As kids we needed toys. They spurred our imaginations, occupied our days, and generally brought joy to our then simple lives. But our love for them was fickle – we’d obsess over them one day, discard them the next, and soon beg for new ones.
In the world of business this kind of flighty need equates to strong demand, and contrary to popular belief, toys are not made by mythical small-folk in the far north. Toys are a business, and a competitive one at that. Kevin Richer, President of Montreal’s Wooky Entertainment Inc., understands that business because he’s lived it, pretty much since the day he was born.
In truth, it was a few days after he was born that Richer’s mother brought him along to work at the family toy store in Montreal, where he would spend many a day over the next 25 years, absorbing all there is to know about the business.
“I grew up surrounded by toys, so I know them in and out,” says Richer. “But from a business standpoint, I’d say the most important thing I learned was that Canadian sales alone can’t generate the revenue necessary to invest in products that can compete with the Hasbros or Mattels. It became clear that to be successful as a Canadian startup, it would be necessary to explore possibilities outside our borders.”
Wooky is Born
So in 2007 Richer decided to leave the family business, a local toy distributor, and start from scratch with an international vision.
Wooky was born, but Richer insists the name of the company has nothing to do with furry Star Wars giants. Instead he says it was the product of marketing research, which advised that company names should be brief, memorable, and include double letters (like Apple, for example). Richer also wanted a name that meant nothing so it could be used, unchanged, in any language.
His model for Wooky: place considerable resources in R&D to create quality intellectual property (IP), manufacture the products in China, and sell those products through international distributors.
Their focus on IP paid off immediately, as the company quickly became known as manufacturers of trendy and creative toys. It took only two years for their merchandise to be found on the shelves of Toys”R”Us stores in the US.
In 2011 Export Development Canada (EDC) started providing Wooky with accounts receivable insurance (ARI) for their international buyers, which were primarily third-party distributors at the time. ARI protects Wooky in the event that buyers are unable to pay for their orders – a problem that could throw a wrench in the plans of any young company.
Wooky’s insurance roadblock
But as demand for their products ramped up, the insurance they used for some of their larger distributors reached the maximum coverable limit, halting sales. In discussion with EDC, Wooky determined that the best way to continue their growth was to buy out certain distributors, and start selling directly to customers like Toys”R”Us and Wal-Mart.
In doing so they were able to able to spread their risk among a larger number of buyers, which allowed them to access more coverage.
“Wooky had what we would call a good business problem,” says Cathy Beauvais, EDC Account Manager for Wooky. “They had the creative products, the international demand, and the infrastructure to meet that demand all in place; credit insurance was their only roadblock, and that happens to be an area of expertise for us, so we were happy help them with a solution.”
Wooky has continued to trend upwards with this new business model in place. They recently joined into licensing partnerships with Walt Disney (which ironically owns the rights to the Star Wars brand) and also opened their first store in Boston, Massachusetts – the first of many according to Richer. Wooky was also named Toys“R”Us Vendor of the year for 2014.
Their product lines have continued to evolve in order to stay “trend-right,” and today Wooky is very much focused on the Style Me Up line of fashion and cosmetic accessories for tween girls. One brand within that line, Charmazing, has done particularly well and was named one of Toys“R”Us’s Top 15 Toys for Christmas in 2014.
“We’ve gone from zero dollars in sales the first year to $30 million in 2014 so needless to say, it’s been a whirlwind seven years for Wooky,” says Richer. “And with everything going on with the company right now, I believe we’ll hit the $100 million mark within the next five years. Our success to this point can be attributed to our products, but I’d also credit our willingness from the beginning to do business abroad. There really is a world of opportunity out there, it’s just a matter of taking the leap.”