VICTORVILLE, CA - When you visit new Sephora shops inside JCPenney stores and browse through cosmetics, those products are most likely displayed on fixtures shipped from Victorville.
Modern Space Pacific Services, whose U.S. distribution hub is located at Southern California Logistics Airport, has manufactured store fixtures for 85 Sephoras — including the new Victorville shop — this year. The company’s clients include retailers such as Gymboree, Coach, Polo Ralph Lauren, Nike and Apple Stores in Asia.
Jared Allred, senior project manager for Modern Space, said he was shopping at Beverly Center in Los Angeles when he saw four stores in a row that used his company’s products.
“You have that pride that we made these products and helped get them there,” Allred said. “It’s an opportunity to show (your family) what you provide.”
Headquartered in China, Modern Space manufactures its products in China and ships them to the Long Beach port before they get assembled in Victorville and distributed throughout the country. The company benefits from operating its own plant in Shanghai and own logistics channel in the United States.
Many competitors work as brokers between Chinese manufacturers and U.S. retailers and mark up the costs, said Modern Space Vice President Douglas Goates, who oversees the Victorville operation. Even when these competitors own a joint venture with Chinese companies, they could lose some control, he said.
Goates said outsourcing isn’t so easy.
“If they haven’t done the homework, they can be taken advantage of,” Goates said. “A lot of times, if you’re actually not based off of there, you may negotiate a contract with a company that seems reputable, the sample looks good, but all of a sudden when the goods are shipped ... they arrive over here and it’s not what you agreed to.”
Modern Space’s CEO and founder, Jonathan Dickinson, works out of the Shanghai office now.
Dickinson founded the company in 1989, making speaker cabinets in Los Angeles. When the company began manufacturing bathroom vanities for hotels, he moved manufacturing to China.
Bathroom vanities, as well as store fixtures, require high-quality finish to withstand daily abuse. It was expensive to use such a finish in California because of regulations, Goates said.
“We can do almost 10 hours worth of paint work over there for less than what we pay for one hour here in the U.S.,” Goates said.
Moreover, Modern Space has installed a few pieces of equipment worth a few hundred thousand dollars each, which are rare in other Chinese factories. The 500,000-square-foot factory in Shanghai employs about 350 workers.
While offshoring can often save costs for American manufacturers, Goates said in some cases it’s cheaper to produce in the United States when they consider duties and shipping costs or time. Modern Space has partnered with a few Southern California suppliers, he said.
“It’s a situation of using the best of what’s available to you,” Goates said. “Companies have to not be afraid of technology. Sometimes it’s a little scary to make a commitment on machinery that costs $250,000 but you have to look at the circumstances of what that could do to make your manufacturing more efficient.”
Modern Space has gone through tough times, especially during the recession from 2007 to 2009 when retailers were holding off on remodeling.
But now there are signs of recovery.
Crazy 8 is opening stores across the country and orders are flying in, Allred said. Between October and February is usually when stores stop remodeling to focus on holiday sales. But this year, they are ordering new fixtures even for December.
“They’re making up for lost time,” Goates said. “Just wait another year and you’ll see more growth for us. We’ve got some pretty big plans.”
Photo courtesy of the Mall of Victor Valley