William Hsieh, Chairman of Lifestyle Enterprise

February 28, 2007  by in UnCategorized   

By Home Furnishings Business in Case Goods on March 2007 Lifestyle Enterprise Chairman William Hsieh is shaking up High Point—and the worldwide furniture industry—with a brash style and a fierce determination to bring a new approach to the way furniture is marketed. He’s won attention—and ruffled plenty of feathers—with high-profile ads for $99 sofas, $299 bedrooms and other eye-popping deals.

With the Forbidden City Furniture Show, he’s awakened High Point’s showroom buildings from their normal winter slumbers by flying in more than 500 furniture retailers for a three-day celebration that has become an annual January event. In nightly drawings, a lucky buyer drives away in either a BMW or a Mercedes-Benz convertible. This year, more than 60 High Point showrooms opened their doors to the hundreds of buyers who came to town to buy from Hsieh.

A native of Taiwan, Hsieh became a major furniture player in the ‘70s, selling so-called “stop-sign” dining tables to large furniture retailers with his previous company, Datong. He stepped away from that pioneering import company to serve for five years as a Congressman in Taiwan before returning to the U.S. furniture industry—and High Point—with Lifestyle Enterprise in 1997.

Well on its way to becoming a $1 billion company—with ambitions to become much larger than that—Lifestyle Enterprise has a major global presence. It exhibits at most major furniture markets across the globe, and it’s dramatically expanding its presence in High Point. Over the next two years, Lifestyle will build a 110,000-square-foot addition to its Forbidden City showroom complex that Hsieh promises will be unlike anything the industry has ever seen.

You’ve created a lot of excitement in High Point with your second Forbidden City Show. Are you aware that it already ranks as perhaps the industry’s largest single-vendor event?

I don’t know if it’s the largest, but I think we’ve generated a lot of traffic and, most importantly, excitement. We’ve proved again that being a good furniture marketing company doesn’t need to be that hard. It can be a lot of fun. We want to bring that to the furniture industry, so it’s not only about just buying, selling, price, inventory and all of those things. I think it is time for this industry to be just as exciting as other industries.

What can you tell us about the commitment you’re making to High Point with the $10 million expansion of the Forbidden City showroom complex on Commerce Street that’s set to open in 2009?

It may cost more than that. I’ve already talked about the plans with our architect. I’m not just going to make this a furniture showroom. I want the new Forbidden City to be about 60 percent furniture showroom and 40 percent museum. It’s going to be more than 100,000 square feet in a three-and-a-half story building. But it’s going to include some beautiful Chinese artifacts and some reproductions. Its atmosphere will make furniture shopping more fun and relaxing. Five years from now, it’s possible that 70 percent of the world’s manufacturing base will be in China and another 20 percent will be in Southeast Asia. It’s already that way in other industries. PCs, iPods and Nike shoes are almost all made in Asia, and furniture will eventually be the same way. Since the furniture is made in Asia, we want to show some of the classic (antiques) that are part of that heritage. The Forbidden City (in Beijing) is a symbol of Asia and the royal family, both of which represent the kinds of beautiful, luxurious furniture China has produced throughout its history. We’ve already invited public groups and schools in High Point to use our Forbidden City showroom for special events. I have a dream to create the biggest, most beautiful museum of Chinese artifacts outside of China to serve as a link between China and the U.S., which are partners in so many ways.

City officials in High Point have said with a great deal of pride that you could hold the Forbidden City Furniture show anywhere in the world, so why is it in High Point?

High Point has had a market for nearly 100 years, and it’s the world’s busiest furniture event. Twenty-five years ago when I first came here with my (prior) company, Datong, we were just getting started in the industry. We just wanted to find American customers for the kitchen tables and the stop-sign tables we made (in Taiwan), and we found that here. High Point has faced a lot of challenges over the past 25 years from shows in New York, Chicago, Los Angeles, Atlanta, Dallas and now Las Vegas. High Point can continue to get stronger as long as it can give people excitement and fun. It’s all about creating demand. For Lifestyle, if we provide products to the market, retailers will continue to come here to High Point. Location is not really important. We’re not dependent on any show, whether it be in High Point or Cologne (Germany). How good you are is what’s become even more important.

Lifestyle is growing at 50 percent a year. How close are you to becoming a $1 billion company?

We have increased by more than 50 percent a year for the past six years. We’re still very small (in relation to some of the industry’s biggest companies), but we have a format, a strategy and a philosophy that I think will enable us to become a $1 billion company within two years. We also have additional, more aggressive targets. Bear in mind that Apple has 90 percent market share for MP3 players, Nokia has 30 percent market share (in cellular phones) and Nike has 37 percent of the world’s sports shoes market. We want to learn from those companies. We want retailers to get whatever they want from Lifestyle at the shows we participate in or, in the future, through a dot-com platform that’s in the early planning stages.

You gave away a BMW and a Mercedes Benz at the Forbidden City Show. Can the retailers who are here learn something from how that kind of giveaway promotes excitement?

They should. When you look at other industries, even the airline industry promotes during slow periods with “Buy One, Get One Free” deals. We’ve given away free floor samples, which is something my people have told me is an incentive that few, if any, furniture companies have offered before. Fifteen years ago, Rooms To Go first offered customers no down payment, no interest and no payments for a year. Nobody had ever done that before, but now, everyone is doing it.

Flying retailers to High Point, giving away cars and floor samples must be expensive.

It’s a festival and a celebration of all the retailers who partner with Lifestyle. At the first Forbidden City Furniture Show, we really exceeded our sales expectations, but it did cost a lot. The free floor samples accounted for more than two-thirds of the cost. Airfare and hotels were the smallest part of the expense. This year, we’re on track to show a sales increase over the first show of well over 50 percent. It will cost me even more than last year, but I see it as an investment. Our message to American retailers is that we’ll always be at their service with the best products at the best prices and with the best terms to help them generate more business and make more money.

Are you aware how much some of your rivals complain about some of your more aggressive deals, especially the $99 sofas and beds you promoted during 2006?

Yes. Let me tell you a story about that. The last two times Morty Seaman (of Rooms To Go) visited our showroom (in High Point), the first sentence out of his mouth was “William, they all hate you out there!” The ($99 ads) really created a lot of complaints. Even some existing customers weren’t happy because they’re afraid (nearby competitors) will do business with us. Potential customers dislike us because our prices make some of their products too expensive. My competitors feel we give them a hard time (with those promotions). The factories that don’t supply us dislike us, too, because their customers are asking them, “Why can Lifestyle sell it for $99 and we have to charge $129?” We’re not really a promotional company. We have our high-end Forbidden City line and Shanghai Leather. When Apple started selling the iPod Shuffle for $99 two years ago, nobody accused them of being a promotional or cheap company. If no one complains about Apple’s $99 iPods, why should they complain about my $99 beds? We create more business for retailers because customers can buy more. They’re spending more money. Eventually, everyone in the industry will get better and (industrywide) sales will increase as a result. The whole industry will be more alive and will be creating more excitement for the retailer, and consumers will buy even more. HFB