Exports to the U.S. market grew quickly, and Mr. Britton began to worry that Chariot had almost no brand recognition of its own. If one of its partner companies decided to pull out, Chariot would lose the market entirely. And so, in 2000, Chariot set up U.S. distribution of its own, launching the Chariot brand stateside two years later.
Around the same time Chariot was first entering the U.S., Mr. Britton began looking to improve some of the product designs, and inquired about a hitch component being sold in Europe. The European market wasn't on Chariot's radar yet, but when Mr. Britton came into contact with Germany's Zwei Plus Zwei (Two Plus Two), a retailer and distributor of cycling products, a new vista opened up in front of them.
Zwei Plus Zwei liked the Chariot product and, in 1997, after the two parties agreed on a distribution agreement, Chariot started shipping to Germany. While Chariot is mostly a recreational product in North America, in Europe – now the company's largest market – the bike culture is more mature. Chariots are used every day to drop off children, to go grocery shopping and to the park.
But with Chariot growing steadily, new challenges arose. Because the company did most of its selling seasonally in a three-month period (late March to June), if sales were above forecast, there wasn't the opportunity to respond quickly with higher production rates.
“It was a challenge to get product into the pipeline,” says Chris Britton. “The Chris and Dan show began to have some cracks in it.”
As all manufacturing was being done in Calgary – half of the labour was sewing and the other half assembly and fabrication – finding experienced industrial seamstresses in the city also started to become a problem. Labour and material costs rose as much as 25 per cent during the economic boom of the mid-2000s, causing profit margins to drop dramatically. In 2008, running full-tilt but dealing with tight cash flow, the company went in search of outside investors.
Their timing was horrible: The credit crisis hit later that year, making additional financing near impossible. Unable to meet demand and needing to cut costs, Chariot decided to move all its manufacturing to the Goodbaby Child Products factory near Shanghai. Approximately 150 of the 180-plus workbforce were laid off between the fall of 2009 and the spring of 2011, with the last CX – Chariot's premium and most expensive carrier – rolling off the Calgary line on April 30, 2011.
“It's something we've known we had to consider and something we probably should have done sooner for the overall health of our business,” says Mr. Britton, reflecting now on the move to manufacture in China.
Although the brothers never saw selling the company as their end goal, they had their fair share of inquiries over the years. The answer was always “no.” But running a fast-growing business through the ups and downs of the market over the course of two decades takes its toll.
Early in 2010, Dan, admitting to feeling burned out, decided to step down as CEO and president of the company to concentrate on product development. Pierre Doyon, who had been hired as a business consultant the previous year, stepped in.
Around the same time, Chris Britton made an announcement: He would be stepping down from the VP manufacturing job by the following summer to spend more time with family, staying on only as a silent partner. The following spring, Chariot was sold to Thule.
One of the common conundrums for founders of privately held small businesses is the question of an exit strategy, because when the time comes, there aren't many options.
“The problem with the old business model is that families would build the business up and then pass it on to their kids,” says Leo Donlevy, senior instructor at the faculty of entrepreneurship and innovation at University of Calgary's Haskayne School of Business. “The options [are increasingly]selling to an employee or to a third party. Chariot is in the fortunate position of having found a buyer.”
That buyer, Thule, has been quick to make a change at the top, replacing Pierre Doyon with Tom Andersen. I met with Mr. Andersen in early July, just days after he had relocated to Calgary. Dressed in shorts and a fleece zip-up, Mr. Andersen is exactly what you'd expect in a guy who has been working in the sporting goods industry since he was 18, most recently as a business manager at Thule Group's North American headquarters in Seymour, Conn.
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