How to make it big in... ethical babywear

Green, green, green. Undoubtedly the colour and the concept that half the consumers in the country seem obsessed with right now.

It's got to be recycled and reusable and rerouted to avoid aeroplane mileage. If it's not packaged in carbon-neutral cardboard cultivated in co-ops in Cambodia, we ain't bitin'. Of course, ethical retail is a trend that not everyone can afford. Organic produce tends to harvest a healthy margin.

You have to make decisions based on business and then, okay, it's great that it's green.

And that, combined with increasing consumer awareness and pressure, might be why so many big retailers are getting in on the ethical and organic act. M&S switched its entire tea and coffee range to ethical in 2006 and saw a sales increase of 6%, and consequently created 70 lines in fair-trade cotton. Boots launched a fair-trade babywear line called Little Green Radicals in 2007.

H&M has begun producing 50% organic cotton blend in some of their baby garments, and used more organic cotton in its 2008 spring collection than in the whole of 2007. Even previously ethics-derided TopShop now stocks ethical and fair-trade clothing ranges.

According to Ethical Consumer, demand for Fairtrade-marked cotton increased twelve-fold in a single season after its launch in 2005. Not to mention the doubling in sales of organic garments in the UK over the last couple of years.

And an impressive 45 member companies have now signed up to the Ethical Trading Initiative (ETI), including Tesco, Asda, Sainsbury's, M&S, Next, New Look, Monsoon, Boots, WHSmith and Zara.

But before ethics got fashionable and fashion ethical, there were a few entrepreneurs who spotted the trend early. One of those was Jill Barker, who set up the first shop of her ethical babywear chain Green Baby in 1999.

Five years later, she was nominated for the prestigious Ernst & Young Entrepreneur of the Year award. Her business has been written about in the Times, The Independent and The Mirror.

Today, she's turning over around £3 million annually, with a profit margin of 5-10%, and has just opened her fifth high-street shop.

"It's gone from five or six of us selling organic cotton clothing to 134 now doing it", she says. "The big players are now trying to start copying." The competition, though, is still relatively low - the ethical babywear sector is still new enough to be considered, in her opinion, "unchartered territory." And organic is a growing sector - Barker says that every aspect of it is doing well off the back of food.

But despite the lack of competition, ex City-financier Barker knew from the start that multi-channel selling would be the most effective route to fast growth. As well as the shops, she uses online selling, wholesale, mail order and also attends trade fairs and baby fairs to boost exposure and bulk sales.

"Right now my shops are probably doing better than my mail order - but it just depends on what's going on out there. There isn't really any prediction to it." Barker points out that the different channels complement each other. "When you open the shop it increases your mail order because you've got a new captive audience that will now pick up your catalogue - and more for your database, which is good."

The biggest area for margin, and for growth, is the Green Baby own-brand products. "We really do spend a lot of time and effort on our own-branded products. There's the toiletries that have just gone into Waitrose, for instance. They cost a lot to develop but those really are the ones that you're going to see your profits and your revenue streams growing on."

And with 300 stockists, you can see why own-brand toiletries and organic clothing are worth the investment. "The initial concept design and the formulation and that kind of stuff is quite expensive and takes a while to get it right. There's accrediting, design, sampling - it all takes a lot of time." Once that's all up-and-running, "it's about getting the name out and getting the brand out and building the brand."

Not to say that that comes cheap. "We've spent a lot of money on protecting the brand and on trademark issues - fighting to keep that, and legal fees for all that. I think people don't appreciate that or forget to actually protect the brand for the product they're bringing out. You do have to really invest so that it doesn't cost you a lot later on."

Although Barker says that spending on brand protection is definitely worth the money, the cost did take her by surprise. "We spent a few thousand pounds initially which was definitely not in my original budget. Then it just creeps and creeps up. Every time you register a trademark in a different country it's more money.

And every time we get some money we end up registering it in another country so that we protect it. But if you've got something, you need to hold onto it, because it's pretty easy to lose control of the brand." She says that in this way her business model differs from many of her peers'. "We're just investing back into the brand - we realise that the value is that brand."

But when you're dealing with the labels 'ethical', 'organic' and 'babywear', it's easy to see why building a brand consumers can trust is so important. Barker is currently striving to get more of her products Soil Association certified to authenticate her ethical and green credentials further -although she says that this wasn't always so straight-forward. In the past, some ingredients simply weren't available organically.

Whilst brand protection is undoubtedly steep, her highest overheads are staff and premises. She says that ideally all her staff would be ethically minded - and it is a big driver for many employees - but most need training.

We have one person who is our training person, making them understand the products and the ethos behind the products. It does pay off. She also works in the community, making them aware - why they should buy green, products they should buy and bits they should be doing for the environment.

She'll go to fairs, speak to parent groups and that kind of thing, just to help get the green message out." And, of course, the extra Green Baby PR that comes with the advice never goes astray.

"There's always the business head on me, and you've got to make money on it. That's the best way to make people go green, isn't it - to run it like a proper commercial business," she explains.

"I think I learned that in the early days that you can't just stock the greener than green stuff because if people don't think they should be using it, they don't buy it - and then it's absolutely mad to have it on your shelves.

You have to make decisions based on business and then, okay, it's great that it's green. At Green Baby people buy because it's nice and it's fashionable and it's an added bonus that it's green and ethical. Gone are the hippy days - you can be green and be very commercial."

And Green Baby's success is living proof of that.

 

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