Bomb blast spurs diversification at Four Hands
By Thomas Russell -- Furniture Today, January 26, 2004
AUSTIN, Texas — AUSTIN, Texas — Few furniture companies have been prompted to change strategies because of a nuclear bomb blast. But that's what happened with case goods importer Four Hands.
About five years ago, India tested a nuclear bomb close to the Pakistan border. At the time, Four Hands had a sourcing partner in the nearby city of Jodhpur, India, producing most of its occasional products. When the bomb went off, the plant manager reportedly felt the ground shake.
For Brett Hatton, Four Hands founder and chief executive officer, it was a loud wake-up call.
"Ninety percent of my business was coming out of one city, and it looked like that city was about to be annihilated," Hatton said. "I was terrified. I had some very good accounts with repeat business. I wanted to make sure that if we lost our factory, we had a fallback position."
Some three years ago, India and Pakistan threatened to go to war. Fortunately, that didn't happen, and India remains a key source country for Four Hands. But the turmoil convinced Hatton, who launched the company in 1995, that he needed more sourcing partners.
After the nuclear test, he went on a 30-day trip to eight Asian countries, which led to the company's sourcing of product from manufacturers in China, Indonesia, Thailand and the Philippines. Today, Four Hands sources from a dozen nations.
"India now represents about 60% of our business," Hatton said. "Although India has expanded and grown tremendously, it's a smaller piece of the pie. Indonesia and China are coming on strong, and so is Eastern Europe."
Other factors also have prompted diversification.
Originally, most of Four Hands' business was in dining tables, console tables and coffee tables made from antique doors and trunks, and antique reproduction tables. But doors and trunks became harder and harder to find, and the company needed other products. With its new sourcing partners, Four Hands' line expanded greatly.
Now, leather upholstery, oak dining tables and other case goods come out of Romania, Poland and the Czech Republic. Four Hands also imports chests and leather upholstery from China and occasional chairs from Indonesia. A wide range of accessories and rugs come from the Philippines, Egypt, Nepal, Holland and France.
It all adds up to a look Four Hands calls Ethnic Chic, designed to appeal to a diverse range of consumers from ages 25 to 55.
"We put together a whole look for our retailers," said Chief Operating Officer Matthew Briggs. "A lot of retailers will import Brazilian product or a Chilean product. They specialize in one country. We have so many global sources that we can provide a lifestyle look as opposed to just a (single) ethnic look."
The strategy has worked.
Sales have risen dramatically over the past few years, gaining the company a place on Inc. magazine's prestigious INC 500 list three years in a row. In 2002, sales were $11.7 million, up from $8.2 million in 2001 and $1.1 million in 1997. This year, sales are expected to reach $18.5 million.
Among the retailers helping sustain that growth are Gabberts, C.S. Wo & Sons, and Crate & Barrel.
Gabberts has carried the line for less than a year, but the upscale, metro Minneapolis-based retailer has been pleased with the results, particularly because the line is helping broaden the store's appeal to younger buyers.
"Four Hands just has an attitude of exploration and excitement," said Gabberts' Lifestyle Director Ann Wimmer. "It's a look that doesn't come out of a cookie-cutter box. It's just something we wanted and they do it so well."
The range of price points also appeals to a wide consumer base. Some pieces are affordable enough for those decorating a first home. Other pieces are high end, stylish enough for those who can afford a second home.
For instance, a solid-wood dining table retails for $1,100 to $1,200, while a leather sofa in the line retails at $1,400.
"Four Hands helps us build strength and fashion at an affordable value," Wimmer said.
"They are positioning themselves for some real growth," said Steven Denkins, Gabberts vice president and general merchandise manager.
To prepare for growth, Four Hands recently moved into a new 70,000-square-foot headquarters in Austin and expects to expand its work force from 50 to about 60 in the next year.
And Four Hands plans to continue offering innovative products and designs.
"I feel that a lot of people come up with a few successful products and then rest on their laurels," Hatton said. "That's not a way to grow your business."
