Despite rising commodity prices, increased regulatory scrutiny and the weak economy curbing parents' purchasing power, Scandinavian Child is going global.
The Raleigh company, which distributes European highchairs, strollers, diaper bags and other products in the United States and Canada, announced Monday that it has bought a Swedish furniture company.
The purchase of Svan AB will allow Scandinavian Child to distribute in Europe, Asia and Latin America, said founder and CEO Brenda Berg. It also enables her company to begin manufacturing and new product development.
Its business model has been based on distributing other companies' products, including Svan's high chairs. Berg expects that within two years, more than half of the business will come from manufacturing and selling its own products.
"The margins are bigger, control is greater and expansion opportunities are better," Berg said. "We've always been engaged with manufacturers in terms of design and product development. Now we'll have complete ownership."
Scandinavian Child is privately owned and doesn't disclose financial results. Berg declined to comment on terms of the Svan acquisition.
Even during the recession, however, Scandinavian Child saw 25 percent to 35 percent annual sales growth, Berg said.
"It's not recession proof, but it is resistant," she added.
Berg started Scandinavian Child in 2003 as the North American distributor for Svan products. She discovered Svan's highchairs during a visit to Stockholm while she was pregnant with her first child. Her company also sells other brands, including lillebaby, Micralite and Anka products, to retailers from small boutiques to large retail chains.
Scandinavian Child employs 18 people and will add a handful more with the Svan purchase. Svan CEO Kjell Hägström will join as vice president of design and lead a team in Sweden.
"The combination of our companies is a natural fit, and I am excited to formally work together to strengthen our products, sourcing and distribution capabilities and build a truly global juvenile products company," Hägström said.
Berg begins that effort this week, when she'll to travel to China to meet with several manufacturers. This summer she has scheduled trips to Sweden and France.
"We're aiming to be a profitable, global company," Berg said. She added that there are no plans to move Scandinavian Child's operations out of Raleigh.
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Last Updated (Monday, 30 May 2011 20:39)