Magnussen eyes 100 China stores
Thomas Russell -- Furniture Today, March 4, 2011
DONGGUAN, China — As part of a plan to reach top income earners in the growing China market, case goods specialist Magnussen Home Furnishings plans to open 100 stores in China over the next three years.
To facilitate this strategy, it is opening two new trade showrooms at the March 16- 20 3F International Famous Furniture Fair in Dongguan. These showrooms will help retail buyers see what the franchise stores would look like in the 1,900- and 3,000-square-foot footprints that represent the smallest and largest of the planned stores.
The company first showed at the twice-a-year 3F event last March. Along with doubling the size of its temporary space, it is leasing a larger, 6,000-square-foot permanent space across from the main show venue. It has a five-year lease on both spaces.
Company CEO Richard Magnussen said the expanded area will help the company be better prepared to welcome visitors at the March 16-20 show.
While the China market is the main target audience, the company also has seen many customers from Russia, Southeast Asia and the Middle East at the 3F show. "It truly is an international market," Magnussen said.
Last year's event drew some 38,000 domestic and international visitors on the first day alone, he said, noting that 
Magnussen’s new permanent showroom space in Dongguan, China, includes this vignette. In addition to showcasing product, the space serves as a model for the company’s new American Dream Home store format.
the permanent space will be open year round to show new and existing product and also handle global sales and marketing efforts aimed at buyers from around the world.
The expanded showroom presence also will help the company grow its sales outside North America from the current mid-single digits to about 30% of revenues, Magnussen expects.
"We believe the market is right for us to market ourselves significantly internationally," he said.
In Dongguan, the company will show a mix of bedroom, dining room, occasional and upholstery. The product is the same as it sells in North America, although bed sizes may be adjusted for the Chinese market.
The company also will use its showrooms to promote its American Dream Home retail concept in China. It is partnering with Richard Zhu, president of China-based Matrix Marketing, to oversee franchising, sales and marketing in China.
Nathan Cressman, Magnussen's vice president of sales and marketing, will head up global product development.
The stores will be in cities with populations of 5 million or more, Magnussen said. He added that product will hit medium to upper price points and will reach top income earners, including parents that purchase furniture for their newly married children.
Buyers will be able to receive goods from Magnussen Home's 400,000-square-foot distribution center in Vietnam.
"Our Asian distribution center in Vietnam is central to shipping mixed containers to China, Korea and also many other countries including those in North America in 10 days from the receipt of order," Magnussen said. "Our excellence in supply chain management will play a large role in giving international customers a wide variety of product selection with an incredible quick-ship program to maximize their turns and limit their risk of buying too much inventory in one style."
Magnussen said the global sales initiative doesn't mean the company is ignoring the North American market. It plans to grow its sales in North America in the double digits each year over the next three years.
"Our management team believes this global approach is risk management of a local economy from a given region, while leveraging the consumer market growth in countries like China, India and many others," he said. "Also, more volume allows us to strengthen our value and service to all customers worldwide. Volume moves volume."
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