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Knitting profits
by
Heather B. Hayes
Virginia Business
March
2005
Linda
Krag never planned to be a businesswoman. But this former
high school teacher stumbled across an entrepreneurial
opportunity while trying to replace her daughter’s
favorite knitting kit. (It was lost during a move).
After a lengthy search for the kit’s maker, Denise
Interchangeable Needles, Krag finally reached the owners
by phone, only to learn that the company had gone out
of production. “They only had a few parts left,”
she says. “But right before I hung up, the woman
said, ‘By the way, if you know of anyone who might
be interested, the company is for sale.’”
Krag, a longtime knitter who owns the same knitting
kit, jumped at the chance. She borrowed $100,000 to
buy the company’s name and molds and secured the
consulting services of the former owner. Enlisting the
help of her husband and two daughters, she began operations
in late 2002. Since then, Denise Interchangeable Needles,
now based in Batesville, has been riding the renewed
worldwide popularity of knitting. The company has sold
nearly 32,000 kits (at a retail price of $48 each) to
knitters in the United States, Canada and 27 other countries.
“We paid back the original loan in just 18 months,”
Krag says proudly, adding that the company had gross
revenues of more than $415,000 last year.
The key to this success is the distinctiveness of the
company’s sole product. Housed in a hard, book-sized
carrying case, the Denise kit contains 10 pairs of lightweight
plastic needle heads and flexible cords. Using an unusual
interlocking design, these components allow knitters
to build straight and circular needles of differing
sizes and lengths. “There are literally hundreds
of possibilities out of one kit,” Krag says.
Buyers thus far have included beginners and lifelong
knitters. The kit is especially attractive to those
who travel frequently because, unlike standard needles,
Denise needles are airport security friendly.
The Krags sell their product directly to customers through
the Web and to specialized knitting shops in the U.S.,
Canada and a few foreign countries. Their goal is to
expand domestically and internationally by selling at
knitting boutiques. “There are millions of knitters
in this country alone, so we’ve just barely begun
to tap the market,” Krag says. It seems the teacher
has definitely mastered a few business lessons.
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