On a recent trip to Southern California, I had an opportunity to sit down with Dara Mir, co-founder, CEO and President of 9to5 Seating. It was my first visit to the company and I was keen to learn about its history and philosophy.
When the Norwegian office furniture company, Flokk Group acquired 9to5 Seating in 2019, I was familiar with some of Flokk’s European brands, for example Giroflex, HÅG and Profim but I didn’t know much about Flokk.
Google to the rescue. I found this quote on the About Us page of Flokk’s website, “Flokk is the Norwegian word for flock, which in its most basic terms means a group or a gathering. But it can be much more than that. A Flokk is synonymous with a group, defined by a common idea or goal. It’s about being part of something greater than yourself while fulfilling your own personality and identity. We like to think that our Flokk is greater than the sum of its parts.”
That sounds great but lots of companies that are acquisition minded say that. So going in to the interview with Mr. Mir I was interested to learn about the history of 9to5 Seating and how a family-owned business was experiencing life as one brand of many in a flock.
Bob Beck (BB):
You emigrated to America from Iran with your parents after the 1979 Iranian Revolution. Tell us a bit about that.
Dara Mir (DM):
Both my parents were very entrepreneurial in Iran and had their own businesses. I was born in 1980 and life post-revolution became very difficult for us in Iran. My parents wanted to have a better life for their children with more opportunities, and made the difficult decision to leave Iran. Just to be able to leave the country at the time was a very difficult process.
My father had gone to boarding school and finished high school, college and university in the UK. So initially, we went to London for a brief stint – about three or four months, but it was always his dream to move to the United States. My mom’s brother lived in San Francisco at the time, so we traveled out to San Francisco and stayed with him for a little bit, but my dad had always dreamed of living in Los Angeles. So we came down to Southern California and they started looking for opportunities to find a job or start their own business.
BB:
Was that business an office furniture business?
DM:
No, my mother had very successfully run a children’s garment manufacturing business in Iran with her sister. They decided to duplicate that business here in the States. So, they set up a small facility in downtown LA, in Pershing Square, and began to develop some products that they were selling to JC Penney, Bullock’s and others.
But when my dad had to go back to London for a work-related trip his visa to the US was cancelled. This happened just a couple of months after my younger sister was born in Santa Monica. So, my mom was left here with a newborn baby, a three-year-old and a business to run while my dad was stuck in London.
The initial plan was for her to shut down the business – which she did – and for all of us to move to London, so the family could be together. As things transpired, after my mom shut down the business and started packing our life up to move to London, we found an attorney that was able to get my dad his visa, and he came back to the U.S. And through some conversations with family friends, they decided to start a new business.
BB:
So, was the second business an office furniture business?
DM:
They started by bringing in container loads of both office and residential furniture from Italy and selling it with some success. At a show in Italy, where my dad was sourcing products, he found these inexpensive height-adjustable, ergonomic office chairs and imported a container of those and sold them faster than the other products. It really introduced him to the commercial furniture sector. My parents continued to work together and through the mid-80s focused on selling products to the mass merchandisers in the big box stores that had just started at the time.
One of their early customers was Price Club that eventually turned into Costco. They worked with Sam’s Club, Office Club, IKEA, Staples and the like—all high-volume businesses. Working with these major superstores and warehouse clubs allowed my father to adopt a vertically integrated manufacturing philosophy. And he went from sourcing finished product out of Italy to slowly bringing various component manufacturing operations in-house.
He eventually set up a vertically integrated manufacturing facility in Long Beach, California, where they were producing all the products and shipping direct to customers from there. It was high-volume business, but a very concentrated business model that worked well through the late 90s, until China came into our market as a major manufacturing powerhouse. Then their customer base started sourcing product out of China to save a few points, which at the volumes they were doing was quite substantial. And since my parents had a very concentrated business model at the time, this had a major adverse impact on their business.
This coincided with my graduation from USC, where I studied Industrial and Systems Engineering with the hopes of joining the family business and helping them streamline operations and manufacturing processes in the factory.
