Flexsteel expanding Asian galleries
By Thomas Russell -- Furniture Today, January 26, 2004
DUBUQUE, Iowa — Thanks to a burgeoning middle class and a growing acceptance of American styles, upholstery maker Flexsteel is expanding its in-store galleries in Asia.
In March, a Flexsteel gallery is set to open in South Korea, and the operator of a gallery in Indonesia will open a second gallery to showcase motion furniture. By mid-2004, a third new gallery is expected to open in Surabaya, Indonesia.
The Asian galleries are roughly 5,000 square feet and carry a variety of Flexsteel products, including upholstery, motion furniture, home theater furniture and occasional and accent furniture.
The first gallery opened in Jakarta, Indonesia, in February 2002 and is called the Malinda Gallery. Run by Andy Lim, it has annual sales of about $2.5 million, said Stephen Wise, president of California Furniture Exports, the agency that helps Flexsteel and the operators locate, design and launch the galleries.
Wise said Lim probably knows as much about the Flexsteel line as anyone, "and in a very short time has become very successful."
Special orders have been strong, representing about 35% of the Malinda Gallery's sales. Delivery times for those goods average about 10 weeks.
"Special orders and the shortening of lead times are helping our business over there," said Chip Piekenbrock, Flexsteel's director of retail development. Leather and motion upholstery also have done well, with about two to three containers a month shipped in 2003, he said.
The Malinda Gallery shares space with BenchCraft and Berkline motion upholstery. Based on the success of the motion upholstery, Lim is moving it and home theater products into a 5,000-square-foot space on another floor of the Malinda Gallery in March.
Members of Lim's family will run the gallery planned for Surabaya, which could be as large as 6,000 square feet, Wise said.
The South Korea gallery will occupy 5,000 square feet of a new 30,000-square-foot store called Mirage Interiors. It is located in Ilsan, a city about 50 miles north of Seoul. The gallery will be run by Billy and Calvin Choe, Korean brothers who emigrated to the United States in 1984.
The brothers also are opening a 5,000-square-foot BenchCraft and Berkline gallery in the same store.
Wise said South Korea and Indonesia are different markets. In Indonesia, a small segment of the population has homes between 5,000 and 15,000 square feet, and want the comfort, style and prestige of American furniture.
South Koreans have much smaller homes and apartments, but the country has a growing middle class with higher incomes than the middle class in Indonesia.
Wise did not give projections for the South Korean gallery, but believes it could have a stronger volume than the Indonesia gallery.
Flexsteel officials also are optimistic. "The wealth that has come into the country is allowing people to buy better furniture," Piekenbrock said.
Three or four more galleries could open in 2005.
