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Michael Amini: The Sun Also Rises

By Nicole Liang

It is Michael Amini’s game plan to stay visible, remain relevant and provide consistent supplies despite the economic winter. How? By expanding marketing budgets, product developments and manufacturing sources. “At the end of the day, AICO will be there when the sun rises and sets and rises again,” he said, because retailers and wholesalers “need someone who can be there tomorrow to ship their products”.

“During hard times, while we strive to be more cautious in terms of expenditure, we should stay aggressive. Don’t lose focus and don’t cut away marketing budgets,” said Michael Amini, Chairman/CEO/Founder of Amini Innovation Corp (AICO).

With “cut costs” being the hottest buzzword in this economic winter, Amini’s theory on how to stay profitable can seem a little controversial. Marketing budgets, including investments in advertising and promotion, are often the first to come under the axe, given the ‘intangible’ nature of their returns. The rewards and benefits of creating awareness and brand building are seldom immediately felt.

Yet marketing budgets must be spared from the knife, he said. AICO now runs an advertising campaign on two national television programmes in the US and in major publications. “We should not forget that there are still consumers who continue to purchase new homes and furniture. In fact,” explained Amini, “there are a substantial number of people who buy houses during bad times. If you do not get yourself known to these consumers, you will lose your share in this market.”

Spoken like a truly competitive veteran who does not rest on his laurels. Whether in the market or industry, Michael Amini and AICO are established well-known names. At the annual Leadership Conference in 2005, Furniture/Today presented Michael Amini with the ‘Furniture Supplier of the Year Award’, and in 2007, the International Home Furnishings Representatives Association honoured him with the ‘Pillar of the Industry’ award for his commitment to the furnishings industry, his community, and mankind.

Amini founded AICO more than two decades ago and today, the furniture designer/importer owns a 37,161 sq m state-of-the-art facility in Pico Rivera, California that boasts 86 shipping and receiving docks. Also, there are eight exclusive suppliers now in China and five of them are major companies. A mega-warehouse for mixing and quick shipping from China is in the pipeline as well.

Aggressive Product Development

With humble beginnings dealing only with occasional tables, dining chairs and bedroom sets, AICO’s product lines now include complete case goods collections, high-fashion upholstery, the creation of a commercial and contract division called AICO Office Systems, and a complete line of correlated decorative accent rugs and top-of-bed fashions.

Still, he shows no signs of stopping, despite a pervasive wait-and-see hibernation in the industry. “We are not going to sit back and wait for the market to get better. Even during bad times we are still a profitable company. When the situation gets better, we will be in good shape and form to compete,” Amini said.

“We are now also more aggressive in product development and marketing to give better price and value. We’ve been known for classical furniture for a long time. But in the last one and a half year, we’ve started to aggressively introduce casual contemporary furniture in smaller sizes. We are also making budget products, where demand is expected is expected in the mid-low to upper end markets,” Amini shared.

The company recently launched a contemporary casual line of smaller furniture for Europe. ‘Casual Impressions’, the new furniture division, will feature a whole new look for AICO. The pieces in this division will have a more contemporary/transitional style, and have the ability to fit into most homes because they are proportioned for today’s lifestyle in limited space. Casual Impressions brings straighter lines, and mixed media elements to its collections, which appeal to a younger consumer group, and include bedroom, dining sets, occasional tables, media pieces, and upholstery. Each collection includes elements not yet seen in the AICO showroom, including bamboo, shutters, and recessed hardware. In addition to the new case good collections, new upholstery groups are available through
Casual Impressions.

While AICO’s products are sold over the world, its strongest markets have mostly been the US and Middle East. The European market was previously less explored because AICO’s “furniture pieces are too big” for them, according to Amini. He continued that in the European market, there are several compliances to consider. Specifically in Germany, consumers look for straight lines, simple and practical designs with good value. In England, the trend is more contemporary with a classical touch, and “perhaps more of this classical touch than in Germany”.

The high-end, high fashion segment will still continue. “People who have money will still buy what they want. They might become more price conscious but this group of consumers will not give up the higher end for promotional pieces,” Amini explained.

Stringent Retail Model

Amini’s assessment of the consumer market comes first hand as AICO works with a select group of retailers who must meet its several requirements. First, AICO retailers follow a selective distribution model. Each store carries a different set of collections. Stores are also encouraged to carry “whole” collections, including bedroom, dining room, entertainment, and upholstery, to create a one-stop shopping destination.

Official AICO retailers also have the policy of White Glove Delivery. White Glove Delivery includes careful inspection, maintenance and cleaning of the product before transportation from the warehouse to the end location. Official AICO retailers may also have a presence on the Internet, in a specific capacity, which differentiates them from non-official, online retailers. For example, all official AICO online retailers only sell products that they also have available on their brick and mortar showroom floor. As well, they never advertise the prices of any furniture.

In addition, AICO renders marketing support to official retailers by providing signages and posters for in-store decoration. Displays and layouts are designed according to the floor plan and specifications given by AICO.

Buy/Sell In China

AICO also runs its own retail floors. The company opened its first store in China in May 2008. Located in the Meten Living Design complex in the city of Hangzhou, the 7,000 sq ft store rides on the area’s demographic profile, as well as its beauty and growth potential.

With the encouragement of a confident, determined and supportive Chinese businessman, Amini agreed to the opening of the very first franchise. However, their products have been difficult to obtain in China until now, but Amini wanted to make sure this would not be a problem in the future. He plans to open as many as 40 additional stores all over China and other Asian destinations. “This was a natural progression for AICO. We wanted to bring my designs to China for everyone so they can enjoy the fine craftsmanship that the area has provided us for so many years”.

The Chinese have been long-standing partners to AICO for the past 15 years, said Amini. Most of them manufacture for AICO only. “There is a lot of trust and expectations involved. I don’t walk in and just expect people to cease production for all other customers and come to us. All the factories we work with right now, we consider them the best since we’ve been through thick and thin together,” Amini shared.

The designer/entrepreneur really meant sharing both the weal and woes. In times of woes when opportunistic importers quote near cost prices, Amini believes in being fair. “We don’t ask our factories for lower prices just because it is a good time to exploit that option. Only for certain reasons do we ask for lower prices. If the cost of production has gone down, we expect savings to be passed on to us accordingly. If the government gave tax savings, we expect to share that as well. In no case do we take money from our suppliers’ pockets to put in our own.”

The Sun Also Rises

Despite this envious long-term relationship, Amini sighted very early in the game that China alone couldn’t provide for AICO’s entire range of products forever. One of its first alternatives was Vietnam.

“We were one of the first to enter and exit Vietnam. Our furniture requires a lot of carvings and ornate, and we did not get the quality and efficiency there. So we pulled out, a couple of years before the US anti-dumping case came about,” Amini said.

Back to China, Amini observed that the government “started to lose sight of supporting exporters about one and a half year ago. And the impact was more serious than they expected. It affected all importers like us and that is one reason why we stepped outside of China to source”. He recently toured the Asian furniture trade show circuit in March, on the lookout to diversify AICO’s sourcing capabilities. It is already working with one in Malaysia and another in Indonesia.

Whether it is the issue of foresight or losing sight, it is Amini’s game plan to stay visible by sustaining marketing budgets, remain relevant via product development, and provide consistent supplies by expanding its manufacturing sources. Today, some buyers may be looking to alternatives with prices as low as possible. Amini said this is understandable but added, “At the end of the day, AICO will be there when the sun rises and sets and rises again,” because retailers and wholesalers “need someone who can be there tomorrow and in the future to ship their products”.