Japanese retail giant in U.S.
Clint Engel -- Furniture Today, January 21, 2014
La Palma, Calif. - Japanese home furnishing giant Nitori has opened two stores in Southern California, the first phase of a plan to open 100 showrooms in the United States in five years.
The company, which did more than $3.3 billion in sales last year, according to its website, opened Aki-Home stores in Fullerton and Tustin, Calif., in October - 20,000- to 30,000-square-foot showrooms that feature a mix of living room, dining room, home office and other furniture as well as shelving and accessories from pillows and duvet covers to kitchenware.
Most of the products initially introduced here came from Asian sources serving Nitori's 301 stores in Japan and 16 in Taiwan, goods that are primarily designed by a Nitori team in Japan.
Among the domestic sources, though, is Simmons upholstery, and the retailer will be adjusting and adding to its mix here over time as it learns more about the wants of the U.S. consumer, said David Finch, who led operations during the initial store rollout and now serves as manager of marketing and merchandising for Nitori USA.
Before joining Aki-Home, Finch was a manager for Disney Parks, coordinating the "guest experience" at both the attractions and stores in Disneyland and California Adventure Park. He has also been a buyer and divisional manager for Macy's and helped open the first Container Store in Los Angeles.
|David Finch of Nitori USA
addresses a crowd during a
preview party at the retailer’s
store in Tustin, Calif.|
Finch declined to disclose sales or sales projections for the new Aki-Home, but said the initial response has been "wonderful."
"Certain key items we sold out of very quickly," he said. "A lot of it has to do with the very functional design we brought from Japan. I think a lot of people are buying smaller homes and they are lacking space. They love the uniqueness of it, the clean lines of the furniture and the way we merchandise."
Finch added that Aki-Home also is putting a big focus on customer service and making sure its salespeople can easily transition customers from furniture to the related accessories and vice versa. Furniture accounts for about 50% of selling space and sales, he said.
Nitori, founded by Japanese businessman Akio Nitori, and its new Aki-Home, have been referred to in the media as the "Ikea of Japan," largely because of Nitori's similar range of merchandise and its mid-century modern looks that are similar to Ikea's Scandinavian designs.
|Bedding suppliers to the new Aki-Home include Simmons and
Englander, and the retailer is developing its own private label.
Queen sets start at $699.|
Akio Nitori visited the United States in 1972. His small furniture business in Japan, opened just a few years before, was struggling and he wanted to see how furniture retail was done in this country, Finch said.
"He was just astounded how different it was," he said. "Retail merchandising for home furnishings in Japan at that time was so different. Nothing matched. It was really poor quality and the pricing was expensive. So what he saw here really gave him ideas of what he could bring back to Japan, and that really started the success he's enjoyed with his company ever since."
Nitori's vision and merchandising have evolved over the years, but Finch said it has been his dream to return to the United States, as Nitori says, "to pay back the teacher" by bringing his designs and merchandising to the market.
Nitori's goal is to open 100 stores here over five years. Finch wouldn't disclose other markets it is considering, but said the focus for now is on California and that three to five more showrooms will open later this year in the Orange County-Los Angeles metro area.
"We want to make sure we have a strong presence in California before going to another metro area," he said. "We have a great real estate team looking for the right mix of demographics for our product. If something pops up tomorrow in San Diego, we would certainly consider it."
The retailer will look for showrooms in the 30,000- to 35,000-square-foot range. That's a bit smaller than many of its stores in Japan, "but seems to be the right amount of space we need to tell our story," Finch said.
Aki-Home primarily displays furniture in room settings, such as a dining room group, showcased adjacent to related dining room accessories.
|Popular itiems at
this banquette ($459)
and innovative table
($299) that features a
pneumatic lift to adjust
the top from coffeetable
height to dining
The retailer is aiming for a broad middle consumer base with sofas ranging from $299 to about $1,500.
While the stores have done well out of the gate, Finch said the retailer is learning how to improve sales from its first few months here.
"A lot of our product did really well," he said. "Some were kind of unique and a little harder to explain to the U.S. customer," due to cultural differences. In Japan, for instance, slippers are very important, so much so that there are whole furniture organization systems made just for slippers and pajamas. While that kind of product did sell here during the opening, Finch said it wasn't the hit it would be in Japan.
So Aki-Home will be looking to change out some items as well as make a few packaging and signage changes. It also will broaden the furniture assortment to include some larger scale items. In the United States, the retailer is shopping the markets in High Point, Las Vegas and Atlanta, he said.
In addition to the first two stores, Aki-Home has a roughly 100,000-square-foot distribution center in the City of Industry, Calif., equipped to handle its early expansion plan. The retailer currently employs about 300 people.
Its website, Aki-Home.com, is informational for now, but Finch said the company hopes to push into e-commerce later this year.
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