Evergreen Enterprises Starts Locally, Grows Globally
Image: Frank Qiu and his wife Ting Xu, owners of Evergreen
RICHMOND, VA (November 22, 2010) – Richmond Times Dispatch
Enterprises, stand by part of their new Creative collection.
By: Louis Llovio. Image: Alexa Welch Edlund
Sitting off Midlothian Turnpike in South Richmond behind a wrought-iron fence is Evergreen Plaza, a multi-acre compound of warehouses, offices and design studios.
The inconspicuous complex of buildings is home to a growing global company that generated nearly $220 million in annual sales last year.
Evergreen Enterprises designs, manufactures and distributes home décor products and accessories under brand names including Cypress Home and Cape Craftsman to thousands of independent gift shops, such as the local Barnett's Hallmark stores, and national chains, including Bed Bath & Beyond and Garden Ridge.
The company's products are sold at stores from Van Nuys, Calif., to Vigevano, Italy.
Its trivets, cutting boards, coasters, kitchen accessories, wind chimes, flags and hundreds of other items are made in Asia. The company employs about 2,000 workers, including about 350 in the Richmond area.
Evergreen also operates the 10-store Plow & Hearth chain, which it bought last year as a way to grow its business by selling directly to customers through its own retail stores. The chain has six locations in Virginia, including one across from Short Pump Town Center in western Henrico County.
Evergreen, which began as a flag manufacturer in 1993, has plans to expand the Plow & Hearth chain. This month, for instance, it opened a store in Virginia Beach and one in Annapolis, Md.
It also plans to grow its core home décor manufacturing and distribution business, mostly in Asian and European markets.
Sales have soared from about $40 million in 2004 to $220 million last year.
"I don't think we can say that this is what we planned," Ting Xu, Evergreen's founder and president, said about how big the company has become.
"What the American dream is all about."
Unlike many entrepreneurs who launch their companies with cleverly executed business plans littered with strategic growth objectives, Evergreen started in a Henrico County garage as a way for Xu to keep her parents busy.
It was the early 1990s.
Xu had recently received her graduate degree and worked for the state of Virginia as a computer programmer. She emigrated from China to the U.S. with her husband, Frank Qiu, now Evergreen's CEO, in 1986 and moved to the Richmond area in 1989.
Her parents followed her to America the next year.
Xu was living in what she calls "a nice typical neighborhood."
"I was looking around for a business my parents could run," Xu said. "By chance, we met a couple who made flags."
Richmond is considered the birthplace of the decorative flag industry, which was pioneered by the late Millie Jones who began hanging homemade flags outside her Fan District home in the 1970s.
Xu and Qiu saw how the flags were being made and knew right away they could streamline the process.
They rented a building outside Shanghai and, in 1993, began producing flags and sold them at the Virginia State Fair.
Within two years, Evergreen had expanded its product offerings and entered into the ceramics business.
In 1995, the company attended its first gift show and produced its first catalog.
Also that year, Qiu saw the growth potential of Evergreen. He sold his insurance agency and joined the company full time.
In 1996, Evergreen broke $1 million in sales for the first time.
Since those early days, Evergreen has grown from its humble beginnings into an international company.
"To me, they are the classic example of the American dream and what the American dream is all about," said Van Wood, a professor of international business at Virginia Commonwealth University.
"I admire what they've accomplished and done."
As with many companies, the last couple of years have been difficult for Evergreen as consumers scaled back on their spending.
Xu and Qiu say a commitment to conservative fiscal principles helped them not only to weather the storm but also to grow.
"We try not to overextend ourselves and to operate in a sensible way," Qiu said. "It comes down to how you utilize your resources."
That fiscal approach allowed Evergreen to make a bold promise as the global economy soured in 2007 and 2008.
"We made a pact not to lay off anyone," Qiu said. Cutting jobs during an economic downturn is "shameful for a boss to do."
By running the company conservatively, Evergreen was able to remain strong during difficult times.
Coming out of the recession, Evergreen is expanding how it reaches its customers and trying to grow its customer base.
Late last year, Evergreen bought the Madison-based retail and catalog company Plow & Hearth for $17 million from 1-800-Flowers.com Inc. The sale included several of the retailer's brands -- Wind & Weather, Problem Solvers, HearthSong and Magic Cabin.
The acquisition enabled Evergreen to alter its business model. It now sells its home décor products directly to customers via Plow & Hearth's stores, catalogs and website.
Xu said the company is now looking to open more Plow & Hearth stores, as it did this month, across the country and possibly internationally. She said Evergreen doesn't have a number of stores in mind and that the growth will be organic.
Establishing its own retail channel doesn't mean Evergreen will change how it does business, Qiu said.
The company will continue to supply a network of about 14,000 independent shops across the country and national chains with its merchandise.
Qiu said Evergreen is committed to the independent stores that helped build the company.
"Our cultural and creative spirit is devoted to those channels, to the mom-and-pop operations," he said.
Steve Barnett, who owns the five Barnett's Hallmark stores in the area, carries Evergreen's flags and home décor items at his stores.
"I'm a big fan of what they do," said Barnett, who remembers first working with Evergreen and meeting Xu and Qiu in 1996. "I admire what they've accomplished and done."
"We have to work harder to make [what we sell] more appealing to those customers."
Acquiring Plow & Hearth last year was just one part of Evergreen's growth strategy.
That plan also includes growing overseas, including expanding in Asian and European markets. The majority of the company's sales occur in the U.S., but the company wants to change that mix.
China could be a particularly strong market for Evergreen because of its growing middle class, Xu and Qiu said.
Aside from its manufacturing operations, Evergreen already has a full-fledged business unit in China that is working to launch the company's business-to-business and business-to-consumer operations. Qiu travels there about five times a year for two weeks at a time.
The overseas markets, including China, present challenges not only in creating distribution networks but also in coming up with products that sell.
Just because something sells well in the U.S. doesn't mean it will translate to sales in China or India, Xu said. Or vice versa.
"We have to work harder to make [what we sell] more appealing to those customers," she said.
Wood, the VCU business professor, believes the company will successfully adapt.
Evergreen has prospered because the company's management has spent a great deal of time getting to know what customers want and then giving it to them, said Wood, who has known the owners for about a decade and uses the company's story as lessons for his students.
"We use the opportunity to create better jobs."
As Evergreen expands its global footprint, the nature of the company and the world change.
Xu sees a time, in the not-too-distant future, when manufacturing will move from China to other parts of Asia, much the way it shifted from the U.S.
It's natural for companies to look at cheaper manufacturing because it helps keep prices down, she said.
Xu eventually sees manufacturing moving onto the African continent.
Some of that shift already has begun as China's work force develops and the country's economy becomes more technological.
While some bemoan the loss of manufacturing here and abroad, Xu sees it as an opportunity for more developed nations, including the U.S., to focus on new technologies and better prepare its work force for the 21st century.
She uses Evergreen as a local example of how economies and businesses can evolve.
While the company doesn't manufacture its products at its Midlothian Turnpike complex, it still creates jobs by bringing in designers and other highly trained employees to run its systems.
"We use the opportunity to create better jobs," she said.
Yet, with all the talk of globalization, Xu and Qui say Richmond is where they belong.
"Virginia is home," Xu said.
She said her family, including a brother and his family, all live within 5 miles of one another. The couple have two children, one of whom is in college and the other in high school.
The family often visits China, but Xu says she now feels like a visitor when she's there.
"We've been here 20 years; this is where our children were raised," she said.
Xu doesn't believe the children will take over the business, nor is she nudging them in that direction.
"I definitely want them to be on their own, to find something they're passionate about," she said.
Much like she did, Xu adds.