Back in 1989, L.A. furniture-maker Stephen T. Wise went on a sight-seeing trip to Asia. But his lingering impressions were less of the beaches of Thailand or the streets of downtown Tokyo than they were of the region's furniture stores and the buying habits of Asian consumers.
"I could see that they loved American products. But there was no American furniture," Wise recalls. "They were watching our television shows and movies and looking at our magazines. They were coming here and staying in our hotels.
"It seemed obvious to me that there had to be a market for American products," he says.
Wise's hunch appears to be paying off. Eight years later, he has given up on manufacturing, and instead is president and founder of California Furniture Exports which serves as a link between U.S. manufacturers and Asian distributors and retailers.
In addition to acting as the Asian sales staff for American furniture-makers, the Studio City-based company, known as CFX, operates the California Furniture Pavilion each year at the International Furniture Fair, a massive trade show in Tokyo. The company also provides a cargo consolidation service that allows overseas customers to import less-than-container-load orders from their U.S. suppliers.
CFX now represents 17 American producers of furniture, lighting and wall decor about half of which are based in California. Last year, the company logged more than $5 million in sales, and is poised to expand even more as Japan emerges from its economic downturn and the fast-growing Southeast Asian economies lower long-standing trade barriers.
It wasn't easy making the switch from manufacturer to sales agent and exporter. But by the early 1990s, Wise became convinced that he had to do something.
After making bedroom sets and home-entertainment centers at an East L.A. manufacturing plant for two decades, he says the cost of doing business was becoming increasingly high. The Air Quality Management District was getting tougher on the use of solvents and other chemicals, while the cost of worker's compensation insurance was soaring.
What's more, the region had entered a recession that was beginning to take a toll on all manner of manufacturers. "I could see the handwriting on the wall," Wise says.
So he began devoting more of his attention to Asia specifically to Japan, where he traveled on a regular basis, attending trade shows, building relationships with potential customers, and learning how to do business in Asia the hard way.
"I made every imaginable mistake known to man," Wise says of his early days in the Asian marketplace.
At the height of the Southwestern trend in the U.S., for example, he brought over a series of stucco pieces, which evoked little more than baffled curiosity from the Japanese. They tend to prefer solid, wood furniture. He tried his luck with a line of pool tables unaware that the items were far too large to fit in the average Japanese home, which seldom measures more than 1,000 square feet.
Despite such mishaps, Wise became increasingly convinced that there was ample opportunity in Asia. By 1993, he was confident enough to try the venture on a full-time basis. He handed what was left of his manufacturing business, Furniture Profiles, to his son and, at the age of 51, founded CFX with about $100,000 in savings he had accumulated.
The first year was rough. Japan was in the midst of a painful recession, and Wise logged a mere $55,000 in sales. But things began to turn around a year later, when CFX signed a deal to provide American furniture to Mitsokoshi, a high-end Japanese department store chain. Suddenly, dozens of other retailers and distributors began expressing interest.
U.S. customers also came calling. "At first, people thought, 'Nobody is going to buy my furniture in Japan,'" says Wise. "I had to sell the American manufacturer as much as I did Japanese customer."
"The thing with exports is, you might make one sale, but getting that customer to come back is difficult especially if you don't see them," says Tory Adams, president of Deszign Inc., a Torrance-based lighting manufacturer, a 3-1/2-year-old firm which began working with CFX in 1995.
Since then, exports have swelled to 25 percent of total sales and the company has re-thought its business plan to accommodate even more overseas growth.
Wise who makes a 3-10 percent commission on sales travels to Asia four times a year, for four weeks at a time, visiting customers and attending trade shows throughout the region. Japan accounts for about 65 percent of his business, although Thailand has been growing fast, especially since it cut in half the tariff on U.S. furniture imports.
Wise hopes to build CFX by opening a series of offices in Asian capitals, to have a permanent presence in the region. But he admits that making it to the next stage is no slam-dunk. Asia, after all, is no longer a secret to U.S. manufacturers, and a number of competitors have sprung up especially in North Carolina, where the bulk of American furniture is made.
"We're no longer in the pioneering mode," Wise says. "There is a tremendous amount of competition now. In a way, we've created our own Frankenstein."
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