North-American expansion strategy of the Belgian children’s goods company Noukie’s

Noukies SA, at the time known as Amtoys, was founded in 1992 and won the award “Company of the year” in 2007, issued by Ernst & Young Belgium. Noukies SA launched its brand, Noukie’s, in 1996. Today, the company has a revenue of over €20 million and operates through B2B (wholesale), and B2C through their own stores and E-commerce platform. USA was one of the most promising growth markets for the company before the crisis of 2007-2008. Together with their previous distributor, they managed to reach a revenue of approximately $1.500.000 in one year, based on solely soft toys and nursery products. The financial difficulties leading up to the financial crisis of 2007-2008 led to the decision of temporarily shutting down American operations. The succeeding years were dedicated to growing priority markets such as Belgium and France, but as the economy recovered, the US became more attractive again. The US has been operated by a small French distributor during the past few years, selling European children’s clothing, mainly to the East Coast. During the past 2 years, Noukie’s has put more efforts into helping the distributor grow. This attempt proved to be successful, leading to an interest in taking the market to the next level. The problem with the current set-up is that it does not leverage the recent increased popularity on the US market. The current distributor is operating in a way that makes further growth difficult; they are based in France and only visit the US a few times per year. During my time at the company, I encountered large retailers that where interested in Noukie’s products. Due to logistics reasons, a deal was however never made, as they required the possibility to source the goods directly from the US and not import them from Europe. The reason why a change of distribution has yet not happened is because the current moderate revenue from the US, makes an expansion strategy, with large initial capital requirement, risky. This paper will provide research on the available expansion strategies based on an evaluation of the company’s current financial state. With that information, the management of the firm will be able to make an educated decision for the future strategy of the North-American market.