Ashley Furniture Shifts Gears to Sell in China

January 15, 2014  by in Business Strategy, Furniture Retailing, Industry   

Last month, Wisconsin-based Ashley Furniture opened its second retail store in China. The showroom in the southern city of Suzhou displays furniture made for compact Chinese apartments, including dining room tables measuring 1.5 meters (4.9 feet) in length—as opposed to the standard length of 2 meters to 3 meters popular in the company’s U.S. stores. The Suzhou outlet also features glossy furniture sets marketed under the new label King’s Wear, a product line that is more luxurious and pricier than Ashley’s standard offerings. It is designed specifically for Chinese customers.

The family-owned, 69-year-old furniture company that was founded in 1945 built its multibillion-dollar business selling bedroom sets and upholstered sofas to Midwestern baby boomers, working with such mass retailers as Sears (SHLD) and Kmart and catering to middle-class American tastes. Now Ashley Furniture is figuring out how to adapt its product lines to Chinese preferences as mass urbanization fuels a fast-expanding market for home furnishings in China.

“When you come to China, the middle class is very different from middle class in the U.S.,” says Paul Dotta, Ashley’s vice president of international business, who lives in Shenzhen and has worked in Asia since 1997. Customers want compact furniture that uses space efficiently. 

 

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Source: Bloomberg Businessweek