Stephen Sy: Going for the golden taps
GOLDEN TAPS aren’t just for Arab sheikhs. Selfmade entrepreneur Stephen Diypico Sy believes there’s a market that will take to Dornbracht’s 22k to 24k goldplated faucets worth P150,000.
From selling Coleman jugs, his company, Focus Global Inc., has evolved into a high-end lifestyle store that offers status symbol brands.
Professional kitchen appliances, luxury brass taps, floating water closets, feathery orthopedic mattresses and timeless furniture are competing for space in the shrinking, 600 sqm at the showroom in Mandaluyong. Still, the place has brought good luck to the company for 22 years.
Likewise, a smaller showroom at The Residences in Greenbelt is serving the market that doesn’t want to cross Edsa.
Sy, Focus Global Inc. founder and president, says that a fivestory, 5,000 sqm showroom at Bonifacio Global City will be completed next year. It will include 1,000 sqm floor for Ethan Allan furniture ("In the States, the smallest Ethan Allan showroom is 1,200 sqm,’ says Sy), and separate floors for the kitchen brands—Sub-Zero, Wolf, SieMatic, Miele, Tempur beds and Dornbracht for fixtures and Villeroy & Boch for ceramics.
The convenience demanded by the market and the bright economic outlook are the driving forces behind the expansion of Focus Global Inc.
“You can’t sell furniture without displaying them. The catalogue is not enough. If you come and ask for something, and I say, ‘It’s in the box in the warehouse.’ Will you wait? I need floor area. I thought it was a good time for us,” says Sy.
Designed for harried customers with no time to browse through several stores, Focus Global Inc. sells easily matched furniture and appliances for every room. With higher incomes, these status-conscious shoppers also have a taste for art and travel. Hence, they have been exposed to these brands in their trips.
Construction boom
With the real estate boom, the company has tapped anoth- er market—property developers. Focus Global Inc. is furnishing the 80 units for the luxury condominium Discovery Primea along Ayala Avenue. Every unit will be equipped with SubZero refrigerators, Wolf ranges, SieMatic kitchen systems and Miele kitchens and appliances. Likewise, Ayala Suites on top of the future Shangri-la at The Fort ordered SieMatic kitchen fittings for its units. (Ayala Suites is the most exclusive of Ayala Land’s projects. All its units were sold in one day and the customer must be a previous owner of an Ayala property.)
Focus Global Inc. recently introduced Dornbracht, considered the Rolls Royce of kitchen and bathroom taps and Villeroy & Boch porcelain water closets, sinks and tubs.
Target market
Dornbracht prides itself for brass (not stainless steel, take note) shower heads and faucets. Its kitchen sinks, made of premium grade stainless steel, are equipped with sound pads, so you don’t hear water splashing. Too, people are willing to spend P150,000 to P250,000 for a quiet kitchen sink.
Focus Global Inc. will soon launch Dornbracht’s sensory shower system which creates mood through lighting, temperature, water volume, mist and fragrance. Sy is confident that there’s a market whowill appreciate a fantasy system which fetches P1.2 million.
In bathrooms, Sy cites a trend in wall-mounted water closets as a space saver. For a Villeroy & Boch throne worth P150,000, the customer is paying for spe- cial ceramic that is resistant to staining and dirt. The classic styles start at P20,000.
Focus Global’s market has been attracting mostly nesting baby boomers and Gen Xers. They will buy a P300,000 adjustable Tempur bed for their parents or invest in a P500,000- Sub-Zero refrigerator to keep their food fresher for longer periods.
Starting out
On retail sales, Sy’s reply is conservative. “If you have a good product, people will invest. Customer service is important. They expect immediate action. If you call, they want you to be there in five minutes. The people who buy our products are demanding. Sales have been growing, but it’s hard to say, may be 10 to 30 percent.”
Sales were sluggish during the global recession in 2009.
“Even if people had the money, they didn’t want to spend. There was the wait-and-see attitude,” says Sy.
Nonetheless, the company has always been bullish about sales and has invested in marketing. The advertisements of its brands not only promise to make life easier but also more luxurious for the consumer.
