BABY BUSINESS BOOMS
The Times Leader: December 9, 2007

Yes, Virginia, there is a Cyber Monday. If you don't believe, just ask Jack Keifer, president of BabyAge.com in the Hanover Industrial Estates.

"It was flat out incredible," Keifer said this week about the Monday after Thanksgiving, which has been promoted as online retailers' Black Friday. For BabyAge, the buying frenzy was even more impressive because the holiday season traditionally is quiet for the market in infant and youth products.

Keifer said months of planning and some special marketing paid off in a sales increase of more than 200 percent compared to the same day last year.

"We had planned for it," he said. Even so, "it is the most exhilarating feeling."

"Cyber Monday was the best day we ever had in business until yesterday," he said Tuesday. Last Monday was up another 10 percent, with more than 1,800 orders logged from online and telephone customers.

Preparations for this stab at holiday gold included products, people and logistics. BabyAge stocked up on items like play kitchens, doll houses and train tables, historically very good sellers in the fourth quarter, Keifer said.

To move the merchandise, marketing vice president Julie Space produced an online holiday gift guide and ordered some old-fashioned radio and newspaper ads in the company's top markets.

"We went against that (popularity) to propel it further," she said, running ads that referred customers to the BabyAge Web site and toll-free telephone number. She said call volume was noticeably higher as a result.

Keifer said BabyAge has gradually added staff since spring, and rather than hire temporary workers to handle the extra business, full-time employees are putting in overtime. BabyAge is "extraordinarily technologically advanced," he said, which allows employees to be very productive.

For example, only four of the 42 employees are in the call center.
Once a sale is made, orders have to be pulled, packaged and shipped.

"We spent months in our warehouse doing hard-core engineering," Keifer said, to streamline the fulfillment process.
"It's all about driving efficiency," he said.

A Financial Boost

This season's success was made possible in part by a June injection of $3.5 million in venture capital. The funding came from Brook Venture Partners, which started the year with a $100 million pot to be invested in technology companies throughout the Northeast. Investors in the fund include Pennsylvania, Vermont, Maine, two banks, Brooke Private Equity and Green Stamps of America.

The funding allowed BabyAge to bolster inventory and to hire Space and other executive talent that Keifer expects will recharge the company's growth, which he said, "was not substantial this year."

Boosting in-stock items will help avoid lost sales opportunities due to sellouts, which Keifer estimates totaled $17 million in 2006.

The latest investment provides some long-needed breathing space for the company that was started in 1999 with $200,000. Needing more space after spending its first five years in New Jersey, BabyAge moved to a new 50,000 square foot building in 2004. Now, Keifer said, the warehouse is bulging at the seams and he's talking with Mericle Development about expansion within two years.

Keifer, 39, continues to live in Morristown, New Jersey with his wife and two children.

With about $20 million in projected revenue this year, there's plenty of room for BabyAge to grow in the $8 billion children's "gear" market that is the company's focus. The biggest player is Babies R Us, but Keifer said it and other majors like Wal-Mart emphasize low prices rather than quality and cachet, such as the $249 Recaro sport car seat listed on the BabyAge Web site.

Keifer said the venture fund's involvement adds credibility that also may allow BabyAge to grow by acquisition. An attempt three years ago to buy a supplier was unsuccessful, but he may try that route again.

"There is an abundance of mom-and-pop manufacturers out there," he said, and one or two look particularly attractive. "They would fit well in one of the three brands that we've established."

Space said BabyAge also is developing internal growth strategies.

"We are really focused on our baby registry," she said, "so we can start that relationship (with parents and grandparents) off early." Beyond suggesting products, the feature will provide information and resources to moms as children grow.

BabyAge and other technology-driven companies are vulnerable to a shortage of qualified workers, Keifer said, so he's been working with area colleges to help them develop appropriate classes.

"In the longer run, Northeastern Pennsylvania needs to develop more hard-care technologists," he said, for the region to be rebranded from its current warehouse/distribution reputation to a technological hotbed.

BANKING ON BABIES
What: BabyAge.com
Where: Hanover Industrial Estates
What they do: Online retailer of baby and youth "gear" as well as toys
Annual sales: $20 million
Leadership: Jack Keifer, President and CEO
Employees: 42 full-time
Avg. salary: $40,000

Contact: www.BabyAge.com
Ron Bartizek
Times Leader business editor, may be reached at 970-7157
rbartizek@timesleader.com

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