Overseas connection is crucial for area businesses

Last Friday, the British and the United States met for the purpose of selling Southwest Florida real estate, in a move some might call revolutionary.

"There's nothing like this," said Nick Churton, managing director of Mayfair International Realty, one of the United Kingdom's largest real estate firms. "The tendency is to say this is a bit like this or a bit like that — well, you can't, because it's unique. But I think it's catching on."

Over coffee and pastries at Sanibel Harbour Resort & Spa, Mr. Churton announced a partnership with VIP Realty Group, one of Southwest Florida's premier sellers of upscale real estate. Although talks began prior to the housing meltdown, Mr. Churton said the recession that spread around the globe made the connection between overseas markets clear.

"What's different about this recession, or depression or whatever you want to call it, is never has the impact been such a global one," he said.

A number of Southwest Florida businesses have ventured to find customers in places as remote as Quatar, a country about the size and shape of a thumb on the globe; or inside the social patina of Asian business; or into the hills of Mexico. In each case, they found a global economy that has become increasingly interconnected.

CHURTON FOX Electronics sells mostly overseas

E.L. Fox's father started FOX Electronics in Fort Myers 30 years ago and its headquarters remains off Luckett Road. Designers there make electronic circuits called oscillators, using quartz. The circuits are used in cars, cell phones, laptops, copy machines and other electronics.

But of the company's $30 million in sales annually, much of it from its signature XpressO oscillator, not a single penny comes from buyers in Southwest Florida.

"A lot of the business, in the last eight to 10 years, has moved overseas," Mr. Fox said.

In 2000, 80 percent of FOX's sales were in North America. Now, 45 percent are in North America, while 45 percent come from Asia and 10 percent from Europe. Mr. Fox has offices in Hong Kong, Tokyo, Singapore and Bedfordshire (England).

LUBNER Especially in places like China and Asia, Mr. Fox says adhering to the local customs is a challenge.

"It's a different world," he said. "Things we take for granted are super important to them. In Asia, you can't make a cold call. You have to be introduced by somebody and then, maybe, after six months of meetings, maybe you get to do business."

As his market continues to spread around the globe, he's looking at setting up distributors in Switzerland, Latvia and Israel and placing more sales agents in China, South Korea and Japan.

"This is all since November," he said.

Most of his timing devices are sold to manufacturers in Asian countries like China, which can use them to produce electronics more cheaply than in the United States, so we can pay lower prices.

"We want that computer for $200, right?" Mr. Fox said. "How many people want to pay $1,000 for an iPod?"

The global recession has cut into his profits some.

"Demand is down across the board," Mr. Fox said. "Demand is down by 50 percent."

But there is one place he's not cutting back on spending: design work. He is building a new product to wow the market when the recession ends.

"When things do stabilize, we're going to have something our competition doesn't," he said. "It's an incredibly compelling project. Nobody else in the world will have it."

VIP goes global

VIP Realty Group will open a new office in London, in addition to its locations in Fort Myers, Naples, Bonita Springs and elsewhere in Southwest Florida. Mayfair, VIP's new partner, is headquartered in London and has 300 other outposts throughout the United Kingdom, where VIP can cast its net to attract buyers from overseas.

"Our whole challenge of working out of this recession is absorption of listings," said VIP President Charles C. Ashby. "So the wider your net, the more it increases your chances."

Mayfair director Mr. Churton said in these rough times, the partnership will give VIP's clients the reassurance of having salesmen do their bidding in Europe.

"Sellers like the idea that they have wider coverage," he said. "In Florida, if you're choosing an agent to represent you, you want your market to be covered. (And) over the last decade, the market has become more global. Buyers are looking at the United States as a great destination."

But English buyers may be looking for something different than VIP's American buyers.

"Americans just do not realize how rich they are," Mr. Churton said. "We're in a second-home economy, whereas you, in places, are in a fourth-home economy. The majority (of our buyers) are looking for a nice, sensible place they can vacation."

Annette Reeve, Mayfair's international director, who had flown in from London with Mr. Churton, added, "The British press is starting to say 'look at America.'"

But the fact that VIP attracts the European market is no news to many, including Mr. Ashby.

"All you have to do is just walk around a mall and listen to the languages — Canadian, French, German," he said. "Especially in Southwest Florida."

Robb & Stucky: Qatar to Costa Rica

Dan Lubner had just flown in from Qatar, a small Arab emirate halfway around the globe, and was going full-steam ahead, in spite of looking a bit bleary eyed.

He had been talking with architects, interior design firms, contractors and government officials there about expanding Robb & Stucky's customer base into that tiny country. The 94-year-old home furnishings store, founded in Fort Myers, has outlets in Naples, as well as Arizona and other states.

Mr. Lubner, president of the resort division, couldn't reveal the details of the Qatar plans.

"Ask me in two weeks," he said. But, he added, "From Costa Rica to Qatar, we've got large-scale projects going in lots of different directions. As far as the potential to open up storefronts (overseas), there are plenty of opportunities we're reviewing on a weekly basis."

The company has been shipping overseas for about 30 years and opened a showroom in Costa Rica two years ago. In addition, 10 percent of its average $300 million revenue comes from buyers overseas. Preferred Hotel Group, which has 700 properties around the world, including the Hyatt brand, is a client.

Robb & Stucky sells its line of home furnishings and patio furniture to clients who've purchased timeshares, vacation homes and the hospitality industry. Their target customer base is affluent, international buyers who may be looking to furnish a second home.

"Sometimes a fifth home," Mr. Lubner said. "We have the ability to custom fit a program around the country and around the world."

The greatest challenge to expanding overseas is working with local laws and customs.

"We go into every situation with an open mind and work with the customs and traditions of those local markets," Mr. Lubner said.

The key to their smooth expansion into overseas markets, as well as national ones, for Robb & Stucky, is a business model called "vertical integration."

That means they handle manufacturing, design and production duties all in-house, instead of outsourcing to different companies. That also helps them stay more price competitive.

"When you have those three teams working together, it makes for a seamless process," Mr. Lubner said. "From cradle to grave, we're handling every aspect of our local, national and international projects."

A worldwide growing middle class

Some countries have growing middleclass populations that will present a whole new customer base for businesses eyeing foreign shores, said Dan Borgia, Ph.D., professor of finance and director of the Institute of Chinese Studies at Florida Gulf Coast University.

"Countries like India, China, Brazil and others are growing at a faster rate than we have been growing," he said. "As they become stronger and as their middle class grows, they'll demand greater products and services. There are really great opportunities for American businesses (to expand overseas). Everything from water treatment services to airport control equipment and software."

The opportunities come with hurdles, of course.

"It's more complex and difficult and risky than operating purely domestically," Professor Borgia said. "You're working in different cultures, with different political and legal systems and different exchange rates. If you do decide to work overseas, I'd work with the government or Enterprise Florida to lead you in the right direction. My advice would be to test the market first and try to export it first to learn about the market and learn about the demand. Get your feet wet before you set up an overseas subsidiary."