The founder of bean bag maker Bazaar Group hopes to double the firm’s workforce within three years following the launch of its second manufacturing site in Germany.
The Cramlington company secured a a significant seven-figure finance deal with HSBC a year after a £10m private equity investment from Comhar Capital, which acquired a majority share in the business, paving the way for European expansion. Now the firm has opened a new 35,000 sqft hub in Hamburg in expansion that comes 17 years ago after founders Mark and Jayne Dolder initially spotted a gap in the market to reinvent the humble bean bag.
Bazaar Group’s head office continues to operate from Cramlington, where its bean bags are top performers on ecommerce platforms including Amazon, eBay and Wayfair. However, the company had been keen to open on the continent to rejuvenate European sales which took a hit after Brexit.
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Mr Dolder, the firm’s CEO, says Hamburg marks the first stage in its expansion and that, subject to its performance, more jobs could soon be created. The firm has 10 staff in the German city, with plans to increase to around 30 within the coming months, and 60 staff in Cramlington.
The company produces and ships thousands of bean bags around the UK and further afield every year, and Mr Dolder estimates it will be manufacturing half a million a year within three years across the two sites. Within three years Mr Dolder says, subject to performance, he hopes to double headcount across the business, to more than 150 people.
Mr Dolder said: “We did do particularly well in Europe prior to Brexit, which caused delays in delivery times and added bureaucratic complexity and significant costs, so our European business had declined.
“As part of Comhar’s investment in the business it was always clearly understood by all that a major step forward could be taken by the territorial play, and being centred in Europe.It then became a question of whereabouts to settle in Europe. We looked at density of population and historial demand for our products, and by establishing in Hamburg it allows you to access a market of 164 million people in a 48 hour delivery window.”
The firm made a number of site visits before sealing the deal for the Hamburg factory, having come up against competition to secure industrial space from other global companies. He said delays in securing the site tightened timeframes, giving Bazaar Group just 10 weeks to have the factory up and running, ready for its busiest time of the year ahead of Christmas.
He said: “Getting hold of commercial property in Germany was particularly challenging, so that caused us some time delay and we were particularly keen to be trading for the peak time this year, in the run up to Christmas.
“We had to install plant, stock and racking and production facilities in a short period of time, so complexity came from time. We were also having to recruit good people with nothing to show them, which was quite interesting as well.
“I am delighted with the way the team has negotiated the post-Brexit landscape and overcome several complex issues to secure an excellent site and commence trading in an extremely short timeframe. This achievement stands us in good stead to capitalise on further strategic opportunities to fuel our high growth ambitions.”
Over the last week soft furnishings firm, ScS has warned of waning consumer confidence, with people becoming more reticent to make big ticket purchases such as three-piece suites.
But Mr Dolder said that positioned Bazaar Group well, adding: “We found in 2009 post crash we did particularly well. We actually sell really sophisticated products with an internal structure the same quality fabric as top quality sofas and last just as long, if not longer. That said, they are viewed in a different way to structured furniture but through the lens of the consumer that has far less disposable income they would have had some short time ago, our products are really good value, really flexible and functional for the home, garden and potentially office as well.
“So for that reason, we are positive about the future.”
Craig Wilkinson, managing director of Comhar Capital, said: “Since its formation, Bazaar Group has developed a strong following from consumers on the Continent. Our new manufacturing and fulfilment facility in Hamburg will enable us to better serve their needs and at the same time boost our efforts to grow and nurture new consumer relationships. This is a hugely significant and very exciting step for the business.”
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