Fur-flying Fun

Fur-flying Fun

By Isabelle Gan

Contributing Writer

In a warehouse tucked away in an industrial park near where Fruitville Road and Interstate 75 intersect, furry little toy animals dangle from mesh crates stacked 8 feet high. Julian Parry reaches for one of the stuffed animals.

"Let me see your phone," he says, as he fits what looks like a palm-sized, chubby puppy onto a cell phone. "There, now you've got one of these," he says with a flourish, holding up the brown fur-covered phone. It's a fashion statement that Parry, president and founder of Sarasota-based Fun Friends, hopes will turn into a worldwide fad among teen-age girls.

"It's one of those little ideas where you ask, 'Why didn't I think of this?'" says Tim Mihm, one of Parry's two partners.

Fun Friends manufactures and sells more than 60 characters, furry little puppies, kittens, frogs, cows, teddy bears that sport cute names like Romeo, Cuddles and Cheeser. The products sell for $9.99 apiece and fit all cell phones, their elastic backs stretching to cradle either bar-style or flip phones.

"Our customers are what we call in their tweens, teen-aged girls or girls in their early 20s," says Parry, 35. The company has especially focused on marketing the cell-phone covers as a hip, must-have accessory. On the company Web site, funfriends.com, Avril Lavigne, a young punk rock star, poses with her pink Fun Friend named Oinky the pig.

Now in their sixth year, the Fun Friends entrepreneurs are hoping they're finally seeing the start of something that could be as big as the Beanie Babies craze of the 1990s.

Internet retail sales have grown astronomically, Parry says. He estimates receiving at least 100 orders a day through the company Web site this year, compared to two or three a day last year. Sales from wholesale orders have doubled compared to 2004. Since 2003, the company has experienced a minimum of 300% increase in sales each year. By the end of this year, Fun Friends will have generated $1.6 million in gross revenues.

Two keys to Fun Friends' growth have been countless trade shows, where Parry hawks his furry friends, and China, where the company's products are manufactured.

It took a few years perfecting the process and countless trade show promotions before the furry cell phone accessory gathered enough attention. Parry's marketing problems were compounded by the public's ignorance of what his products were.

"Nothing was really sold the first three years, everything was given away to get buyers to understand the concept," he says. "Unless buyers saw it on their own phone, it didn't work." he says.

Just like the Beanie Babies phenomenon, the partners rely on fad mentality to keep spreading the word about their product. That's why they continue to market to school-age girls, giving away freebies at school events and charities.

And if recent correspondence from customers can be an indicator, the partners' marketing efforts might just have made Fun Friends into the next accessory trend for that demographic.

"I'll never stop using your product," a Fun Friends fan wrote in an e-mail in October. "When I walk around school with my pig purse/cell phone pocket, everyone keeps asking me where I got it from, (I'M POPULAR AGAIN). It's great."

"It's catching on," says Charles Larson, Parry's other partner. "It's finally to the point where people are starting to get it now. The phones have been ringing."

Parry doesn't claim to be the first to have thought of stuffed animals for cell phone covers, just the first to think of marketing them. In fact, it took a trip to his native South Africa to get the inspiration. "There was a fisherman who had a toy stuffed lobster made into a cell phone cover," he recalls. "He had cut it up himself to fit his phone."

Soon after, in 1999, Parry started Fun Friends out of the garage of his Siesta Key home. In honor of the South African prototype, one of the first characters was a red lobster.

The company struggled from the start. The first few years were an expensive experimental stage. Parry took equity out of his home, charged credit cards and borrowed from friends and family to manufacture the products through a Korean design company that in turn subcontracted a factory in China. "I was losing $50,000, then another $250,000 ... I was constantly going down, down, down into the hole," he says. He sold $485 worth of products the first year.

But Parry says he knew he had a good idea and wouldn't give up.

"My dad thought I was crazy from Day One," he recalls. Parry's father, Laurence Parry, an entrepreneur himself, was vice president of Holiday Inn's worldwide franchising and owner of nearly a dozen hotels of his own. One of his properties included the former Holiday Inn in downtown Sarasota, at the corner of Tamiami Trail and Gulfstream Boulevard, site of what is soon to be a luxury high-rise. The elder Parry sold the site for $15 million.

"If anything," the younger Parry says, "probably one of my biggest motivations came from the fact that he gave me so much grief over the last years."

In 2002, Parry decided to move Fun Friends out of his garage and into an industrial park near the interstate. Around the same time, he asked Larson, an old college roommate from the University of Central Florida, to join him.

Then Parry and Larson refocused their strategy. "The products were too expensive to make," says Larson, 37. "We were selling them for $20 apiece, and we didn't have that much control over the quality."

As a result, the two decided to take the manufacturing process into their own hands and eventually stop relying on their Korean middle man.

What followed was two years of traveling, trips to China that resembled back packing adventures rather than business jaunts. "That was the beginning of the horrors of manufacturing. We didn't know anything at first," says Parry, who along with Larson, had earned a hotel and restaurant management degree from UCF.

To make the task harder, they encountered language barriers and China's rough and relatively primitive business atmosphere. Faxes were never received. Factories couldn't be tracked down. Often, the two found themselves in old taxi cabs riding over pothole-ridden roads looking for addresses and people who seemed to elude them.

"I don't think we could have done it if we didn't get along so well," Larson says.

He and Parry eventually sampled the work of more than 60 Chinese factories before settling on three. In addition, the two hired a China-based manager to oversee quality control especially for Fun Friends. The first few production lines were still problematic, with a 60% defect rate.

Finally, in mid-2003, the company received its first stock of high quality products with imperfections on no more than 2% of the goods. At the same time, the company received its biggest break when 7-Eleven ordered one of Fun Friends' characters to accompany a promotional wireless phone package it was selling for AT&T. By 2004, Fun Friends had produced 300,000 cell phone covers, double the previous year and generated $634,000 in sales.

At the end of that year, Parry recruited another friend, Tim Mihm, a high school pal from Cardinal Mooney High School, to be his third partner. Mihm, 36, brought to the company his 10-year background in financial management with Merrill Lynch.

The company then shifted its focus on more sophisticated marketing strategies to communicate its products more effectively. One of the biggest improvements was a display box complete with color photographs that showed how the products fit onto a cell phone. The boxes are now standard packages for Fun Friends' wholesale customers who in turn use it to display the cell phone covers at retail stores.

Sales for 2005 surpassed the previous year, with the company advertising its products in various national publications for the first time. Fun Friends also introduced a new crop of furry covers that stretch to accessorize iPods, staplers and computer mice.

"We can see next year as being very aggressive," Larson says, adding that projected sales will be at $6 million by the end of 2006.

For one thing, the company is going international, selling its products to distributors in Australia, New Zealand, Mexico, the Dominican Republic and some countries in South America.

Domestically, the partners want to expand their marketing reach by licensing college team mascots and producing miniature versions in the form of furry cell phone covers.

The future opportunities seem endless for the three entrepreneurs. For Parry, who has tried his hand at various business ventures, Fun Friends represents a personal triumph.

"After four attempts of trying to be entrepreneurial nothing had paid off," he says, referring to different businesses he has started after graduating from college, including owning a chain of Denny's restaurants and a health-care company in Virginia and an assisted living company in North Carolina.

"The final attempt, Fun Friends, was and is the hardest of all, but the most rewarding. Looking back, I'm very happy for the hard times weathered and think the future will bring highly appreciated profits, which will be put to good use."