Running a happy house
Wednesday, March 28, 2007/
Changing business strategy several times was the key to the success of Happy House founders Tiffany Manuell and David Buck. By AMANDA GOME
Running a global design business from Adelaide has been challenging but liberating for its two founders, Tiffany Manuell and David Buck. Changing business strategy several times was the key to their success. David talks to Amanda Gome.
“In 1994, my partner Tiffany (right) started Happy House when she was 26. She designed some hand-printed cards and sold them in Adelaide. When they sold well, we sold some property and spent $18,000 establishing the business and working from the second bedroom.
“I was working in business banking, in commercial finance, and joined full-time in March 1996. It was liberating leaving the ANZ after 12 years!
“We built Happy House by going to trade fairs, expanding into gift tags and wrapping paper. That’s really why we took off. Tiffany designed huge [A4 sized] gift tags on raffia. They generated a lot of interest and underpinned our innovative approach. We could see how important distinctive design was.
“The business took off. But manufacturing was an enormous learning curve. By 1998 we were exporting to 10 countries but manufacturing a diverse range of products, running wholesaling, marketing and sales teams got too hard.
“It was so demanding on cash flow, whereas the capital demands for licensing are minuscule. Licensing also allowed us to diversity into all sorts of different areas such as designing mobile phone content and chocolates.
“We moved production offshore and we started to award manufacturing licences so we could just concentrate on the design of very innovative products.
“By 2002 we were exporting to 20 countries through three main licence agreements. By July 2003, we opened our first shop and within two years we had three. But you can’t compete against the large companies. We also were distracted at what we were good at, which is design. So we have closed two shops and will be closing the last one soon.
“We have retail sales globally of $US45 million a year. About 7–12% of what they sell comes to us.
“We have had a good distributor in Dubai for four years. We are also about to expand in the US. We have been going to the New York Trade fair for three years and we appointed an agent over there and have three deals and got four about to happen.
“Asia is a huge focus for us now, it represents the majority of revenue. We have a master franchisee in Korea and 22 sub-licensees there. Japan is coming on strongly but it takes a lot of work and dollars to get into Japan. I just saw a Japanese woman in Adelaide the other day with one of our designs on her bag.
“We have a massive copyright issue, particularly in Asia, but what can we do? Nine times out of 10 we take it as a compliment, We have pursued people in the US and got paid quickly without the need for litigation., But in China we have seen our products at wholesale fairs … but why throw good money after bad?
Tiffany and I have been running the business together now for 12 years and still haven’t strangled each other. We do completely different roles: she heads the design team and I run growth and strategy. We are both very strong and when there is disagreement we have to compromise. But we believe in the company and where we want to take it. We are still scratching the surface of what’s possible.
“The past 12 months we haven’t done much travel. Last year I was away for three months as you have got to maintain relationships. We have two young kids now and we’ve got a good team about us and generally don’t work on weekends but you can still be staring at the ceiling at 3am … ”
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