The Comeback Kid

Bubs Baby Shops

Bubs Baby Shops has grown to become one of Australia’s largest baby store chains despite suffering more than its fair share of bad luck. From a fire that nearly destroyed the company in its second year of business, to last year’s dismal retail climate, the company has managed to consistently come out on top – and remain wholly family owned – regardless of circumstances.

Today, the Queensland based retailer boasts eight stores, each around 1200 square metres in size, as well as a distribution centre and e-commerce website. Mr Hinze has also established an importing company with several brands that also cater for the growing Childcare / Early Learning Centre market.

Bubs Baby Shops’ remarkable resilience is largely due to a simple, yet effective, strategy; the store provides consumers with the products and customer support that they want. “My motto recently has been ‘going back to basics,’” explains Founder and Managing Director Guy Hinze. “That is what has brought us from a $250,000 turnover to be in the top 150 Queensland privately owned companies. It is basically just the simple things – customer service and staff training.” Bubs Baby Shops is known for its friendly, knowledgeable staff members, who are eager to advise customers on anything that they need to know about baby products – without being pushy. In fact, Mr Hinze and his wife Meagan were inspired to launch the company after they began shopping for their own baby over 15 years ago. At the time they discovered how little guidance existing stores offered new parents. As a result, Bubs Baby Shops is designed to be a welcoming and easy shopping experience – even for the most overwhelmed new parent.

Unfortunately, the great idea got off to a shaky start. In 2002, less than two years after the couple’s first store opened, the young company was nearly destroyed by a fire. The startup occupied a modest, 160 square metre shed in the Noosaville Industrial Estate when a fire broke out in a neighbouring tenancy, roared through the building, and wiped out the Hinzes’ shop along with two other businesses. “When we burned down – two years after beginning, the $24,000 that we had started with we had built up to about $110,000 in stock alone,” Mr Hinze recalls. “But we were still only insured for $30,000 dollars, and that is all we got back from the insurance company. The insurance didn’t even cover the money that we owed wholesalers, let alone everything else. We were pretty much left with nothing and a debt of around $20,000 to suppliers. Then within a month later, my second child was born. It was a pretty tough time.”

Most people would have simply given up and let the business go. But not the Hinzes; the couple believed in their vision and knew that they could still make a go of it. Loyal suppliers provided a vital lifeline during the recovery period. “The wholesalers allowed us to get back on our feet without paying for any stock initially,” Mr Hinze explains. “We scraped together as much money as we could and we promised that, instead of going into receivership and not paying them anything, we would pay them something when we reopened. We would work our way back. And we did.”

Mr Hinze is the grandson of Russ Hinze – former prominent Queensland politician and older brother to supermodel Kristy Hinze, so the media widely reported the story of the fire and ensuing troubles. “They always like to report a bad story,” Mr Hinze points out. But, he was determined to use this interest to his advantage. “I made sure that I recorded all the reporters’ phone numbers so when I reopened they could report the good story. It made every media outlet, even the national news. The coverage we got for reopening in July 2002 you couldn’t pay for. Within about 6 to 12 months of reopening we had pretty much recovered the loss built up over the first two years.”

The business kept on building from there, and the team began opening additional stores locally in Queensland. A large store in Brisbane’s Fortitude Valley was next. “It was the first of its kind in Australia, being in a Homemaker Centre and such a large size,” Mr Hinze remembers. Bubs Baby Shops eventually adopted a franchise model and grew to 13 stores before the Hinzes decided to change direction in order to focus on what was most important. “Six years ago my third child was born, and because I had done so much traveling establishing the business and opening stores when the first two children were younger, we decided to make things simpler,” Mr Hinze explains. “We let the franchisees buy back the franchise and rename their stores and work under their own names, separate from us.” Bubs Baby Shops only kept a handful of corporately owned stores so that the family could have a life beyond their business. “It allowed me to spend more time with my growing family. Something that wasn’t possible earlier.”

The challenges were not over yet, however. In fact, some of Bubs Baby Shops’ toughest trials have taken place over the past two years. “2012/2013 was very tough. It was a terrible year for retail. And my home state, Queensland, is recovering from two major floods on top of the economy being depressed.” Other family owned competitors folded due to the pressure. “Three companies have sold out to private equity or investors over the past four to five years,” Mr Hinze shares. All companies had been around longer than Bubs Baby Shops and had a stronger foothold in the industry in southern States. For a while, selling out looked like the only viable option for Bubs Baby Shops, especially when it was one of the few family owned companies of its kind left. “It was something that we had several options to do and we didn’t. We remained completely family owned.”

The pressure only increased, however. “Those companies [that had been sold] then went out and expanded into Queensland and NSW, out of their original territories. So the last 12 months have seen nine stores open up in our areas. So not only are you dealing with a depressed economy, you are dealing with so many new stores opening up in a short amount of time, which obviously puts a lot of pressure on [us].” The team had to reassess and make some major changes to remain viable. “We had to undergo a pretty massive restructure in July 2013.”

Fortunately, this year is looking up. “I am happy to say that things have really turned around for us. We are getting back on track and things are moving in the right direction.” In fact, one of the three expanding competitors went into administration last year. Now that the smoke has cleared, Bubs Baby Shops is one of the few family-owned competitors left standing on the retail battlefield. “Something like 30 plus stores that are independent have closed down over the last 18 months plus the one National company that started out family owned,” Mr Hinze reports. “We are one of the last remaining of our size that remains family owned and operated in Australia.” The fact that the company remains family owned creates a huge advantage, he adds. “I think we are in a strong position because we are still family owned and operated and have long standing relationships with suppliers. We can change, adjust, make decisions and put them in place a lot faster than other companies that are larger and have more corporate levels. Bigger isn’t always better.”

Bubs Baby Shops is celebrating its success with a fifteenth birthday sale this month. “We are having a massive birthday promotion,” says Mr Hinze. The big birthday sale will be one of the biggest events of the year, and will include a mass mailing of 800,000 16-page catalogues to households that fit customer demographics. “We think March will be a solid month for us – the year has started out strong thus far,” Mr Hinze adds. “There will be some good promotions and in-store specials. We are really going to get our brand name back out there and let everyone know that we are here and here to stay. Bubs will still be here to celebrate our 30th birthday.”

Bubs Baby Shops has also been ramping up its online presence to better serve customers. The team is particularly eager to reach consumers “who don’t have stores our size within reach.” However, customers both near and far will benefit from the company’s easy to use website, which includes a comprehensive product list and helpful tips on products and parenting. “Customers are definitely using online [tools] to learn more about products and learn more about what they want,” Mr Hinze adds. “Whereas in the past, customers would come into our store and they would be fairly daunted. They wouldn’t know where to start. Customers now can go online to really research and find out about car seat safety, or what sort of car seat would be the best seat for their car and their lifestyle, or what sort of pram they should use. It has definitely helped the customer to do their research and learn what they want.”

No matter how popular the company’s website becomes, however, in-store customer service will always be a top priority. “Maintaining a high level of customer service during such a difficult period and restructure was difficult,” Mr Hinze adds. After all, Bubs Baby Shops was founded on a promise to provide the best advice and information available through the help of a savvy, well-trained staff. This point of difference brought the company its initial success – and sustained it through tough times. This is again now the company’s main focus – with a new staff induction training program and new staff coming through the roster. Now, after regaining some of the ground lost during last year’s difficult economy, the team is excited to continue serving customers. “We are not going anywhere,” Mr Hinze insists. “We have survived everything that was thrown at us and we are here to stay.”

For more information about Bubs Baby Shops, please visit http://www.bubs.com.au/.

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