Having a child changes your life in many ways, but for Andrea McGinty, impending motherhood inspired her to give birth to a new business. When she was pregnant with her first child and surfing the Web for baby products, she discovered that there weren’t many unique items. What’s more, the goods that did interest her were from overseas companies. So she decided to start importing baby merchandise and selling it online and, eventually, by catalog.
After investing an initial $800,000 and spending more than a year amassing merchandise, McGinty launched Baby Dagny (named for her now-two-year-old daughter) online in December. The Website is now getting 7,000-7,500 unique visitors a day. The average order size is up from $55 to $75-$80, McGinty says, thanks to “an effort to add more new products and beef up the average order online.” Prices range from $15 to $169.
Palm Desert, CA-based Baby Dagny’s edge is offering items that combine form and function. For instance, McGinty found an Australian vendor that makes a baby wrap with UV protection so that you don’t need to put sunscreen on a wriggling child. The company is also sourcing products from such countries as Belgium, the Netherlands, Sweden, Denmark, Spain, and New Zealand. But Baby Dagny is finding most of its merchandise in the U.K. “I wish we weren’t — the exchange rate with the pound is awful!” McGinty laments.
Baby Dagny ensures that its unique product stays unique by requiring merchandise vendors to sign two-year contracts promising exclusivity to the company. The merchant imports test-level orders, and for items that make the cut, it starts with 100-1,000 units. “We have 90 days from placing the first order to the second shipment,” McGinty says.
The company’s first 68-page catalog is scheduled to drop in July. A print catalog “is the only way you can build a brand, McGinty says, noting that consumers have come to expect print catalogs from upscale Web merchants. Baby Dagny plans to mail 50,000 copies “to moms in their third and fourth trimester,” she says, even though renting those specific selects is expensive. McGinty plans to mail at least quarterly. The company, which now employs 12 people, has already outgrown its combined corporate office/distribution center. It’s also on track to exceed McGinty’s initial expectations of $1.4 million in sales its first year.
IT’S JUST (A) LAUNCH
Many people would be scared off by the costs and risks of starting a catalog/Web business today. But McGinty is not one to be put off by challenges. After a broken engagement thrust her back into the dismal dating scene, McGinty was inspired to start It’s Just Lunch, a Chicago-based dating service for business professionals, in 1991. The lunch dating service spread to other major markets and went national and then international.
The success of It’s Just Lunch illustrates McGinty’s ability to turn lemons into lemonade; it also explains how she was able to fund fledging Baby Dagny. After ditching the Chicago winters for the California desert, she and her husband, Daniel Dolan, sold It’s Just Lunch to New York-based venture capital firm Riverside Investment Group three years ago for $50 million.
On this February day, much of the U.S. is in a deep freeze, but it’s sunny and about 70 degrees in the Palm Springs area. Sitting in the foyer of her opulent new home in a gated community in Ranch Mirage, CA, McGinty is a slender blonde whose passion for her new venture is apparent. She brings the real Baby Dagny in for a quick hello. “Feel her bathrobe — isn’t that soft?” McGinty urges. The robe, naturally a Baby Dagny item, is made from bamboo, she notes, which is organic, absorbent, and earth-friendly.
Although Baby Dagny’s business model seems a far cry from that of It’s Just Lunch, McGinty is no stranger to retail. The oldest of six children, she grew up in the business, as her father was president of the Highbees Co., an Ohio department store chain later acquired by Dillard’s. McGinty had been a marketing manager for a jewelry manufacturer before founding It’s Just Lunch.
To launch Baby Dagny, McGinty used upscale gifts catalog/Web merchant RedEnvelope as a model. But Baby Dagny may soon have something RedEnvelope does not: retail. McGinty is planning to open a store in West Los Angeles later this year.
Procuring unique product
Baby Dagny sources most of its merchandise at gift fairs in Europe. “We don’t do any of the big U.S. shows — all of those manufacturers already have big distribution in the U.S.,” says founder Andrea McGinty. “If I can find something at an obscure show in Sweden, no one else is going to have it.” Among her discoveries is a company specializing in handmade baby hats in Cologne, Germany, that’s been in business since 1842.
Not that every product has been a home run. McGinty found an accessory in New Zealand consisting of a strap that goes around your waist with a hump that’s meant to serve as a sort of chair for a baby balanced on your hip. A few Baby Dagny staffers tested the product “and nearly threw out their pelvic bones,” she laughs.
— MD