Industry leaders tell secrets of success
June 2, 2012-- Furniture Today,
Pedro Capo of Miami Gardens, Fla.-based El Dorado Furniture, Satya Tiwari of area rug and home accent source Surya, and Bruce Cochrane of Lincolnton Furniture offered their business philosophies and thoughts on what is giving them a leg up as the economy continues its slow recovery.
For Capo and El Dorado, it is the lessons and love of father Manuel Capo, who died about three years ago, but not without setting the family on course for success in good times and bad.
Pedro Capo told attendees of his father's successful furniture business in Cuba during the 1950s, which was taken away with the rise of Castro. Members of the Capo family escaped Cuba in small boat named El Dorado.
Capo said his father taught the family to avoid debt and to establish controls and systems that now make it possible for the retailer to open stores without having a family member in place to run them.
El Dorado's newest location is coming to Florida's Gulf Coast in Fort Myers next year, and as with all of its stores, the Capos are in control as debt free owners of their property.
"We're constantly remodeling stores," Capo added. "It's a challenge, but you know who we remodel stores for? Not the customer, but the employees. When you enter a store, they're exciting. Employees are excited, so when the customer is greeted, they're excited."
Most people tout sales growth, but Capo said his father taught the family that profit is what's important. Over the last 25 years, El Dorado as seen double-digit net profits every year - even in 2008 and 2009, when Florida was one of the states hardest hit by the housing crash.
Through it all, El Dorado profited without laying off a single employee or cutting benefits.
Manuel Capo said the most difficult thing he dealt with was "keeping the family together and keeping the family working together," Pedro Capo recalled. Today all seven brothers are partners in the business and several of their 25 children also are involved.
"We fight, we cry, we argue," Capo said, but he added that it's always with respect for each other, and followed with kisses and hugs and lunch together - every day.
In December 2003, Satya Tiwari's father, Surya - the founder of the company bearing his name - came to visit him in New York, where the younger Tiwari was working outside the family business.
Surya would do about $2.5 million in sales that year and wasn't really making much of a statement in the industry, said Satya Tiwari, who joined the company in April 2004 as vice president of sales. Since then, he said, Surya's sales have grown by double digits every year and this year are on track to reach $55 million.
"We do not want to be a rug company. We want to be an accessories company," said Tiwari, 35, who was named president of Surya in 2006.
Surya, which donates a percentage of its profit to charitable causes, now buys product from a dozen countries and tells customers they are helping move people out of poverty, "helping them to work hard."
Tiwari said Surya is more than a business. "We would not have accomplished all the things we have today without passion," he added.
Indeed, "be passionate" is at the top of a list of philosophical points that Tiwari said Surya has followed to make that powerful statement it was missing back in 2003. Others include "be bold, have fun and be transparent" - not just with customers but with employees and vendor partners, he said.
"We listen to our customers," Tiwari said, adding that all of the sales tools Surya has brought to market have come from listening to its customers and to the salespeople who deal directly with consumers.
Surya also strives to be innovative, he said. "We don't have anything written down that we can't change."
And Tiwari said he believes you cannot overspend on marketing today.
"Unseen, untold, unsold," he said. "We live by these three words. We want to make sure our brand is shown everywhere."
Bruce Cochrane, formerly of Cochrane Furniture and now president and CEO of the new domestic case goods producer Lincolnton Furniture in North Carolina, said people ask if he's crazy for getting back into domestic furniture manufacturing.
"But I think the timing is right," he told his peers here. When Cochrane started in the business in 1974, there were many great American manufacturers. Then came the "stampede to China," and the U.S. lost a $50 billion industry "in a very short period of time," he said.
Pedro Capo of retailer El Dorado Furniture, Miami Gardens, Fla., tells how his company managed to maintain its profitability during the Tiwari Cochrane recession.
"We gave up," he said, conceding that he played a role in the shift to Asia.
So why try bringing it back now? For starters, Cochrane said China is facing a serious labor issue. He saw signs of it starting in 2006 when a few factories were hanging out red banners that indicated they were hiring. By 2008, Cochrane said, "red banners were up everywhere."
Wages are rising and consumerism is growing in China, which "is going to be buying almost everything they can make and everything everyone else can makes," he said.
"We're really at the tip of the iceberg right now," he said. China is struggling to produce in a timely manner. There are quality issues. Prices have gone up and "the exchange rate is problematic."
But the worst thing is customers can't get an answer on when their goods will be arriving, he said.
Some importers and distributors will find a way to navigate these hazards, but Cochrane has decided to make a go of it with a technologically advanced U.S. production facility - a former Cochrane plant in Lincolnton, N.C. - that has brought U.S. jobs back to some very grateful, hardworking people who were losing hope.
Cochrane contended Lincolnton "makes the best constructed furniture in the world" using machines that rout, saw, sand and drill all at one time. There's a green story, too, as all the finishes are water-based and its solid woods come from certified sustainable resources.
Years ago Cochrane used to make 2,000 chairs at a time, but the days of runs like that are over. Now, Lincolnton can cut two to five pieces in a run because the machines it's using can be changed over in seconds, not an hour, and without the human operator having to touch them.
"That's a game changer," he said.
Related Content By Author
FT/tv: Furniture/Today sets finance workshop for March