Your Business: Eureka moment happened at home

Melissa Cheals launched a girls' collection in October and has global plans for her clothing company. Photo / Anthony Phelps

When former bank executive Melissa Cheals was at home with a new baby, she began researching ideas for her own company.

"My father has always been self-employed and entrepreneurial - with his own business for over 20 years," she says.

Cheals' background was in management, marketing and product development. She was the GlobalPlus brand manager for the first 3 years of its life, instrumental in growing the brand into the leading credit card in the market. She went on to be head of marketing for BNZ Credit Cards before leaving to have children.

The businesswoman and her husband Nik, also a senior bank executive, looked at 20 different business ideas, including childcare, a finance company, convenience foods, and also children's clothing. Cheals conducted market research with parents, and found there was a gap for boys' clothing larger than size four.

In May 2007, Cheals launched the Eureka Clothing business online, also setting up offices, a shop and a distribution centre in Wellington's Vivian St.

A girls' collection was launched in October this year and last month Eureka opened its second store in Thorndon which has had a "huge" month. The new store at the Gateway Capital Retail Centre sits near its strongest competition, Pumpkin Patch and JK Kids.

"When you go in the store there is a basketball hoop and a Play- Station. When kids go there, it's their place. We know their names, if they want help, then we are there."

The entrepreneur has international aspirations. With some online business in Australia, an expansion across the Tasman is planned in three years. But first, Cheals has her sights on two or three stores in Auckland, one in Christchurch and possibly one in Hamilton. She also sees a good market in Canada and the US. The turnover in the next 12 months with just two stores and the online business will be well over $1 million.

The online business represents 30-35 per cent of business. "People like to touch and feel the quality of the clothing and will then shop online," says Cheals.

Eureka clothes are extremely hardy. "We make the clothing very tough," says Cheals. We put double knees in the jeans, it's very high quality denim, an 11.5oz weight." The merino clothing range is manufactured in New Zealand, but the bulk is made with suppliers in China.

A big part of the multi-channel retailer's research and development is done with the kids. At the beginning of every year, Eureka puts together its development squad. The 2010 squad is made up of 22 girls and 21 boys. "We have fit and wear testings which will give us feedback."

The three-year-old company has a board, all of whom are shareholders, although the Cheals remain majority owners.

They have attracted some impressive business names including John Jacob, co-founder of Tile Trends, Kelly Nicholls, formerly of Colorado, and Max Bowyer, former operations manager for BP. Advertising so far has been largely via word of mouth. Eureka advertises to the database of over 7000 families and does some guerrilla marketing.

Cheals wants to build Eureka as a brand of clothing label which "gives kids good self esteem, that they are confident in the world. Clothing is an important part of that, it makes you value your appearance".

"What we will do is move more into kids' health, fitness and diet," she says.

"We want to be doing more than just giving them something to put on their backs."