, she has worked hard to ensure that her company's expansion into mainland Europe has increased the strength of her brand, rather than damage it in any way.

Sarah Watkinson-Yull with one of her shoes Ms Watkinson-Yull keeps a close eye on stockists

The 24-year-old is the owner of Oxfordshire-based Yull, which she started in 2011 while still at university.

Yull now sells 600 pairs of shoes in Europe a year, via independent shops predominantly in Italy, France and Belgium.

While the stores are supplied by agents in each country, Ms Watkinson-Yull personally checks and approves which shops can stock her shoes.

"Thanks to social media and the internet, I can have a look at the shops, and generally get a good feel for them," she says.

"I don't simply sell to a wholesaler, and let him or her sell on to anyone... the damage to the brand could be horrendous."

But whatever the plan of action a small retailer has in order to succeed in overseas markets, analyst Candace Corlett, president of New York-based WSL Strategic Retail, says that carrying out significant research is vital.

She advises such firms that they look closely at the target markets, with the help of local consultants and through detailed preparation.

"Entrepreneurs need to do what I'm not sure comes naturally to them," she says. "They need to pause and study the culture."

With so many potential pitfalls to overseas expansion, some small retailers have decided to instead stick to their home market, at least for now.

One such business is Atlanta-based Hide-ees, which makes cotton shorts for girls to wear under dresses and skirts, to prevent them from accidently showing their underpants.

Its products are currently available in 500 retailers across the US, and the company has decided to focus solely on growing its sales within the states, at least for the foreseeable future. Even its online sales are only open to people based within the US.

Back at Babiators, the founders add that their overseas sales are greatly helped by pictures of children wearing their sunglasses, and that such images help to overcome any language barriers.

"A cute kid is a cute kid, no matter where he or she is," says Carolyn Guard, 32.

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    12:24: UK GROWTH
    BBC

    Shadow Chancellor Ed Balls responds to the UK growth figures. "People's living standards have been falling month on month," he says. "Wages aren't keeping pace." Somewhat distracting was the rather large-looking spider that flew into view and appears to have kept parts of twitter amused.

     
  2.  
    12:10: SERVICE SECTOR OUTPUT
    Chart showing service sector growth by sub sector

    Lest we forget. Service sector output grew by 3.1% in the year to August, according to the latest ONS figures which are also out this morning. A word of caution though; month on month output was flat. The biggest sub-sector contribution came from business and financial services which added 1.54 percentage points to the overall figure.

     
  3.  
    Via Twitter The Queen

    The Queen, using the Buckingham Palace-based account @BritishMonarchy tweets: It is a pleasure to open the Information Age exhibition today at the @ScienceMuseum and I hope people will enjoy visiting. Elizabeth R.

     
  4.  
    UK GDP Via Email Ben Brettell Senior Economist, Hargreaves Lansdown

    "In many ways the UK is proving to be the archetypal 'goldilocks economy' - not too hot and not too cold. Growth is relatively strong, but inflation remains subdued, which allows the Bank of England to provide continued support via ultra-low interest rates. Of course this will come as scant consolation to workers who have suffered wage increases below the rate of inflation throughout the recovery to date, and savers who continue to receive paltry rates of interest on their deposits."

     
  5.  
    11:23: BASF OUTLOOK CUT
    basf

    German chemical and oil firm BASF has cut its outlook for next year, pointing to slower global economic growth and industrial production. Shares fell 2.4% to €69.34 (£54.65). BASF cut its 2015 forecast for earnings before interest, tax, and erosion in the value of its assets to €10-12bn from €14bn.

     
  6.  
    11:07: EU PAYMENT

    The EU has also pointed out this morning that the UK's contribution to the budget went down in the recession and is going up now relative to its recent economic success. The EU also lets on the UK's net contribution to the EU budget as a percentage of public spending. What would you guess that is? 10%? 2%? Answers to bizlivepage@bbc.co.uk please.

     
  7.  
    10:54: UK GDP
    UK GDP graph

    Economic growth is now 3.4% higher than the previous 2008 peak, the ONS says. The largest contributor to GDP growth came from - you guessed it - services; which increased by 0.7% in the quarter, contributing 0.58 percentage points to the increase in GDP.

