News

Progress Report - grobag

Sunday Times 19/09/04

Babies and nightclubs don't usually mix, but for Rob and Ouvrielle Holmes they were the perfect combination for a business venture, writes Fiona Terry.

It was after the birth of their first child, Sam, that the couple spotted the potential of sleeping bags for babies. Their nightclub provided the security for a loan to develop the idea. They set up offices above the club and in two years turnover at grobag reached £2.8m, with pre-tax profits of £90,000.

The challenge

When the Enterprise Network visited last year, grobags were available through a number of retailers, including John Lewis and Mothercare Direct, as well as via the firm's own catalogue and website.

Several approaches had been made by other multiple retailers, but the couple were in two minds. Although they didn't want to upset existing retailers, they did want to increase exposure. The Holmeses were also keen to add nursery products to their range.

What the experts said

"The time has come for Rob and Ouvrielle Holmes to add to their team as they seek to reinforce their position as a serious consumer-products business with overseas amnbitions," said Rupert Merson of BDO Stoy Hayward. David Titterton of Npower said: "Care must be taken not to expand the company at too fast a pace."

Hugh Barton of Hewlett Packard said: The Holmeses must sacrifice having a greater number of sales channels in exchange for long-term viability." And Noel Carroll of Allied Irish Bank (GB) said: "grobag should consider selling its products overseas."

Action taken

grobag has been refocused on sleep products, with non-sleep products - maternity wear, furniture and toys - organised under a new umbrella brand, gro-group, to be launched this autumn.

The firm now has three business divisions; gro-group uk to focus on the needs of UK trade customers, Bump to 3 for catalogue and website sales, and gro-group international to launch the brand overseas.

In the UK the company now supplies a number of large retailers, including Debenhams, House of Fraser, Boots and Toys R Us. Additions have been made to the team, including a managing director for gro-group international and general managers for both gro-group uk and Bump to 3. grobag has joint ventures in Canada, Australia, Hong Kong and Spain.

Conclusion

"We've continued to work hard on developing the brand and have increased our marketing budget to over £1m," said the Holmses.

The company, which now employs 30, is moving to a new building in Ashburton, Devon. Turnover for this year is forecast to be in excess of £7m, with pre-tax profits of about 5%.