L.A. furniture makers are shaping up to ship out.

L.A. furniture makers are shaping up to ship out

Manufacturers seem certain they will get a boost in '91 from exports to Japan

Japan, the world's third-largest buyer of home and office furnishings, is a market Southland manufacturers will crack in 1991, if the plans of Stephen Wise, founder and president of Los Angeles-based Furniture Profiles Inc., come to fruition.

"Traditionally, very little furniture is manufactured in Japan," said Wise, speaking from his factory in east Los Angeles last week. "There is no domestic industry (in Japan) militating against imports, as with oranges or rice."

Wise is also chairman of the Export Council of the Santa Fe Springs-based Western Furnishings Manufacturers Association, which has been organizing meetings between local furniture makers and Japanese buyers in the hopes of boosting U.S. exports.

Exporting furniture to Japan is important for the Los Angeles economy: The Southland is the nation's second-largest center of furniture production, and about 40,000 here work on furniture production lines. However, the industry of late has been struggling with clean-air laws, workers' compensation costs and the recession.

Japan could provide a much-needed shot in the arm. Although a global economic behemoth, Japan has been a tiny market for U.S. manufacturers, and in 1990 only about $34 million worth of U.S.-made furniture was sold there. That's a puny sum compared with the $39.2 billion total that U.S. manufacturers sold domestically in 1988, the latest year for which figures are available.

Looking for a piece of the Japanese action, Wise this March will travel to Tokyo to show Export Council-member wares to 14 major Japanese retailers.

Meeting directly with retailers is important, so that Japan's daunting, Rube Goldberg-like distribution system can be circumvented, said Wise.

In the United States, manufacturers sell direct to major retailers, or even through factory outlet stores, and often in huge volumes. The result of the efficient U.S. distribution system is that a piece of furniture a manufacturer sells for $1,000 will retail for $1,800.

In contrast, computes Wise, "The $1,000 piece of furniture I sell to a Japanese importer will ultimately sell to the consumer for $4,500."

That's because before Mr. and Mrs. Tokyo can stuff their kimonos into a bureau built by Wise, the piece will have passed through the hands of an importer, a distributor, a regional distributor and, finally, a retailer. Each layer must mark up the goods to make yen.

When he visits Tokyo, Wise will talk to 14 major Japanese retailers and encourage them to buy direct. He says, "If we can sell direct, the price will be much lower. The cost of shipping to Japan is less than the cost of shipping to the East Coast."

This July, Wise will help host a furniture trade show in San Francisco for Japanese distributors, and in November he will again show wares at the International Furniture Fair in Tokyo.

Wise said he is aware of previous Japanese promises to buy American, which often seem to dematerialize when it comes time to sign contracts. But because the Japanese are already importing furniture from Europe and elsewhere, and because there are limits to the domestic Japanese manufacturer's ability to make Western-style furniture, Wise said he is optimistic about his goods.

Too, the yen-dollar exchange and labor rates are favorable for the American manufacturer, said Wise.

In 1989, Japanese furniture manufacturers paid their workers total compensation of $10.64 an hour, at then-current exchange rates, according to the U.S. Department of Labor.

By comparison, Wise pays his workers between $5 and $11 an hour. "When it comes to costs, we can compete," he said.

But even more important than price and cost is design, said Wise. "In the furniture business, we live and die by design, and that is even more important for selling into Japan."

Already selling furniture to Japan is Gary Stafford, vice president of Terra Furniture, in the City of Industry. "We have found excellent reception for our `market' umbrellas, which are large, 10-foot-in-diameter umbrellas with two-inch (in diameter) wooden poles," he said. Japanese consumers are keen on wood products, said Stafford, and quality furniture of all types.

He said he hasn't found a need to redesign to meet Japanese tastes. "Everybody says you design to Japanese tastes, but so far we have not been asked to do that," said Stafford. "We have sold $500,000 worth of goods to Japan, and this year I think we can sell $1 million."

Stafford said he will spend two to five years developing Japanese markets, and said that it "takes patience" to sell there.

After lining up a deal with a Japanese buyer, local manufacturers might want to check in with the Los Angeles-based World Trade Finance Inc., a lender that specializes in financing production for overseas sales.

"When companies get an order from overseas, and need production financing to buy raw material, components and pay labor, that's where we can be of assistance," said Tom Hodges, marketing director for World Trade.

His company has a line of credit with Security Pacific Asian Bank and makes use of State of California Export Finance Office guarantees.

Other organizations that would-be exporters may wish to contact include Small Business Administration of International Trade and the Export Managers Association of California, in Los Angeles.

PHOTO : Wise: Chairman of Export Council

PHOTO : Packaged goods at Furniture Profiles Inc.: Japanese overtures are more than just PR this time, Wise contends

PHOTO : Parts assembly: Furniture Profiles' employees