Published October 1, 1993 | October 1993 issue
Ashley Furniture Industries Inc., a maker of self-described European contemporary furniture, has become a pioneer of sorts in Russia.
About two years ago, Ashley began selling furniture in Russia and now its products are displayed in showrooms in Moscow and three other cities. Ron Wanek, Ashley's chief executive officer, says former party members and the Russian military, in particular, have the money for optional purchases. And American-made products are especially in demand. "There's a tremendous number of wealthy people in the former Soviet Union," Wanek adds.
Located about 35 miles northwest of La Crosse in Arcadia, population 2,166, Ashley employs about 1,800. More than 1,700 of those jobs have been created over the last seven years, fueled in part by a growing export market. About 20 percent of Ashley's furniture is shipped to more than 30 countries, with Canada and Mexico comprising the largest foreign share.
Wanek says the company simply made the decision 10 years ago to be a world-class furniture manufacturer. But Ashley has chosen its foreign markets carefully. While its products sell well in England, Ashley does little business in Germany and none in France or Italy. "If we want to sell in those markets, we'd have to adapt the style," Wanek says. "Like the auto makers learned, you can't manufacture big dinosaur cars and just move the steering wheel to the other side."
Ashley works through foreign distributors and avoids some of the currency-handling problems that direct sales might create. Wanek says the key to success is selecting foreign partners carefully. "You need to have good chemistry," he says. "In all our years of exporting we've only had one sour deal."
Although venturing into foreign markets doesn't faze Wanek, he worries about increased costs to produce and ship his merchandise, even within the United States. "We're in the worst competitive position in the Upper Midwest," he says. "We get all our raw materials from the Northwest, the East and Southeast. Costs of raw materials from the West have gone up over 60 percent." Wanek points to high fuel costs and increased fuel taxes when he says, "It's cheaper to ship something from the Orient to California than it is to ship something from California to Wisconsin."