13 Feb Reshoring: Made in the USA
Chinese-born CEO Mei Xu is pushing for her new home country to get its manufacturing groove back.
Mei Xu had her entrepreneurial epiphany while walking through a high church of capitalism: Bloomie’s.
It was the early 1990s, and the Chinese-born Xu was working in banking and living in New York City, where she loved to shop. “After growing up in China, where the stores were still state-run, I felt like a kid in a candy store,” says Xu, who had trained to be a diplomat before she immigrated to the United States to try business instead. While Xu was drawn to the sleek fashions of Donna Karan and Calvin Klein, she was dismayed by the old-fashioned, and perhaps unsophisticated, home décor offerings on the store’s top floor. “I would say to my husband, ‘All of these women are wearing minimalist fashions, so when they go home, why do they sleep in Grandma’s bedroom?’”
She decided to start with one home accent—candles—and in 1994 Chesapeake Bay Candle was born. Today, the sleek, scented candles are available at Target, Kohl’s, Bed Bath & Beyond, and Hallmark, and have helped build an $86 million business. Xu and her partner-husband have also launched their own retail site for home furnishings, called Blissliving Home. She’s gradually shifting the company’s manufacturing operations to the United States—and even spoke about that decision at a manufacturing panel hosted by President Obama.
Diversity Woman spoke with Xu about having the confidence to launch a style-based business, the pros and cons of “reshoring,” and the untapped allure of that Made in the USA label.
Diversity Woman: Was your original career plan to be a diplomat your dream, or your parents’?
Mei Xu: When China was opening up in 1976, people realized that the country was too closed in—that there were no diplomats who understood other cultures. So they did something amazing and opened eight middle schools so that kids as young as 12 would learn English in an immersion setting. My mom thought it was a great idea. I’m a people person and a talker—my father and mother have always thought that I talk too much—so my parents were interested, and I was part of one of the first groups of kids to go through the program.
DW: What advantages did that education give you?
MX: I think the language immersion gave me a big advantage—there’s a big difference between learning and living a language.
Today I have a passion for children to learn a language when they’re young, when they can’t yet be influenced by stereotypes. We give to schools that offer programs to underprivileged kids. It’s so important to engage the local community.
It also gave me a global perspective. I have never felt nervous [doing business in another country]. When you watch the news, you understand it from the back end, and you can also make decisions that some businesspeople can’t, because they’re too local—limited in focus to their own country or state, even their own county.
DW: It takes guts to create a company based on style and using materialsówax, scents, fabricsóthat youíve never had experience with. Was that daunting?
MX: My mother always said I was a curious monkey, even though I was born in the year of the goat—I was off by a year. Once, when I was in Mexico City looking at business options, I asked the guy who was taking me around so many questions that he got nervous, like maybe I was a spy! But unless you have all the answers, you can’t be the leader. You can try to delegate, but in the end, the science and the passion will have to marry. If you know what you want, you need to know why you can or can’t get that result.
DW: You named your company after your first, and current, American home, in Maryland, but you have largely done your manufacturing in Asia. Was that just a cost decision?
MX: The U.S. is one of the most welcoming countries in the world, and if you are a mom-and-pop that wants to open a cupcake store, it’s not so hard. But to open a factory, you need many different permits, and from different places, and it gets really tricky. In China, Vietnam, and other countries that are hungry for new business investment, you can fulfill all of the requirements in one place and start building. But our country has lost that edge.
DW: What are the incentives to even try manufacturing here, then?
MX: The U.S. has less bribery than anywhere in the world and more transparency in the process. We also have the social compliance—protections for labor, fair pay, environmental rules‚ which are good, and so important.
DW: How did you come to join the panel with President Obama?
MX: Someone at the White House had read a Wall Street Journal article about our company and our frustration in opening the factory. The White House reached out to us and wanted to know our circumstances. They were talking to manufacturers who had moved jobs back to the U.S.—what a Boston consulting report has called “reshoring.” So we had a long conversation and they invited us to this forum. It was an awesome experience. I stole the limelight, though, by speaking too long!
DW: What was the consensus from the other participants?
MX: They were all pretty big Fortune 20 companies, but everyone had similar reasons for leaving overseas manufacturing—rising labor costs, increases in material costs, and shipping costs. We also talked about having proximity to the best design and research.
I brought up something, though, that nobody talks about—the big market overseas for Made in the USA. Chinese tourists come here and want to bring something home, but they look at the label—even in our store in Shanghai—and they ask, “Why is it made in Vietnam?”
DW: What do you think the value of that label is?
MX: It’s about authenticity, and it’s amazing how people put authenticity above anything else. There is something about Made in America that is very wholesome. In many emerging countries, such as Brazil and India, the U.S. is still about inspiration, hope. It’s about preserving freedom and living a natural life without depriving the younger generation of clean air and clean water.
We export our pop culture, such as Lady Gaga, but imagine the real things that we have not exported that could be [exported] and not necessarily expensively either. What I was trying to communicate is that it’s time to move our factories back.
DW: Whatís next for your company?
MX: Our number one focus is expanding our opportunities. We have 117,000 square feet in our Maryland facility, and we’ve only occupied 50 to 60 percent of the capacity. Our number two goal is to grow our high-end business to export to Europe and Asia without any style change—they like a similar style there as we do here. Number three, we want to innovate. I’m interested in using diffused fragrances more effectively—like more of a lifestyle statement at home and in hotels or public spaces.
DW: What books have you read lately that inspired you?
MX: I recently read Imagine: How Creativity Works [by Jonah Lehrer], about how creative minds think and come up with solutions. I am always intrigued by how other companies come up with their best ideas in design, and how I can motivate my designers. 3M has a good rule: 20 percent of the time, employees should be out of their desks doing creative thinking or going to school. They just need to share what they learn, like at a bazaar where they present their creations, and how they came up with them. Think about those Post-it Notes® that 3M created! I want to have my share of Post-it Note moments, and I’m trying to learn how to cultivate that environment. DW
Katrina Brown Hunt, based in San Diego, has written for Fortune Small Business, Smart Money, and the Seattle Times.