HABA USA: Lea Culliton Sells German Ingenuity

I met the President of HABA USA, Lea Culliton, when she first started marketing the German toy brand in the U.S. and she was comparing options for print advertising to the trade. Early on, I could tell that Lea was precise, organized and understood the relationship of carefully-defined marketing budgets, rates and circulation. She was smart, honest and direct in her decision making and was willing to make a year-long investment in advertising. I admired her as an astute businesswoman. After over 10 years, my opinion of Lea has proved constant. We developed a business friendship based on mutual respect. Many others also value her as a leader in the children’s industry.

When I saw Lea at this year’s ABC Spring Conference I was impressed with the growth of her company and its expansion that included several other European-based brands. I was interested to learn more about her smart business growth and was curious to learn more about her success and strategy. So, Lea agreed to share her “Behind-the-Brand” story with us.

When was the HABA brand born and what was its inspiration?

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The HABA family is celebrating our 75th anniversary this year. In 1938, Mr. Eugene Habermaass and a friend started producing wooden toys & children’s products in Bad Rodach, Germany. At only 24 years of age in 1961, Eugene’s son Mr. Klaus Habermaass took over the management of the company. Due to Klaus Habermaass’ great vision and entrepreneurial spirit, he purchased a USA-based toy manufacturer in 1980 — Skaneateles Handicrafters, in New York — which then became known as the T.C. Timber company. T.C. Timber continued to manufacture unit blocks and wooden train sets until 2002, when HABA then decided to restructure the organization, close the manufacturing, and transition the Skaneateles facility into the HABA USA warehouse and distribution facility that it is today.

In 2002 the HABA USA division, under my guidance, was established. We started importing and reselling specialty stores the entire breadth of the HABA children’s products from rattles to jewelry. The timing was perfect as the moms were looking for more wooden products for their babies; especially wooden toys still made in Germany. As we grew we tried several different product categories in the USA, including even children’s bedroom furniture and lighting.

”

How is HABA USA different in its product offerings than the parent company in Germany?

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As the recession took hold of the USA market and the concurrent CPSIA act took effect, HABA took a good look at what categories were really selling into the USA market. We had become well known for our quality, top-of-the-line wooden baby toys, rattles and blocks. We decided to no longer sell the wooden jewelry or furniture categories. Instead, in the USA we saw the unique niche of co-branding with other European lines that maintain very similar strong core values as HABA: dedicate to specialty; provide innovative, highest quality products at fair value.

We now partner as the distribution and marketing arms of four other European based brands: Gotz (dolls), Lilliputiens (plush), Spielstabil (sand & water toys and dishes) and Moover (wooden ride-on toys).

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What was the biggest challenge you faced when starting?

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In 2002 when I joined HABA and instigated the transition to marketing/distribution rather than production, we confused the marketplace with the T.C. Timber architectural products and the HABA wooden toys produced in Bad Rodach Germany. HABA USA was a “new” company and brand for the USA, and T.C. Timber was already well-known to the educational market. It took some time for retailers to realize that we were the same company and still offered the educational products and now the new infant/toddler wooden toys.

I personally had worked on the furniture side of the educational/childcare industry. In fact, I worked for a Wisconsin-based furniture distributor that was and still is today, the exclusive importer/distributor of the HABA school and commercial furniture. I managed to meet up with the HABA USA toys division via my role at Gressco Ltd., the HABA school furniture distributor. Being a mom of two young children at the time was of course of great benefit to me as I was the ‘consumer’ HABA wanted to target.

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What were the three biggest keys to your success?

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I often get asked what I attribute my success to, and I always first and foremost say it is the people I work with in this industry: reps, retailers, PR, trade publications, associations, etc. HABA USA would not be here today if it weren’t for our sales representatives and the retailers.

Of course, I had to listen, learn, execute and follow through on what I learned. By traveling on the road with the reps when I first began, and listening and learning from our discussions with retailers, I really learned what needed to be done in order to help make HABA become a successful brand in the USA.

I would have to attribute my ability to remain focused as my third biggest key to success. Oftentimes, we can get lost in the clutter surrounding us, such as what other competitors are doing to copy our brand and confuse the marketplace, but I find that being focused and keeping my integrity keeps the success flowing.

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Describe a typical new product development cycle for the brand?

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The new products at HABA are all designed internally within our own design staff in Bad Rodach, Germany, with the exception of our board games where external ideas are accepted. The product team speaks with the sales teams to identify potential new categories and then designs products within both existing and new categories.

A team of product managers works with the designers under the direction of our sales manager, Mr. Michael Hopf. Years ago, HABA did not want to outsource any of its production, but we soon learned that we are excellent wood toy manufacturers, but our audience wants more than just wood, so just a few short years ago HABA branched out to third party production in other countries.