     
  8.  
    10:39: UK GDP
    FTSE share graph

    The economic growth figures didn't have much impact on the FTSE 100. That might be because they were in line with expectations, which actually would end up being a bit of a disappointment, given that expectations were factoring in a slowdown in output. The FTSE is still 0.28% below Thursday's close of 6419 at 6401.48. On the plus side, it's not been too bad a week for the FTSE, If it can keep its head above 6400, it'll be 90 points up on the week.

     
  9.  
    10:26: EU PAYMENT

    Some reaction from Brussels finally over the "extra" £1.7bn being paid to the European Union. A spokesman says the additional money is NOT a surcharge or a top up fee or a "punishment for success". It is instead they say "the result of a standard statistical formula being applied." The EU adds it is always the case that countries with bigger economies -the result of having more growth than others - see relative contributions rise.

     
  10.  
    UK GDP 10:16: Via Email
    Chart showing sub sector growth contributions to UK GDP

    IHS Global Insight economist Howard Archer writes that the third-quarter "moderation in growth" was due to some slowdown in services expansion from the very strong rate seen in the second quarter. Meanwhile manufacturing output growth was relatively limited. While the Chancellor may claim that the UK's economic recovery has been "broadly based", the evidence from the ONS chart above - which shows service sector growth outperforming overall UK GDP - would suggest otherwise.

     
  11.  
    10:01: UK GDP
    George Osborne

    Chancellor of the Exchequer, George Osborne has welcomed today's "strong" UK GDP figures. He says the data shows "the UK continues to lead the pack in an increasingly uncertain global economy". With all the main sectors of the economy growing it's clear that our recovery is broadly based, he adds.

     
  12.  
    09:45: UK GDP

    UK economic growth in the year to the end of September stood at 3%, the Office for National Statistics adds.

     
  13.  
    09:30: UK GDP

    The UK economy grew by 0.7% in the three months to September, in line with City forecasts, official figures show. In the previous three months the economy grew by 0.9%. The first three months of the year were initially estimated to have seen growth of 0.8% but that was recently revised back down to 0.7%.

     
  14.  
    09:21: TSB EARNINGS

    TSB shares are up 1.8% in London to 263.70p. Numis analyst Mike Trippitt says the bank's profit beat his estimates in a note to clients. Impairments were lower than the market thought and costs were better.

     
  15.  
    09:07: SPIRIT PUBS TAKEOVER
    pub

    More analysis on Greene King and C&C's offers for the Spirit pub chain. "The really interesting development, in our view, would be for all three businesses to combine. The result would be a leading pubco and a brewer, cider maker and distributor with a much stronger portfolio of brands," say analysts at City broker Canaccord Genuity this morning. "C&C also own Tennents, the leading Scottish lager. Belhaven (Greene King's Scottish estate) is a leading customer."

     
  16.  
    08:51: BANK OF DAVE Radio 5 live

    Dave Fishwick, the minibus salesman who founded the "Bank of Dave" is on Radio 5 live. What does the banking market need? "What we desperately need out there is challenger banks," he says. What's also needed is "tighter control of the bigger banks to prevent greed and corruption," he adds.

     
  17.  
    08:36: MARKET REPORT

    The fallout from Tesco's results yesterday continues today. The supermarket is the biggest faller on the FTSE 100 Index so far this morning down 2.3% to 167.05p. European markets are down generally. The FTSE 100 is down 0.45% to 6390.17, Germany's Dax is down 0.40% to 9011.29 and France's Cac-40 has fallen 050% to 4136.95.

     
  18.  
    08:23: PEARSON EARNINGS
    penguin

    Pearson's chief executive John Fallon says the firm's £50m cost-cutting programme is on track and "momentum in digital, services and emerging market education is building, which will drive a leaner, more cash generative, faster growing business from 2015."

     
  19.  
    08:06: SPIRIT PUBS TAKEOVER

    Could this be the beginning of a bidding war? The pub chain has said it has rejected a takeover proposal from Irish cider maker C&C Group today. Spirit is already in talks with brewer and pub owner Greene King about its proposed £723m takeover offer. C&C, the maker of Magners and Bulmers, has until 20 November to announce a firm takeover offer.

