Bug in A Rug owner Jane Wood in her office in Milton, October 23, 2013.J.P. MOCZULSKI/The Globe and Mail
Maybe it's her friendly squeak or natural rubber scent, but there's something about Sophie the Giraffe that makes her a must-have teething toy for Canadian babies.
Sales of the eco-friendly little giraffe, manufactured by Vulli SA in France, where Sophie's been an icon for decades, have boomed here and around the world. Celebrities like Orlando Bloom and Kate Hudson chose Sophie for their babies to chomp on and Prince Charles was handed a Sophie when he came out to announce the birth of his grandchild.
"In France, 100 per cent of the birthrate has a Sophie," says Jane Wood, owner and CEO of Bug in a Rug Canada Inc., a private baby-products distribution company in Milton, Ont., and the exclusive Canadian importer of Sophie.
"In Canada, we're at about 40 per cent of the birthrate, or about 165,000 Sophies last year. If a mother takes a Sophie to a baby group, every other baby is trying to get at that Sophie."
The mother of four children, Ms. Wood, 47, founded the company in 2005, primarily to import Sophie. Six full-time staff sell Sophie to over 650 boutiques across Canada, plus top chains such as Toys "R" Us Inc., Shoppers Drug Mart Corp., Hudson's Bay Co., Loblaw Cos. Ltd.and Indigo Books & Music Inc.(retailing up to $26). The company distributes other baby and toddler product lines, such as the upscale Diaper Dude bags, but Sophie, along with Sophie-related products, is still their number one seller. Their current annual revenue is around $3-million.
Ms. Wood attributes a Globe and Mail feature about Sophie, published in December 2006, for initially lighting the fire that "made everyone go nuts for it."
But the company's rapid growth, just under 114 per cent in the last three years, has also been the biggest headache for Ms. Wood, a qualified accountant and former trader. Slow shipping times from France along with late paying customers create cash flow problems that keep her up at night. However Ms. Wood is optimistic about getting these issues under control and hitting 100 per cent of the birth rate here.
"Sophie's an expensive toy, but if it's the best toy for a baby, there's no reason we can't hit 100 per cent of the birthrate here," says Ms. Wood. "There's room for growth." [*The birthrate in 2012/2013 was 383,822 according to Statistics Canada]
What turned you on to Sophie?
I was always looking for unique products to make my life easier as a mum. I'm Canadian but was living in London then and originally distributed Sophie in the U.K. When I gave it to my youngest child – my most difficult baby – she instantly made it squeak and started grinning at it, so I ordered a thousand of them from France. They had never been in the U.K. before, which is weird because Sophie is over 50 years old and just across the channel. It was a no brainer to me that it would eventually catch on.
How did you get the line from Vulli SA?
When we moved here from England in 2006, I knew Sophie wasn't in Canada, so I brought Sophie with me. I had a pretty informal relationship with Vulli because they didn't offer exclusives then and were pretty new at exports. They didn't even have an export department. Sophie was very much a French product and exported only on a small scale to a few countries. So I just contacted them and asked if I could import them into Canada. They said sure, but you have to arrange your own shipping. Once I was settled in Canada, I set up an online store because that's what I had done in the U.K. I ordered 192 at a time at that stage and it grew from there.
Was it difficult to get them approved?
No. I just gave them to the toy testing standard people. Sophie had already passed all the EU standards which are more stringent than Canada and the U.S. standards, so I knew it wouldn't be a problem. I wouldn't touch food or anything like that because it's just too difficult with restrictions and expiry dates. We'll look at anything else as long as it's been approved.
How did you get the Globe and Mail story back in 2006?
I already had got Sophie into a few stores – that's how the reporter found us. The reporter's mother bought a Sophie in London, Ont. I wasn't interviewed at all for that story. From there, lots of little shops and individuals started coming to us to buy Sophie. We know from being a distribution company, that on average, it takes about three years for a product to start being looked for by the consumer. It took less than that for Sophie, probably solely because of that Globe and Mail story. It was lucky.
Was it hard to get into Toy "R" Us and the other big chains?
No. Because people were asking for Sophie all over the place, most of the nationals actually came to us which made it significantly easier to negotiate with them. If you're going to them, it's pretty much on their terms, but if they're coming to you, you have some play with payment terms. Toys "R" Us came looking for Sophie. We didn't have to pound pavement for the nationals at all.