Once HABA Germany decides what their new products are going to be, then I get to look at them, see a few months’ sales in Europe and then make my decisions as to which products I want to import and make available to the North American audience. Our retailers also prefer to have our board games in English-only boxes and packaging, so I have the daunting task of playing all the new games and trying to guess and decide at which games should be translated and made into North American products. We can’t publish all of our games with English packaging because of the cost, so we sell the remainder of the line with German packaging, which still sells well.

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How do you select complementary brands to be included under the HABA USA distributorship?

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Admittedly, in 2002 we never thought that 10 years from now we’d be where we are today as a distributor of four other very nice, high-quality European lines. We began with Spielstabil years ago, I believe due to personal relationships in Germany.

The Moover line of toys was our first step into the distribution channel. Jeppe Krog was trying to gain retail presence in the USA but couldn’t afford the high costs of overhead of a sales, marketing and warehouse office in the USA. The Moover toy line didn’t conflict with the HABA toy line, so we decided to give it a try.

The next brand was Gotz. The Gotz office happens to be a short 20-minute drive away from the HABA offices in Bad Rodach. The export managers began to talk and then approached me, and after a thorough analysis we decided to go for it. During that same time period, over the years I had gotten to know the personnel from Lilliputiens. We’d help each other out at trade shows, discuss the industry and exchange emails from time to time. Lilliputiens was shipping direct to retailers from their Belgium office which they were finding was very costly. Lilliputiens did their search on distributors in America and chose HABA. We were very proud to showcase both the Gotz and Lilliputiens brands at our booth at this year’s 2013 New York Toy Fair and ASTRA booth.

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Do “green” or eco-friendly concerns influence your business decisions? If so, how?

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While the ‘green’ and ‘organic’ topics are still very near and dear to some retailers’ souls, we believe that in general it is not as critical as perhaps we used to think it was. We do offer a line of purely organically-farmed cotton products in our Pure Nature line, and our wooden toys are produced using PEFC timbers in Europe. In addition, the HABA offices in Germany are using geo-thermal heating and cooling and all of the timber waste is being used to efficiently heat all of our facilities; in fact if there are any scraps leftover they are given away to the community free of charge to use as firewood for heating their homes. We also collect and reuse all the rainwater in our secondary water resources, so the company as a business is very environmentally-aware.

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What is one new trend you’re seeing in the retail marketplace?

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We are seeing more and more crossover than we ever have from the juvenile market to the toys market and vice-versa. In this day of growing ecommerce, the brick and mortar retailers need to find ways to diversify, yet stay specialty and be successful in their marketplace.

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How does your business make use of the Internet?

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I have always acknowledged the strength of the Internet. In my relatively short tenure in the toy industry, I’ve seen many (too many) great businesses open and fail largely due to the Internet. I decided a few years ago that the only way I could help HABA be successful was to quit complaining about the Internet, and embrace it and learn how we could use it best for our brands. I’ve attended several social media conferences and marketing-to-mom conferences to learn more about how today’s mom makes her purchases. We use our website to inform; we make videos not only for our own use, but for our retailers’ use; we blog; we provide content; we still do traditional media through the help of our PR firm, KidStuff PR, to engage our audience, as well as work closely with a team of mom bloggers.

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What has had a positive impact for your business in the last year?

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HABA is being embraced by the juvenile market, especially the folks at the ABC Kids Expo and the BRIXY marketplace. The HABA brand itself was already doing well in the juvenile marketplace, but now with the addition of the Lilliputiens, Moover and Gotz dolls to our offerings, I like to think that we are providing some of these specialty stores a good breadth of product that they can sell to complement their offerings. And we are remaining true to our specialty mission with all of our brands. Hopefully the retailers take note of that important fact.

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What advice can you share for someone entering the children’s market?

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My advice to new manufacturers/inventors entering the marketplace is to stay true to your mission. Educate yourself, listen to the retailers, and know what channels you wish to sell to and what your long term goals are, because it is a much different path if you are looking to sell a lot quickly and position the company for takeover, or whether you want to be in the specialty business for the long term.

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More About HABA USA

HABA products can be found nationwide at over 1,000 U.S. specialty retail stores and in specialty catalogs and websites. Many of its products have been recognized with German and American awards including Parents’ Choice Foundation, National Parenting Center, Creative Child, and Dr. Toy. HABA received Best Toys of the Year recognition from the TODAY Show Toy Test, and has been featured in national magazines such as American Baby, Baby Talk, Fit Pregnancy, Parenting, Parents and Working Mother.

For more details, visit HABA’s informational website at www.HABAusa.com