Russ Sorenson: President, Hanamint
Joan Gunin -- Casual Living, August 1, 2009
Jumping from slot manager at a Las Vegas casino to a leader of what would become one of the top import companies in the outdoor furniture industry isn't as big a leap as one might think. Just ask Russ Sorenson.
“The casino industry is very people oriented, and I dealt with a lot of people on a daily basis — both happy people who'd won money and unhappy people who'd lost,” said Sorenson, president, Hanamint. “I think that experience transferred well into our industry.”
Sorenson joined Hanamint in 1996, soon after it was launched by Jim Li. Initially a warehouse business, the company provided cast aluminum furniture manufactured in China to specialty dealers in Southern California, Arizona and Texas.
Li was a college physics professor at the time, so Sorenson took care of Hanamint business during the day while Li taught class. And Li took over in the evening when Sorenson managed the slot machines.
Their initial goal was to build their sales to $5 million a year.
“We had figured out that $5 million was what we needed to support our families without having to work two jobs,” Sorenson said. “I have to be honest: We didn't envision Hanamint to become the size and force that it is today ... not in our wildest dreams.”
They got a glimmer of what was possible in 1998, when they both quit their supporting jobs and opened a second warehouse in Greensboro, N.C. Dual distribution points enabled the company to service both East and West Coasts without exorbitant freight costs.
Sorenson moved to Greensboro to run the distribution warehouse alone until it generated enough revenue to support itself. It didn't take long.
“It was a huge success from the first month,” Sorenson said.
In fact, it was so successful that it became impossible to keep up with demand with only a warehouse program. By then, Hanamint had its own manufacturing facility in Shanghai. Knowing they could provide the volume without risking quality, Sorenson and Li began transitioning the company's focus to direct imports.
That decision brought Hanamint face-to-face with what Sorenson calls the biggest challenge of his career — overcoming negative attitudes about product coming from China.
In the late 1990s, specialty retailers were cautious if not outright hostile to the idea of directly importing containers of outdoor furniture. Too many had been burned by trading companies that showed and sold what appeared to be a quality product only to deliver something much different. In those early years, it was a daily battle to convince specialty retailers Hanamint wasn't in that league.
“We had to work hard to assure people that what they saw at the show came from our factory and what they ordered would come from our factory and look exactly the same — and that we had the U.S. warehouses to back it up if there was a warranty issue,” Sorenson said.
“I think we were one of the first to have that capability,” he added. “Even today there aren't many manufacturers that have the control we have from the factory floor all the way to my office.”
Although its container programs proved to be key to its growth over the years, Hanamint in a sense has returned to its roots in light of the recession and is once again leveraging its warehouse capabilities. The manufacturer substantially increased its inventory at the beginning of this year to ensure that it could support its dealers throughout the season and will continue that strategy for 2010.
“I think we will continue to see retailers relying more on domestic warehouses and those manufacturers who can deliver product in a reasonable time,” Sorenson said. “They are not going to fill their own warehouses like they used to because money is so tight.”
While Sorenson doesn't believe this recession will transform the outdoor furniture industry, he hopes stabilization of the economy will bring the industry back to more reasonable costs for manufacturers and the middle price points for dealers that drove volume sales in the past.
In the meantime, Sorenson has been impressed by how retailers are adjusting to conditions and doing whatever it takes to weather the storm. He is reassured by the fact that he hasn't gotten pressure to drastically cut prices. Instead, retailers are more concerned that manufacturers will cut back the number of options they offer their dealers, shrinking the specialty nature of the business.
Given his lack of industry background, Sorenson has always looked to retailers for inspiration and guidance.
“Our mentors have been the store owners who saw a lot of potential in the company and who gave us ideas, worked with us on projects and products, traveled with us to China,” he said. “Jim and I did this from scratch, learning as we went and we received a lot of support from many great retailers.”
Because Hanamint has run lean from the start, Sorenson hasn't had to face some of the tough decisions spurred by today's economic conditions. While he's making a greater effort to keep employees informed about what is going on with the industry and the company, his hands-on leadership has been constant.
“I'm not a sit-in-the-office type of person,” Sorenson said. “I am very active in the day-to-day operations — always have been and always will be.”
“It's been exciting and fun to go from a little company people really didn't pay attention to to where we are today,” he said.
With the addition of Casa Casual in 2005, which gave the company an entry-level brand a step up from the mass, and Alu-Mont in 2007, which gave it domestic manufacturing capabilities, Hanamint is well-positioned for the future.