When things exploded, it got a little crazy. I used to get my mom and friends to help us pack once we started getting larger Toys "R" Us orders. Our house turned into a packing shop. We had a big house in Rockwood with a barn that we ended up converting into the Rug in a Bug headquarters before moving to Milton.
Where did Bug in the Rug name come from?
There was a line out of Australia call Snug as a Bug – it's sort of a baby wrap thing. But since that name was already gone in Canada, when the company started importing it into North America, they called it Bug in a Rug. When I moved to Canada, they asked if I would take over from their Canadian distributor to distribute Bug in a Rug in Canada. I said sure, and that combined with Sophie ended up being my online website – so that's where the name came from.
Is Sophie most of your business?
The whole Vulli line makes up most of our business. But I realized a few years into starting my business that 98 per cent of my revenue came from Sophie herself, not even the spinoff, because at that time there were fewer products available. I thought that if something happened to Sophie, my whole business would be gone. That was three or four years ago and it's taken me this long to get to the stage where Sophie and its related products are probably 70 per cent of my income.
Did the financial meltdown of 2008/09 hurt you?
Orders were typically a bit smaller but mothers find money to buy stuff for their babies no matter what the situation is economically – probably much to their husband's chagrin. We didn't really suffer.
What's your biggest challenge?
With the growth we've had, it's just cash flow and trying to hold it all together. The bills get bigger, the invoices get bigger coming in and it's all about the timing. You've got to make sure you have enough from Peter to pay Paul in time. That is a huge ongoing challenge. The company's grown so much that my bank manager keeps saying that I need to slow down the growth. Isn't that kind of like an oxymoron for your bank manager to be telling you that? But our debt to equity ratio is very healthy because relatively, I have very little debt compared to my sales figures.
We've gone into Walmart.ca which is scary too – having to make decisions of what big boxes to go in and worrying about how it's going to affect your other boutiques. We monitor the pricing of our important products so there's no price cutting.
How do you deal with the cash flow issue?
The BDC [Business Development Bank of Canada] helped us with a loan. I was badly burned in a divorce and had to give away half the company and then buy it back, so I'm really hesitant to give away any equity in the company. We've stayed a private company. I'm incorporated but I'm the sole owner. I'm not interested in venture capital. So it's really difficult ...I basically hide from people whom I owe money to, pay the squeakiest wheels and hope that by the end of the next month, everything comes together. Touch wood so far, we're fine. We pay the salaries. It's not as bad as I make it out to be but it is a monthly cycle that's tricky.
You remarried after the divorce?
Yep. We run the business together. Scott's in charge of sales and marketing.
Do you want more lines?
We're constantly approached to distribute other lines because everyone knows us as the Sophie the Giraffe distributor. Half of me wants to take on as many brands as we can to increase our sales, but having said that, you have to look at the different ways that people want payment. If there's anything coming from overseas, you often pay 25 per cent at the time you order and pay the balance at the time the order ships from whatever country it's shipping from on a boat. So it's six to seven months before you get any of that money back – before you sell it and are paid on it. We won't touch any new line that won't give us terms. That's one of our stipulations.
We were just in Vegas at the All Baby & Child show and eight people that I didn't know emailed me before I got there asking us to distribute for them. I didn't go see any of them because we just can't. We can't put our current lines in a precarious position by using our capital to get new lines going. So at this stage, we're just saying no to everybody. It's hard to do because I wonder if I'm saying no to the next Sophie.
What's your criteria for spotting the next Sophie?
We look for products that won't get push back from anybody. The common comments you get are, "Oh, it's made in China, I don't want it." "Oh, it's plastic, I don't want it." "It's not BPA free." "It's not eco-friendly." Anything anyone can say something negative about, you don't want to touch. It's hard enough to get new products into stores without there being a known factor that a percentage of the population isn't going to like.
The challenge is nobody wants anything made in China but they also don't want to pay $26 for a rubber giraffe. We don't want to deal with returns or quality control issues. We have minimal daily dealings with that kind of stuff because we associate ourselves with higher end products. They're not the $75 stuffy toy but they're higher end, so not typically the junk that's going to fall apart.
Where's Jane time?
My husband and I compete in the Ironman and marathons. I still train a lot so my alone time is my running.
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