Small-Scale Success Story : Furniture Makers Are Downsizing Products for Japanese Market

If you ask the average Japanese whether the United States or Japan makes better cars, he may think you’re joking.

Japanese autos, after all, consistently beat the rest of the pack in customer satisfaction surveys. It’s the same with Japanese televisions, stereos and a host of other products.

But when the subject turns to furniture--well, that’s a different story.

Many Japanese love the solid construction and satiny finishes of fine American wood furniture and the rich fabric and workmanship of quality American upholstered items.

The problem has been that a couple of pieces of American-sized furniture would swallow up much of the space in a typical Japanese home, which at 650 square feet is half the size of the average American home.

To capture more of the Japanese market, Southern California manufacturers have begun making furniture smaller to fit Japanese homes.

Stephen T. Wise, chairman of the export council of the Los Angeles-based Western Furnishings Manufacturers Assn., is spearheading the fledgling effort.

Wise says American manufacturers, most of which have been content for decades to focus on the lucrative, long-expanding U.S. market, can no longer afford to ignore Japan. With domestic sales of $10 billion a year, it is the second-largest furniture market in the world--about half the size of sales in the United States. It also is the world’s fastest-growing market.

With that in mind, Wise’s Furniture Profiles in Los Angeles, Terra Furniture Inc. in the City of Industry, Fairchild of California in Whittier and other Southland manufacturers have begun reducing the width of wooden furniture, shortening the seat height of stuffed furniture and making other changes to accommodate Japanese consumers.

Wise’s company, for example, is shrinking a double-dresser that for the American market is 72 inches wide to 48 inches for Japan. The height of the two dressers is the same.

Owner Scott Haigh said Fairchild of California is reducing the standard seat height of its sofas and love seats from the 19 or 20 inches that Americans require to 15 or 16 inches to accommodate shorter Japanese legs. It also is reducing the width of sofas from 90 or 92 inches to 82 or 84 inches.

Adjustments like these, Wise said, should help Southern California furniture makers’ sales to Japan jump from near zero in 1990 to a projected $3.8 million this year. That would be nearly 10% of last year’s $39.4 million in total U.S. furniture exports to Japan.

Industry officials say few, if any, American manufacturers outside California are downsizing furniture.

Wise said most of the industry’s giants, which are concentrated in the High Point, N.C., area, feel that it isn’t economically feasible to shift their assembly operations to smaller furniture unless an order involves hundreds of units. But Japanese buyers often want as few as 15 units at a time, he said.

California’s 2,000 furniture makers, which typically have sales of $5 million to $25 million a year (compared to the giants’ $100 million or more), are used to smaller runs, said Gary Stafford, owner of Terra Furniture. “We get a lot of special requests” for customized furniture, he said.

Wise said California makers are also making design changes to suit Japanese tastes.

He said they are telling the Japanese: “You tell us what you want, and somehow we’ll get it done.”

Western European makers, especially the Italians, long ago carved out the largest slice of Japan’s market for expensive imported furniture by agreeing to small runs, meeting exacting Japanese quality standards and offering sleek, modern designs. Asian manufacturers produce most of Japan’s low-cost furniture imports.

Although making smaller furniture will open up more of the Japanese market to the United States, some American makers have been able to sell there without downsizing. Their expensive furniture lines have gone to wealthy Japanese with large homes or to hotels, resorts and condominium complexes that feature Western-size rooms.

Larry MacBean, vice president--international of Century Furniture Industries, said his Hickory, N.C., company sold more than $500,000 in full-size American furniture to Japan last year.

Wise, other industry officials and Japanese government officials say several factors have converged to make the timing right for American manufacturers to sell more furniture to Japan.

First, furniture imports to the United States--much of them inexpensive Asian products--are encroaching on U.S. manufacturers’ domestic stronghold. Last year, imports totaled $3.3 billion while exports were at $712.5 million, giving the United States a trade imbalance of $2.6 billion in furniture. Exporting more is one way American makers can maintain their sales in the face of the import competition.

Second, furniture manufacturing appears to be a declining industry in Japan because of high cost of materials, the need for sizable plants in a country where land costs can be astronomical and because the industry is so labor-intensive at a time when the country is short of workers.

Third, the Japanese government is making a concerted effort to increase American imports to try to reduce friction with the United States over Japan’s consistently high bilateral trade surpluses.

In the last 15 months, Japan has abolished import duties on furniture and offered tax breaks and other incentives to Japanese companies that buy American.

In addition, it increased the budget of the Japan External Trade Organization, the agency charged with reducing the trade surplus, seven-fold from April, 1989, to April, 1990, according to JETRO officials in San Francisco.

Part of the increase is being spent on trade missions and trade fairs that match American manufacturers with Japanese importers, distributors and retailers.

JETRO has helped fund American furniture-manufacturer trade missions to Japan the last two years and is underwriting much of the costs of three furniture fairs this year--two in Tokyo and one in San Francisco.

Wise said the first fair--in Tokyo in March--generated $250,000 in orders for the 16 Southern California furniture makers represented.

That was where Southlanders learned that many Japanese furniture retailers want smaller furniture.

It was also where they learned that Japanese retailers and distributors are more demanding about detail than American retailers.

For example, Japanese buyers want finishes on the undersides and backs of furniture--even though those places don’t show unless pieces are being moved, Wise said.

He said one buyer lay down in a bed and looked up to spot the fact that the underside of the headboard was unfinished--as is customary in an American bed.

“He asked that we finish that part too,” Wise said.

Wise agreed--and he was on his way to an order.

U.S. Furniture Makers’ Sales

With increased foreign competition and lower demand during the recession, U.S. furniture makers’ shipments have been flat in recent years. They are projected to rebound strongly next year.

Source: American Furniture Manufacturers Assn.