Following the Action: Home Essentials

June, 2004, edition

Feature: Following the Action: Home Essentials

By Julie Sloane Chris Exline didn't travel outside of America until he was 32 years old. Now, six years later, he is hardly ever here. His furniture-rental company, Home Essentials, may claim Dallas as its headquarters, but it operates only in Dubai, Hong Kong, Kuala Lumpur, Malaysia, Singapore?and, starting in March, in its riskiest outpost yet: Baghdad.

Exline started six years ago with a four-day trip to Singapore, where he was visiting some expatriate friends. A seasoned entrepreneur?he had started his own real estate business when he was just 24?Exline got the idea for Home Essentials after one of his friends tipped him off to a problem: The friend's employer had given him $5,000 to buy appliances that would be compatible with Singapore's electrical system. But he then had to declare that money as taxable income. Why didn't his friend rent, Exline wondered, enabling him to get a tax deduction? By the time Exline returned to Texas, he had written a business plan.

Furniture rental, it turns out, doesn't exist globally on the scale it does in the U.S., where it's a $6 billion industry. In most markets Exline faces no direct competition. In Hong Kong, where he opened his second foreign outpost in 1998, incredulous Chinese journalists followed him around with TV cameras. "They interviewed people on the street and asked, 'Would you ever rent furniture?' " says Exline. "The people looked stunned." Luckily, he's not renting to them. Home Essentials' customers are multinational corporations such as Ernst & Young and IBM, as well as local landlords who rent apartments for use by corporations. Instead of shipping over workers' furniture in containers?which can take six to eight weeks and cost many tens of thousands of dollars?Exline will rent them everything from beds to microwaves for several hundred dollars a month.

So far the sales pitch seems to be working. Having invested more than $750,000 of his money, Exline says that Home Essentials moved into the black in 2001, and that last year the company reached sales of $3.5 million, with the number poised to double in 2004. As of the middle of this year, Exline reported that he had contracts in hand worth $6.5 million.

After cracking Singapore and Hong Kong, Exline opened offices in Kuala Lumpur in October 2001 and Dubai in September 2003. Each new market brings its own cultural surprises. Culturally taught to defer to seniority, Exline's employees in Asia have expressed shock at the way he treats his father, Sam, a former VP of Target and now COO at Home Essentials. "If he's missed numbers or made a mistake, I'll let him know," says Exline. And employees in Hong Kong reacted with bewilderment to Exline's American-style attempt at motivation: designating an employee of the month. The first honoree initially refused, not wanting to disrupt group harmony. When the cash bonus was forced on him, he bought everyone lunch and divided the rest among his colleagues. (There hasn't been an employee of the month since.)

Exline's expansion philosophy is pretty simple: Where there is a growing number of expatriates, there's a need for cubicles and end tables. In March 2003 he was on a flight from Tokyo to Hong Kong when he read in a newspaper that the Bush administration was set to pour billions of dollars into the reconstruction of Iraq. Seeing a potentially huge need for imported furniture, Exline opened an outpost in Dubai six months later and this past March began operations in Baghdad.

To get into Iraq he had to be persistent. Exline met some people in Dubai who knew people in Iraq, and learned he could catch a ride into Baghdad from Jordan. It took a couple of visits to the headquarters of the American Coalition Provisional Authority to convince those in charge that he was serious. But he ended up winning a $90,000 contract from the U.S. Agency for International Development, which ordered beds, dressers, nightstands, and sofas for its employees' homes.

After trial shipments to various ports in the Mideast, Exline found that the quickest way to get containers to Baghdad was to ship them to Dubai and truck them into Iraq. From the factory in Asia, furniture shipments take from four to six weeks. That is assuming his shipments proceed smoothly?which is hardly a certainty, given the unpredictable environment. He has a secure warehouse in Baghdad, but he is realistic. "You cannot expect to enter a market like this without factoring in certain disruptions," says Exline, who believes that "the true opportunities in Iraq begin once the transfer takes effect" from U.S. authorities to Iraqis. In the next four years he plans to launch operations in 18 more cities, from Geneva to Moscow to Delhi. He'll probably also add to his stable of four homes, which he uses mostly to store clothes. "I hate to check luggage," says Exline, speaking like the global warrior he's become.