Given the niche market, the marketing approach is targeted. The customers are engaged to understand the brand as they ought to.
Cooking demos and wine tasting cocktails at the showrooms aim to promote the appliances. Lectures on entertaining are held at the Ethan Allen dining room settings. The launch of the bathroom brands brought in architects and interior designers.
For Tempur, the advertising rests on testimonials.
Even the mid-range brands have their own promotions. Every year, Sy organizes a camping trip using all the Coleman products. He says people sign up in the department stores.
It was a slow but steady climb to the top for Sy. After earning an industrial engineering degree from the University of the Philippines, he worked for SGV &Co. and the family business of trading goods in Iligan. He then pursued his master’s in Management at the Stanford Business School.
In 1991, Coleman’s regional sales manager, dissatisfied with the output of the local agent, was looking for a stronger distributor. Through a mutual friend who was selling Coleman generators, Sy met the regional sales manager and said he was willing to take up the challenge. Sy’s mother was apprehensive about Coleman jugs. She said he wouldn’t get repeat customers because they were durable. Nonetheless, Coleman was a hit. In the early ’90s, the jugs were used by most students. Sy looked beyond jugs and expanded to outdoor gear such as coolers, tents and flashlights. Coleman holds 70 percent of the market share in outdoor gear, jugs included, says Sy.
“We’ve been advertising heavily from the start. We keep seven percent of our sales for advertising. It’s critical to the business.”
Buoyed by the success of Coleman, Sy wrote to Kitchenaid, specializing in countertop appliances and utensils. He told the principals that Focus Global Inc. could retail and advertise unlike its distributor who merely traded Kitchenaid and kept them in the warehouse.
Sy then ventured into Oster, a brand famous for small kitchen appliances. “The blender is the king,” he declares. Today, Coleman, Kitchenaid and Oster are still doing brisk business in department stores.
Fluke
The expansion to bigger-ticket items was a fluke. Sy and his wife, Lolita, Focus Global Inc.’s executive vice-president, were looking for furniture for their new home. While travelling in California, Sy saw an advertisement for Ethan Allan furniture.
Visiting the nearest showroom, he was enamored by the European-inspired furniture with symmetrical lines, rounded edges and monochromatic and soft colors, done with choice materials. He immediately applied for distributorship and travelled to Connecticut to have lunch with Ethan Allan’s chair, president and CEO Farouq Kathwari.
When Sy returned, he sent his warehouse’s floor plan to the principals who designed the layout. It was transformed to the present showroom.
For Sub-Zero, Sy applied for distributorship. The boom in entertaining at home and the popularity of cooking shows spurred the demand for beautiful kitchens and top-end appliances. As Sub-Zero’s sales started to grow, Sy noticed that something was lacking.
“You need a cabinet around a refrigerator. I told my wife we’re selling a patty without the bun,” says Sy. He observed that the sales of the local distributor for SieMatic kitchen systems were lethargic. He then proposed to the German principals that he could improve the business through proper retail and advertising.
Under Focus Global Inc., sales grew from selling two kitchen systems a year to nearly two systems a week.
Coincidence
As its reputation spread, Focus Global Inc. got an offer from Miele to distribute its kitchen system and appliances.
The venture into Tempur was also a coincidence. A friend, who suffered sleep apnea, was told by his doctor to get the orthopaedic bed called Tempur. After ordering the bed from the States, Sy’s friend suggested Sy to import the brand.
During a trip to the States, Sy and his wife tried the pillow and decided to write to the Danish principals. Upon their return to Manila, Sy was surprised to receive an email from Tempur requesting a meeting. Focus Global Inc. was short-listed by the US Embassy’s commercial section to be one of the candidates to distribute Tempur.
The principals met with the Sys in Manila and asked him to sample their product. Sy insisted on paying for the Tempur bed and have it shipped. But the principals wanted an immediate reply so they flew in the Tempur bed from Denmark at no extra cost.
Sy says the venture to the bathroom lines was the next step. He observed that the local distributor for Villeroy & Boch had other businesses that the latter couldn’t focus on building the brand. Then again, Sy sought the European principals.
“When you see a quality product, it’s worth the bet,” says Sy.