     
  20.  
    07:51: PEARSON EARNINGS

    Pearson has reported flat underlying revenue for nine months to the end of September and a 1% fall in in what it calls headline growth for the period. It blames the strength of sterling against key emerging market currencies for the fall. Penguin Random House has performed well in the third quarter, it adds without giving detail. It says the integration of its businesses is "progressing well and is on track to deliver benefits in 2015 and beyond".

     
  21.  
    07:38: HIKMA WARNING

    Hikma Pharmaceuticals says it has received a warning letter US Food and Drug Administration after an inspection at its manufacturing plant in Portugal. "In the letter, the agency raised issues related to investigations and environmental monitoring at the facility," said the firm, which is taking the letter "very seriously."

     
  22.  
    07:26: TSB EARNINGS
    The TSB logo

    Impairments - that is, bad loans - fell to £23m from £32.2m, said TSB. Loans rose 7.7% to £22bn compared to a year ago, but fell from a peak of £23bn six months ago. TSB won 9.7% of all new or switched bank accounts, it said, adding £500m of deposits.

     
  23.  
    07:18: PEARSON FINANCE CHIEF STEPS DOWN

    Robin Freestone, chief financial officer of Financial Times and Penguin Random House owner Pearson has announced he is standing down after 10 years with the firm, including eight in his current role. He will probably leave the firm in 2015 after a successor has been found, said the firm.

     
  24.  
    07:08: TSB EARNINGS

    TSB third-quarter profit before tax fell 14% to £33.1m compared with the same time a year ago, after operating expenses rose. But revenue swelled 18% to £199m

     
  25.  
    06:54: EU PAYMENT Radio 5 live

    Sarah Hewin of Standard Chartered on 5 live says the payment has to be made in the next few months. That could mean more borrowing, she says.

     
  26.  
    06:41: EU PAYMENT Radio 5 live
    British Prime Minister David Cameron

    Sarah Hewin of Standard Chartered is explaining why the UK has to pay an extra £1.7bn to the EU on 5 live. "The UK has been doing better since 1997 than we thought and that's resulted in this extra payment. The Netherlands will pay more, while France and Germany get a rebate."

     
  27.  
    06:29: AMAZON RESULTS Radio 5 live

    Paul Kavanagh of wealth manager Killik is talking about Amazon's loss-making results last night. "It begs the question about what is happening here with this strategy. The shares fell 11% in after hours [in the US]." Investors may be growing tired of ever-more sales expansion with little profit to show for it, he tells 5 live.

     
  28.  
    06:20: CHALLENGER BANKS Radio 5 live

    Paul Kavanagh of wealth manager Killik says it's difficult for banks to persuade customers they offer something new. When a challenger bank succeeds, the larger banks often take the best ideas, he says on 5 live.

     
  29.  
    06:12: CHALLENGER BANKS Radio 5 live

    Steve Davies is still on 5 live. He says challenger banks are forcing their larger competitors to think more about the customer and service - think Metro bank opening on Sundays. Competing on rates is more difficult, he says. TSB results coming up later.

     
  30.  
    06:03: CHALLENGER BANKS Radio 5 live

    Steve Davies of accountants PwC is on 5 live talking about so-called challenger banks. Can they challenge the largest high street banks? "They have to be able to offer something a little bit different," he says. "The challenge is around innovation," he says. Customer is key, he adds.

     
  31.  
    06:00: Howard Mustoe Business reporter

    Good morning. Get in touch via email blizlivepage@bbc.co.uk and twitter @BBCBusiness.

     
  32.  
    06:00: Matthew West Business reporter

    Morning folks. It's Friday, we're nearly at the weekend. But before that, TSB kicks off bank earnings season and Shire has financials out as well. There's also some service sector data but the big bit of data is the first estimate of third quarter GDP. We'll bring you it all as it happens as always.

     

Features

From BBC Capital

Programmes

  • The smartphone that answers backClick Watch

    Smartphones get smarter – the prototypes that talk and say ouch when you drop them

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.