Conquering space allows business to grow

12/27/2005

Pacific Business News (Honolulu) - by Nina Wu Pacific Business News

When Jenn Johnson and Aubrey Yee first looked for an ideal location to open their furnishings and accessories shop, they knew that Kakaako, between downtown Honolulu and Waikiki, was the place.

But given their limited budget for a startup business, they had to settle for a smaller space in an out-of-the-way location for Pacific Home.

The 1,400-square-foot storefront at 1115 Young St. seemed like a good starting point when it opened in August 2004.

It's in "upper Kakaako," across from Safeway, and it has high, loft-like ceilings in a fairly new building. The build-out cost was only about $25,000, with friends and family pitching in.

But the limited space meant that customers would be able to see only a few furniture pieces -- at most four or five sofas and chairs, along with pillows, lamps and other accessories.

Also, there are only a few parking spaces in front of the store, to be shared with the Honolulu Pet Clinic next door.

Targeting upscale customers

Johnson and Yee, both 30, started their business with the strategy of targeting a specific upscale market niche.

Johnson had been an architect for Gensler in San Francisco and Murphy-Stevens in Denver. Yee ran a wholesale business importing pieces from Indonesia, Thailand and the Philippines.

Their product line runs to contemporary styles with fresh, clean lines that are not "overly done tropical" or too formal. They call it contemporary Pacific, with an island feel. Their strategy is to offer high-quality merchandise at good prices.

Items range from $200 for an ottoman to between $1,400 and $3,000 for a sofa. Upgraded sofas can cost $5,000.

Rather than competing with other businesses, Pacific Home aims to offer items carried by no one else in Hawaii.

"If someone's carrying something, then we don't want to carry it," Yee said. "We don't want to compete on price."

Pacific Home is the exclusive carrier in Hawaii of the Mitchell Gold + Bob Williams line of upholstered furniture. The company, based in North Carolina, offers its furniture through only select retail businesses. It delivers items within eight to 10 weeks of an order.

A few imported items that complement the Mitchell Gold look are also offered in the store, including antiques from Bali.

"It's a clean and fresh approach to what's already been done," said Johnson, who was familiar with Mitchell Gold as an architect.

Operating in a small space means using it in the most efficient way to get maximum exposure for several furniture pieces -- without letting it look cluttered. The rest is offered from a catalog behind the counter.

Customer service is key, because people walking into the store often cannot see or sit on the actual pieces of furniture they want to buy. The small sales staff is trained to explain what's available, and to take custom orders.

Building a customer base

The lack of visibility and walk-by traffic at the Young Street location has forced Johnson and Yee to market carefully. They have bought ads in glossy interior decorating magazines but have stayed away from the general-circulation daily newspapers.

On every second Wednesday of the month, Pacific Home holds a free evening workshop, called StyleIn -- with complimentary pupus and drinks -- on topics ranging from container gardening to decorating for the holidays.

Johnson and Yee have begun to build the client base that is critical to their success. Actor Pierce Brosnan, for example, walked into the store one day and bought a few pieces.

With 2005 sales on track to surpass the million-dollar mark, Pacific Home is preparing for the next move. In March, it will move into a 6,600-square-foot storefront at 420 Ward Ave., the former home of Showplace South. There, it will be surrounded by restaurants and other shops and have lots of parking and drive-by traffic.

And Kakaako's condominium boom is expected to boost the business once new homeowners move into their units.

Test Pilot

"This was kind of like our test pilot to see if the concept we had was going to fly," said Yee of the Young Street location. "And it worked. We realized that we ran out of space."

The new store will come with an attached warehouse in the back, so Pacific Home can do business under one roof and offer more and varied merchandise. Johnson and Yee intend to feature several new lines of furniture, staying true to the philosophy of bringing in items that aren't already available in Hawaii.

Johnson and Yee also are bringing in a new equity partner -- Jamie Jackson, a former customer and interior decorator who runs BooBam Design. With Jackson on board, the team will be able to offer an in-house designer.

source: http://pacific.bizjournals.com/pacific/stories/2005/12/26/smallb1.html