Trunki - Reshoring, Copycats and Losses

The company behind Trunki is reported to have experienced a significant decline in profitability, according to this article in the Telegraph.

We've been looking at Trunki during our BUSS4 CPD briefings on UK manufacturing. The popular ride-on suitcase for young children first came to everyone's attention when founder Rob Law was rejected in the Dragon's Den. Undeterred, Law pushed ahead and secured distribution with high profile retailers in the UK. Since then over 2 million Trunks have been sold.

Trunki was in the news in 2012 when it announced that it was reshoring part of its production from China back to the UK.

When the UK manufacturer that Trunki had selected for its reshored production was put into administration, Rob Law bought it in order to secure supply.

The Telegraph article suggests that, despite a strong rise in revenues (from £6.0m in 2012 to £8.1 in 2013), Trunki has moved from a profit of around £750k to a loss of over £1m. Part of this is explained by heavy investment in new product development. However, it sounds like Trunki is also struggling to protect its valuable intellectual property in China.

Rob Law is quoted as saying:

“As we have become successful, we've seen an increase in copycats. It’s a huge issue for us. We’re still figuring out a strategy for China, and how to respond to the copycats”.

Reference is made to a competitor product - Kiddee Case - which Trunki is claiming has infringed the distinctive Trunki design. A headache for Trunki, but a great example for business students of the importance of protecting design.