Moms crafted a baby-booming business

Seven years ago, Julie Dix and Danielle Ayotte were stay-at-home moms, shuttling kids to soccer practice and setting up play dates. Now, the two run a multimillion-dollar company called Taggies that is rapidly spreading into a global enterprise.

And it all got started with a child's blanket.

Dix's son rubbed the satin edging of his favorite blanket with his fingers so much as a toddler that he wore the material off. So when Dix, a former elementary school teacher, went to repair the blanket, she decided to sew looped, satin tags all around the edges. It was a hit with her son, who loved having something to focus on while seeking comfort from his blanket. And the first Taggie was born.

Since meeting in a play group in 1999, Dix and Ayotte have developed Taggies to include a diverse product line sold online, through upscale catalogs such as Red Envelope and at boutique children's stores throughout the USA and in several other countries. Products include not just blankets, but everything from books to soft blocks to stuffed toys, items geared toward infants and toddlers, all featuring the signature satin tags.

The blankets, still the most popular items, sell for $20 to $65, depending on size. Early next year, a Taggies clothing line will make its debut in Dillard's department stores, where entire Taggies sections will be found, and in other shops.

Neither Dix nor Ayotte had any business experience before starting Taggies, but experience isn't everything. Backed by a patent that protects the brand, the company's revenue has doubled every year since it was founded in 1999. This year revenue at the privately held company is expected to be $4 million to $6 million.

For Dix, 40, and Ayotte, 37, two married moms of three kids each, Taggies has been a labor of love, with some long days and big learning curves. Dressed casually, completing each other's sentences and laughing often, the two appear to fit the room parent mold more than that of high-paced entrepreneurs. In fact, they say through it all, they always have made sure that family comes first.

"We both know that's a priority," Ayotte says, meeting in the company's modest headquarters off of Main Street in Spencer, Mass., about an hour from Boston.

Says Dix, "Fortunately, we were both in the same boat."

Getting outside help

Although she wasn't selling them, Dix would sometimes make the blankets for friends in the 1990s. Ayotte first saw one of Dix's blankets when a mutual friend gave her one as a gift when her third child, Rachel, was born.

"I thought it was the best thing ever created," says Ayotte, a language and literature major. "It was the only thing that kept my daughter happy."

Ayotte's husband, David, an entrepreneur with a Pepperidge Farm franchise, nudged Ayotte to approach Dix about selling the blankets. The two met at a play group soon after, and Ayotte discussed the idea of going into business. They decided to give it a try.

They first started selling their blankets at area craft fairs in 2000. At each fair they sold their entire inventory in less than two hours.

Ayotte had a friend whose husband, Tim Anderson, was a graphic designer. They approached him about developing a brand. He came up with the "Taggies" name and created the company logo. Later, he designed the copyrighted fabrics and tags and website and continues to act as what he calls the "Taggies brand police."

The two women then met with Andy Bjork, a sales agent they met through Ayotte's husband's accountant. At first, Bjork didn't seem to get it, Dix and Ayotte recall. But knowing he had a young daughter, they gave him a sample.

"They gave me some horrendous, hideous-looking thing, compared to what they are making now," says Bjork, now the senior brand manager for Taggies.

But his daughter still loved it, and he took on Taggies.

"It opened up a whole new beast for us," Dix says of signing up with Bjork. After Bjork introduced Dix and Ayotte to other agents, Taggies were quickly being sold throughout the country in the huge baby products market. Approximately $4.6 billion will be spent on infant, toddler and preschool toys in 2006, estimates Packaged Facts, a research company.

Taggies blankets have been sold at Reverie Baby in Santa Rosa, Calif., since the shop opened in 2003, says Nancy Dupont, assistant to the owner. "It's easy to sell," she says. "Once they find out they can buy a whole blanket of tags, they go crazy about it."

Pam Gallant's daughter, Genevieve, received a Taggie blanket from her grandmother when she was 2 months old. Genevieve took to the blanket and even now, at age 3, sleeps with it every night.

"She just loves her Taggie blankie," says Gallant, 39, of Washington, D.C. Gallant now gives a Taggie whenever a friend has a baby.

The product's appeal hasn't been the sole reason for Taggies' success. Bjork says a main factor has been that Dix and Ayotte were never afraid to ask questions, and they surrounded themselves with people willing to help.

"A lot of time entrepreneurial ventures hit a ceiling. And they hit a ceiling when people don't get outside help," Bjork says. "They've been very good about listening to a team of good advisers."

Family comes first

Although sales were rising rapidly, Ayotte and Dix at first were operating the business out of their homes. But trying to work, including taking orders, packing and shipping products, while entertaining, feeding and diapering the kids at the same time was a challenge. Their kids are very close in age - Dix's are now 8, 10 and 13, and Ayotte's are 8, 10 and 12.

One time when a fleece salesman was visiting, they sent the kids outside to play. When Dix and Ayotte checked on the kids, they saw them washing the salesman's car. With bubbles.

Their contacts "understood we were moms first," Dix says. Later, when they opened offices, the younger kids came to work with them. They had a kids' room with a toy chest. Sometimes before the youngest were school-age, they would help count blankets.

Sipping water out of matching mugs, Dix and Ayotte describe their relationship as their second marriages. They share an office, as they always have, so they can easily bounce ideas off each other.

They say what has made them work as a team is that they complement each other when it comes to skills. But they also share a key belief - that family comes first. That means attending the kids' soccer games or taking them to piano lessons. And they have decided that for now, no BlackBerrys or phones with ready e-mail access. When they are with family, for the most part, that is family time.

That doesn't mean they work short days. Dix has a habit of working late at night, after the kids go to bed, while Ayotte often logs in well before her family is awake.

"It's very hard to turn the off switch," Ayotte says.

While they admit to butting heads on more than one occasion, Dix and Ayotte agree that the wisest decision they have made at Taggies was to patent the idea.

Dix and Ayotte argued their case in person before the Patent and Trademark Office, and after 2½ years, not an uncommon wait, they received the patent.

These days, that patent comes in handy as Taggie knockoffs abound, particularly on online auction site eBay. Taggies goes after the copycats in part because they are concerned fake Taggies won't have the same safety standards as the real thing, and they don't want to see any kids injured. Plus, "It's our baby," Ayotte says.

Scholastic comes calling

The biggest break for Taggies came in 2003 when Scholastic Books called. When their receptionist first said Scholastic was on the line, Dix says she assumed she had forgotten to turn in her daughter's book order at school.

Instead, Scholastic said it wanted to set up a licensing agreement, in which Scholastic would produce Taggies books. Dix remembers holding up a piece of paper for Ayotte to read that said, "Oh my God. They want to make a book."

Scholastic has now sold 1.5 million Taggies books since 2003, adding a new book each year.

"It couldn't have gone any better," says Ken Geist, editor of the Taggies books at Scholastic, who came up with the idea for the books after a colleague saw a Taggies blanket at a baby shower.

Taggies now has three other licensing agreements with companies that make toys, stuffed animals and, soon, clothing. Taggies receives a royalty for every sale. Dix and Ayotte declined to discuss how big the royalty is.

Both women say it's satisfying to see kids with Taggies on airplanes or in malls or to receive letters from moms of Taggies fans. One mother wrote saying the blanket her son received through Taggies' charity program helped him get through chemotherapy.

For Dix, she's still amazed that what started out as a blanket for her son has had such widespread appeal. "I'm still flabbergasted that other kids like the tag," she says.