Case Study

Baby Bunting

Australia's leading baby goods retailer.

"TDM has been with me every step of the way since I joined Baby Bunting as CEO. TDM brings a true global perspective to our business and their input on a range of financial, people, and strategic matters has been invaluable.’’


Baby Bunting (ASX:BBN) is Australia’s leading baby goods retailer currently operating over 70 stores across Australia.

In 2008, the baby goods industry was highly fragmented and without a dominant category leader. At the time, Baby Bunting operated 6 stores, all based in Victoria, and had an annual turnover of $40 million.

TDM invested with this opportunity to create Australia’s dominant baby goods retailer. We served on the board from June 2009 until March 2017. After becoming the largest shareholder in 2011 (46%), TDM helped guide the leadership team through their IPO on the ASX in October 2015.

Over the 11 years of partnership, TDM was very active in its support, and this took many forms; from recruiting numerous executives and board members, developing appropriate short and long-term management incentive plans, providing rigour in shareholder communications and capital management strategy, as well as M&A advice. Importantly, TDM was very hands-on in preparing the business for IPO.

TDM retained 82% of its shareholding at IPO. By August 2018, when TDM fully exited its investment, TDM’s return including dividends was approximately 9x initial investment.


While on the board, Baby Bunting fulfilled its vision of becoming a ‘category killer’ in the Australian market – the business is now 20 times larger than its nearest competitor. During our investment period Baby Bunting grew from 6 stores to 50, while revenue grew from $40 million to over $360 million.

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People and Culture

The Chairman, founder and executive team identified an opportunity to bring on an equity partner that shared their vision of category dominance. Given TDM’s undefined investment horizon, they saw TDM as a partner they could trust to help them make decisions that were in the long-term best interests of the business.

Importantly, there was real alignment from the leadership on their emphasis on how people and culture could be a clear and sustainable long-term competitive advantage in their vision for a national roll out. The management team also understood the value of scaling the systems and processes effectively to ensure Baby Bunting was set up for success as a public company.

Competitive Advantage

Our primary framework for assessing competitive advantage is Hamilton Helmer’s 7 Powers. Find further details in our Four Pillars Framework.

Like all dominant retailers, brand is at the heart of its success. Customers deeply understand the Baby Bunting proposition – the best quality goods, at the best possible price, every day. This brand strength allowed the business to execute its private label and exclusive distributor strategy.

Straight from the ‘big box’ playbook, scale allowed for prices to consistently be lowered, attracting more volume and only further feeding the virtuous cycle.

As the business continued to grow, many brands became exclusive to Baby Bunting, only adding to the customer proposition. By 2018, exclusive and private label made up over 20% of revenue, up from zero when TDM first invested.




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