Business was always on Peter Levi’s mind from his commerce days at the University of Melbourne to the time spent at Myer Melbourne, where over an eight-year period he honed his retail skills. During his time with Myer Peter developed an excellent understanding of market trends, so much so that when he left the company he felt ready to open his own business.
“I looked around to buy a shop, because I knew retail and had moved around enough in Myer to know it didn’t really matter what I sold, because if you understand retailing, you can apply those principles to any product.”
After much thought Peter and his wife Jenny bought a Griselda toy shop in Melbourne’s Brighton and subsequently opened another store in the leafy bayside suburb of Hampton. The decision to move into toys was measured. “I wanted to be in an industry that was heavily gift-oriented and that didn’t depend on Melbourne’s weather. I didn’t want to be in a high fashion industry, but I did want enough fashion to keep it interesting for us and our customers. I also wanted to be in an industry where there were major brands that would promote the product and lead people through my doors.”
Daunted at first, he brought in a minority silent partner. “I was still fairly young and probably didn’t have the confidence to run the business entirely on my own. He was involved for the early years, but I bought him out in the mid ’80s.”
A kingdom for my toys
The buying group Toy Kingdom, which started at the same time Peter bought his first shop, gave Peter the opportunity to network with like-minded businesses, initially in Victoria, then other states. “We combined together, we would go and see suppliers together,” says Peter of the power of the network. “I learned a lot from them. I’ve always been a great believer in observing others and how they conduct themselves in businesses and picking out the best and leaving out the worst aspects.” With Toy Kingdom, Peter joined the board of directors, became overseas buyer, put promotional catalogues together and learned about importing. Meanwhile, he was completing a Graduate Diploma in Marketing at Monash University.
All the above elements had helped to grow his business. The real turning point however came in 1986, when a close friend, who owned a men’s giftware business dealing in smokers’ requisites, was approached by a Taiwanese supplier to import coloured pipe-cleaners and pompoms for kids to play with. Not being in the children’s market he approached Peter and the pair developed a kit that children could create and build their own toys from. The idea appealed to KMart and thus Colorific was born as part of The Alexander Group. Bulk bags of pipe-cleaners and pompoms were brought in for school suppliers. There were two streams to the business: the retail product and the school product.
By early 1990 Colorific had grown to the point where it was time to “get serious or get out”, so Peter put his hand up to take it on from his friend. Peter approached another director of Toy Kingdom, Wayne Brander to partner him in the venture and the pair took over the business.
“I felt that there was a big opportunity in that area,” says Peter. “Craft was one of those categories in toys that hadn’t received much attention from the big players like Mattel. It was a very bitsy category where I felt there was opportunity to build a national brand.”
Peter and Wayne took on the stock and the business, which was turning over a small $200,000 per annum, not enough to make a profit, according to Peter. The pair drew no salary, but put systems in place that would help to turn things around and rapidly develop the product range. The systems were different from those of the toy stores because, as Peter says, “I do believe that a lot of business is common sense, but common sense isn’t that common. We felt we could apply a lot of our market knowledge, but we needed to quickly develop systems for a wholesale business, which was quite different.”
Product development was new. Peter had done some development at Myer, so had some idea, but the most important thing was to put financial systems into place. “I still to this day believe that any successful business is built around a skeleton of having really strict financial control and excellent financial reporting.”
The banks loved the fact that this new company was totally open and diligent and the toy retailers loved the fact that both Peter and Wayne had retail experience in the industry, so Colorific was off to a flying start, but they had to produce whatever toys they could to make money. One of the first products to be developed was a set of Jacks, made from lamb knucklebones that sold for $3.99, a lot more expensive than the Chinese models that were then available. Yet the product was Australian made, a better size, well-presented and sold straight away. They are still among Colorific’s bestsellers, selling in excess of 50,000 a year for 15 years.
In the first full year of trading, the business more than trebled and Colorific soon became an established name in the toy industry. By 1992 the company had expanded into New Zealand. Then four years ago, being number one in Australia and New Zealand, Colorific tried its hand further across the waters. An International Business Manager was appointed, and Colorific will sell nearly three million products in 40 countries and territories this year.
The five Ps
Behind Colorific’s success is Peter’s business principles, defined by what he calls the four Ps, which all lead to the fifth P – Profit. The first P is People. “We’re very big on developing our own people, nurturing them and having a great culture, that is critical to us. Helping people achieve their life’s ambitions through working at Colorific is very much at the forefront.”
The second P is the Product. Ensuring that they have the right product and knowing what the consumer wants. They have had a miss or two such as ‘Paint a Diva’, but on the whole the product range has been very successful, to the point where they have now secured deals with the AFL and Cricket Australia to supply a revolutionary face painting product in team colours.
P three is about Partnership. “I believe you can never build a business without good external partners – it may be your bank, your accountant, your solicitor, or customers and suppliers. No business is an island.” The fourth P, which Peter has been very blessed with, is Passion. “If you don’t love what you do, you’re not cut out to do it. It’s important to find something you’re good at and have a passion for.”
One thing that Peter has a great deal of passion for is his family, several of whom now work in the business. Eldest son Mark is the Category Manager for the Educational Resources division. Wife Jenny is in charge of the community care program, where the company donates the equivalent of a salary in money or toys to a range of charities chosen by the committee and referred back to the team. Younger son Jonny is also working in the business, having deferred his business study at Monash for a semester. “We’re all involved in the business,” says Peter, “and we see it as a precious family asset, not just somewhere Dad goes to work. It’s an asset that’s important to all of us.”
Peter is unsure whether his sons will succeed him, however he has set up a Family Council, which he believes has helped with a range of issues. “For example, we’ve just signed off on a Values Statement, which is the family values we apply to the business. That’s been ratified by management and adopted as official company policy.” Peter believes the Family Council will keep the kids well-informed of what’s going on in the business and give them the ability to offer their thoughts on what they believe should be done as well. Peter expects the family to play an integral role in furthering the ambitions and reach of the company.
Mark’s focus is to develop the educational products, which currently account for about 15 per cent of the business, to 25 per cent of the business. He has released 50 new products this year alone to the schools’ market in addition to the 50 retail products launched by Colorific.
The fact that Peter’s family works in the business means that work-life balance is working well. “I think our team and non-family members love the attributes that come with being a family business. The fact that we are a very human face, that we are compassionate and show respect and are honest about the things we do, all these values apply to our business and it succeeds not despite, but because of them. I’m a great believer that family businesses have an advantage over non-family businesses. One of the main reasons is the values.”
Reward for effort
Those values have recently been recognised in kind. Having won the FBA’s 2006 First Generation Family Business Award in Victoria, the business recently won the national award as Australian Family Business of the Year – 1st Generation. They also caught the attention of the voting panel for the Melbourne Business Awards and were voted the 2005 Business of the Year. Colorific is also the only family business to win three consecutive Australian Toy Association Toy of the Year awards, bringing home the Australian Developed Toy of the Year again this year. The growth in the last four years in particular has been significant, yet much more can be done. Peter wants Colorifi c to be the number one craft company around the world, and to nurture the other elements of the business to continue its steady growth, as long as the growth is profitable. He also wants to see more kids playing with Colorifi c products “and getting a real buzz out of them – to see them learning.”
When Peter took full control of Colorific upon the retirement of his partner Wayne in 2003, he and his team put in place a plan for expansion, one he could share with his family and the staff members that represent his extended family. He is now reaping the benefits of a close knit family business.