Ironically, my parents had warned me not to plan on coming into the family business, as it may not be there when I graduated. I disregarded their recommendation and studied engineering anyhow with the hope of joining them. But unfortunately, my graduation was right when the business faced a major challenge: they lost 85% of their customer base in two or three years. So, after graduating in 2002, my first project was helping them shut down the business – liquidating equipment and the building we had at the time.
At the same time, China had done away with the law that had required foreign investors to have a local joint venture partner. So, my father packed a suitcase and moved to China for the better part of the next five years, going back and forth, but spending the majority of his time in China.
He set up a pilot project where we had our own fully owned and operated manufacturing facility in China using western-style manufacturing processes, equipment and software. He said, “if I can’t beat them, join them!” He decided he’d go to China where labor is cheap, take the Western style of manufacturing and compete against this new wave of manufacturers out of China. The initial business model there was to sell to the same mass market, big box stores he was selling to outside the US. He started to do this quite successfully.
BB:
So, then, how did 9to5 Seating come about?
DM:
In 2003, I decided to launch 9to5 Seating to go after the commercial contract market, where we could diversify our business and not be at the mercy of such a concentrated customer base. As we started 9to5 Seating, we had to reinvent the business model several times over until we dialed into the hybrid manufacturing platform. That really was the foundation for our customers and our business. We adopted the same vertically integrated manufacturing philosophy of my parents’ business. We manufacture the majority of our own components utilizing Western-style manufacturing equipment and processes, but in China.
We found that by doing so we were able to build quality components at very competitive prices. Our ethos was always to control our own destiny, and we felt that being vertically integrated despite doing so on two continents allowed us to do that. At the same time, we set up a manufacturing facility in California where we did all the light manufacturing and all the value-added production: cutting, sewing, upholstery, assembly, packing and distribution. In addition, in the US, we put our focus on sales and marketing.
My father and I divided our responsibilities so each one of us could have a focus – he can focus on the China side of operations in component manufacturing. My focus was on the finished chair production as well as product development, sales and marketing. And my mother headed our finance and accounting. So the three of us continued to work together shoulder-to-shoulder growing the family business.
Then in 2019 we had the opportunity to become part of the Flokk family.
BB:
Yes, tell me about that.
DM:
As a result of the tremendous growth trajectory of 9to5 Seating over the past decade, we had attracted the interest of some of the leading acquisition-minded manufacturers. And ultimately, as we looked ahead, we wanted to find a way to further accelerate our growth by becoming part of a larger entity that had resources that could augment what we were doing on our own.
When we met the Flokk team, we learned very quickly that we share a lot of the same company culture, values and principles. When we visited them in Norway and then visited one of their plants in Europe, we were very surprised at the similarity between our production lines. At the same time, they share that same entrepreneurial spirit that’s been an important cornerstone of 9to5 since its inception.
Oftentimes larger companies get bureaucratic and lose their agility, but Flokk is nimble and makes decisions in a timely fashion. They’re also large enough and established enough that they’ve helped us to think a little more strategically. But mostly, there’s just tremendous synergy between their platform in Europe and our company here in North America.
So, In November 2019 we officially became part of the Flokk family. And already, in a short period of time, we’ve seen some of that synergy come to fruition. In the past year, we’ve brought some of their products into production at our factory in California. At the same time, they’re not only leveraging the 9to5 distribution in North America, but utilizing our factory in China for some domestic manufacturing of their products for the Asian market.
All the puzzle pieces seem to have just come together with the Flokk team. We can grow faster than ever and we’re more excited today about our future than we have ever been.
What I’m most excited about in the 9to5 and Flokk family future is some of the great new product that we have in development right now. A lot of it has been influenced by Scandinavian design, and we’ve really raised the bar with product design and development for the price points that we focus on. I’m really excited about adding more capacity to the 9to5 infrastructure and expanding into new product sectors as well.