US fur­ni­ture maker gears up for global push

China Daily (Canada) - - ACROSSAMERICA - By JACK FREIFELDER in New York jack­freifelder@chi­nadai­lyusa.com

Fur­ni­ture maker Nova Life­Style Inc’s re­cent list­ing on the NAS­DAQ Global Mar­ket is the first step to­ward bet­ter sales in China and other in­ter­na­tional mar­kets, ac­cord­ing to the com­pany’s pres­i­dent.

Tawny Lam said the Jan 10 list­ing was a “very ex­cit­ing mo­ment” for the Com­merce, Cal­i­for­nia-based com­pany.

“The process of ap­ply­ing to the NAS­DAQ was some­thing we planned in the last six to eight months,” Lam said Wed­nes­day in an in­ter­view with China Daily. “It’s a great start to the year to be rec­og­nized, and get­ting on that plat­form sets a very good tone.”

Jan 17 was the first day of trad­ing for Nova on the NAS­DAQ ex­change, but the com­pany’s shares have been pub­licly traded on the Over-The­Counter Bul­letin Board (OTCBB) since the sum­mer of 2011.

The OTCBB is a trad­ing ser­vice of­fered by the Fi­nan­cial In­dus­try Reg­u­la­tory Author­ity (FINRA) for com­pa­nies that have not listed stock with a na­tional se­cu­ri­ties ex­change.

Since Nova’s es­tab­lish­ment in 2003, the com­pany has set up more than 100 fran­chise stores in China car­ry­ing its prod­ucts. The com­pany, which both de­signs and man­u­fac­tures fur­ni­ture, has es­tab­lished dis­tinct brands to tar­get mid­dle and up­per-mid­dle class con­sumers in the US, China and Europe, among other lo­ca­tions through­out the world.

In 2012, Nova saw rev­enue climb 54 per­cent to $66.3 mil­lion from $43.2 mil­lion in the pre­vi­ous year, when more than a quar­ter of the com­pany’s busi­ness was in China.

China was the sec­ond-largest mar­ket for Nova in 2011, com­ing in at 26 per­cent, slightly ahead of Euro­pean sales at 22 per­cent. The leading mar­ket re­mains the US, which ac­counts for nearly half, 46 per­cent, of Nova’s sales.

Lam said one of Nova’s pri­mary goals is ex­pand­ing e-com­merce sales in the com­pany’s main mar­kets.

Fur­ni­ture e-com­merce sales in the US and China last year rose 18.5 per­cent and 60 per­cent, re­spec­tively, ac­cord­ing to a Feb 5 cor­po­rate pre­sen­ta­tion on the Nova com­pany web­site.

“It’s a big trend in China now,” Lam told China Daily. “We wanted to get into the plat­form of do­ing In­ter­net busi­ness and we’d like to be the first to cap­ture that sec­tor of de­mand. E-com­merce is a bil­lion dol­lar in­dus­try, so why not fur­ni­ture?”

Nova is not the only US fur­ni­ture com­pany look­ing to in­crease sales in China.

Bloomberg Busi­nessweek re­ported on Jan 14 that Wis­con­sin-based Ash­ley Fur­ni­ture Home­Store opened its sec­ond re­tail store in the south­ern city of Suzhou, Jiangsu prov­ince, in De­cem­ber.

Ash­ley Fur­ni­ture — the top-sell­ing fur­ni­ture brand in the world — opened its first su­per­store in May 2012 with a four-floor show­room near Shang­hai’s Zhong­shan Park, a des­ig­nated commercial zone where high-end res­i­den­tial build­ings and shop­ping out­lets are in am­ple sup­ply.

Paul Dotta, Ash­ley Fur­ni­ture’s vice-pres­i­dent of In­ter­na­tional Busi­ness, said the dif­fer­ence be­tween the US and Chi­nese mar­kets boils down to things “we don’t of­fer in the US”.

“The Ash­ley Fur­ni­ture iden­tity in China will be dif­fer­ent than the one we’ve built in the US,” Dotta said in a Jan­uary in­ter­view with Bloomberg. “When you come to China, the mid­dle class is very dif­fer­ent from the mid­dle class in the US. Your prod­uct has to change, and not just your phys­i­cal prod­uct.”

Nova and Ash­ley may face sim­i­lar mar­ket con­di­tions, but Lam does not re­ally see the two as com­peti­tors.

“We are on a dif­fer­ent path than Ash­ley be­cause we have a fo­cus on con­tem­po­rary fur­nish­ings ver­sus more tra­di­tional fur­ni­ture like Ash­ley’s,” Lam said. “Ash­ley isn’t re­ally a com­peti­tor; if any­thing we ac­tu­ally com­ple­ment one an­other.”

Lam said that be­yond get­ting listed on NAS­DAQ, Nova has “a lot more work to be done”.

“There is a de­mand in China and we in­tend to fill it,” he said. “Now we can con­tinue pro­duc­tion to help build a brand in China. There’s a lot of val­i­da­tion in get­ting to trade on the big­ger floor, but we cer­tainly think this is just the be­gin­ning.”

PRO­VIDED TO CHINA DAILY BY NOVA LIFE­STYLE INC

Fol­low­ing fur­ni­ture maker Nova Life­Style Inc’s list­ing on the NAS­DAQ on Jan 17, mem­bers of the com­pany, in­clud­ing Pres­i­dent Tawny Lam (cen­ter, in red), cel­e­brate with a toast at Nova’s head­quar­ters in Com­merce, Cal­i­for­nia. Since Nova’s es­tab­lish­ment in 2003, the com­pany has es­tab­lished more than 100 fran­chise stores in China.

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