JLA Home Forges New Model
September 29, 2008,
New York — JLA Home is expanding its product reach with new categories — pet beds and RTA furniture — as well as broadening the mix of its existing product segments with new licensing programs and a China-to-U.S. furniture program.
Jin attributes a major factor in the company's growth to the fact that its model is “virtual” — “don't own manufacturing, but I carve out the process needed and negotiate pricing based on downtime at the factories.” Despite not owning factories, something he had done years ago, Jin contends he has control of all steps in the manufacturing process, printing, weaving, sewing, etc. At the same time the company has a 300,000-square-foot facility in Hangzhou with 700 people working on design and samples for all nine of the divisions.
Currently, JLA is comprised of JLA Home for bedding, window coverings, blankets, pet beds, floor coverings, RTA headboards and chairs; a fabric division; and Harbor House, the company's retail furniture business in China that is being expanded to the United States.
The pet bed business is one example of how Jin sees opportunities for growth. Starting in a small way with Target “that had a couple of suppliers,” JLA bought a struggling supplier and now has Petco, BJ's, and Costco as part of this rapidly growing business — JLA Pets. “We'll do $25 million this year and are on track to do $40 million in 2009.” said Jin.
One advantage for JLA that he sees is the knowledge that each division derives knowledge from the others. An example, he said: “We know what's hot in upholstery fabrics through JLA Home Fabrics — like microsuede. And we use our own fiberfill from our basic bedding to develop the fill for the beds, and blanket constructions like micro fleece and micro raschel.”
In blankets, the company is developing a wireless control for electrics and is licensing the technology developed by the former Pillowtex, but the inventor owns the patent, Jin noted.
Looking at fashion bedding, Jin commented, “It is growing, but the level of growth is not like the old days.” One energizer for fashion bedding is licensing of designers such as Candice Olson, Josie Natori, and Robert Allen @ Home, as well as others down the road.
For this part of the fashion bedding business, JLA has developed relationships with sales rep organizations that specialize in specialty retailers for both bedding and a growing gift/accessories thrust.
But Jin is not abandoning the mainstream fashion bedding business. “Everyone [among major retailers] today has private label programs, and we have a good grasp of that business. We own a large market share; our roots are as a low cost producer. We're going after every private label project as well as brand licenses.”
The launch of the JLA furniture division, formerly called Domino, offers headboards, chairs and benches using a patent pending RTA process, Jin explained. The division is using JLA Home Fabrics products for the covers. “I feel this segment has a $100 million potential. In the five months since we launched it in High Point, N. C. we have five major chains on board.”
As for JLA Home Fabrics, “It has primarily been a supplier to furniture manufacturers. Now it will move into decorative bedding targeting furniture stores, mom and pop specialty stores and interior designers,” Jin told HTT.
The fabrics division also has signed on with Yangtze River Delta Co. to create, produce and promote a new line called JLA Direct. “This fabric business went from doing $1 million to almost $20 million in two years, and it can grow even more,” he added.
Delta, he explained, “is small and nimble, the owner is a textiles major, he knows all the factories and is nimble and quick. He's what we were like in the early JLA days and we'll make them compete with my team. Delta will be a more aggressive line, more promotional.”
As for Harbor House, the collection is a China-based retail program of furniture and furnishings. “It's a lifestyle concept and we are looking to partner the whole brand here.” Currently there are six stores in Beijing, Shanghai and Hangzhou of 10,000 to 15,000 square feet.
Jin said, “It will be a turnkey opportunity for U.S. retailers.”