A family-run company that specializes in making custom English saddles for women, Schleese Saddlery has trotted steadily to the forefront of an international industry without every relying on distributors or retailers.
Rather, all of its sales are direct to the end user, with Schleese’s long-lived, one-off products running to $7,000 or more. And despite the fact that the 30-employee outfit—which ranked 98th on the 2014 PROFIT/Chatelaine Women’s 100—focuses on a niche within a niche within a niche, it can still bring in $5 million to $10 million in revenues every year, 70% of which come from outside Canada.
Sabine Schleese, who with her husband Jochen founded the Holland Landing, Ont., firm in 1986, still marvels at the fact that something so specialized can still produce impressive sales. But she also understands an important detail in the psychology of the contemporary high-end consumer. “People want custom-made goods.” Commodities, increasingly, are falling out of favour.
Sign up for PROFIT’s Trade Tipsheets for useful, proven, free tips for cracking foreign markets!
Schleese’s story, however, begins with a very different insight: Canadian-born Sabine and her husband Jochen, a German master saddler, moved to Canada to start a firm making saddles that wouldn’t harm horses or their riders.
In recent decades, women accounted for the fastest-growing segment of the market, with demand driven by competitive riders participating in dressage events. For centuries, saddles were made by men, for men, and often, in recent generations, with little concern about the well-being of the horse. An off-the-rack saddle, Schleese says, can cripple a horse by pinching vertebrae or deforming shoulder muscles. Women who rode a lot on saddles made for men, she adds, could find themselves suffering from a range of health problems, such as lower back pain and bladder disorders. “We say riding shouldn’t hurt,” Schleese explains. “It shouldn’t hurt you, it shouldn’t hurt the horse.”
Schleese was a classic bootstrapped business: The couple started it by selling a valuable event horse and buying a small inventory of 30 saddles. They set up a tiny workshop at a riding farm, trading up from 100 sq.-ft to 400 sq.-ft and finally opening a 5,000 facility in Stouffville, Ont. In 1991, the company took advantage of a federal export program to establish a saddling facility in Buffalo.
But they hit on their innovative sales model shortly afterwards. Instead of setting up facilities in the U.S., they began to recruit a network of saddlers and veterinarians, trainers and equine therapists who could promote Schleese’s saddles to their clients for a commission. The company, in turn, would began offering educational workshops and clinics, for a modest fee, where they’d share some of the physiological benefits of custom-fit saddles and offer a diagnostic assessment of a rider’s gear. The presentations are also geared at existing customers, who can bring in their saddles to be adjusted.
As part of its pitch, the company explains to potential customers that the so-called “net present value” of a $7,000 saddle is actually less than the all-in cost of using an ill-fitting one—expenses that include frequent vet bills, replacement saddles and even the costs associated with the premature death of the animal due to saddle-related health problems. Saddles, Sabine says, “maintain their value.”
Schleese now has a Las Vegas office, but it is registered to operate in 44 states, through a network of 250 representatives. “We’ve got a very visible presence,” she says. “We were the first ones to go and measure the horse and rider.”
READ: Why You Need to Consider Brazil »
In 2005, having established a strong market position in North America, the Schleeses decided to expand farther afield. Europe was a natural choice, and they set up a saddlery operation in Germany, which, Sabine says, is the mecca for this kind of equestrian product. For that reason, they only made the move when felt the company was ready. “For us to be able to sell back to Germany would have been a major coup.”
They also decided to establish a presence in Brazil, on the suggestion of a customer. The country has a large equestrian community. What’s more, Sao Paolo has no fewer than 11 veterinarian colleges, which meant a large network of prospective representatives.
But while Schleese has devoted a lot of effort running its education sessions, Sabine says, the firm has struggled to establish a beachhead. Brazil imposes a 45% import duty on saddles, and domestic rules require the Schleeses to find a local partner who will have a controlling stake in a local division. Sabine also points out that the income disparities are huge in Brazil, and the country’s wealthy residents are often in the U.S. As she points out, it seemed to make more sense to sell to those Brazilian customers while they were in the U.S. instead of trying to overcome the bureaucratic obstacles to establishing a local division.
Brazil, Sabine says, may prove to be a hurdle too high, but the company is now actively looking to establish a presence in eleven other European nations, as well as Dubai, South Africa and Turkey. “This is a concept we’ve perpetuated all over the world,” she observes. “We still do it on a one-to-one basis.”