The FINANCIAL -- The premium class furniture brand- Forum by New Light will establish a branch in Batumi in 2015. The company is investing USD 2 million in it. New Light, better known for its luxury lighting systems in Georgia, is continuing to actively promote energy efficient products. Being focused on quality is what the company remains loyal to as it views this as the only way to get established as a brand.
New Light has seen turnover grow by 15% in 2014 in comparison with the prior-year period. At the end of 2013 the company invested a huge sum and opened the premium class image showroom Forum by New Light. From 2014 Georgian customers of the brand have been offered furniture produced in Europe. The showroom is located in the brand’s central branch on Agmashenebeli Avenue.
“New Light was established in 1999. The company was originally projected with a long-term perspective. Accordingly, quality and development have always been our main priorities. The company has been dependent on the development of the economic situation of the country. However, we always tried to step ahead and be innovative on the market. Maybe in some cases this proved risky as the market wouldn’t instantly recognise our steps. However, later, when the domestic market was reaching the same stage of development, we would appear as the first players. Accordingly, I would positively rate the strategy of being advanced,” Temur Ardoteli, General Director at New Light, told The FINANCIAL.
Q. The last branch that you opened outside of Tbilisi was in Zugdidi in 2012. Why was there a two year pause in your regional development?
A. Until now, all the resources, especially after adding the showroom, were focused on Tbilisi. This led to a pause in our activities in the regions. However, as soon as we finished this project we started working on expanding our shares in Batumi. A new showroom is going to be opened in Batumi. It will help us to increase our market share. In general, these processes are not developing very dynamically in the regions. Economic activity is relatively low. However, due to our long-term vision we are continuing our activities in the regions and will be well-positioned after the economic recovery.
We plan to invest over USD 2 million in Batumi. This will be news for our customers, for the population there. Batumi is a city of growing development. However, the trading infrastructure remains less developed. In many cases, consumers there have had to purchase furniture in Tbilisi. The required transportation incurs additional costs and resources. However, Batumi residents will from now on be able to receive products of the same price and quality, and in their own town.
Q. New Light has 15 years of history as being the leading store of lighting systems. Why did the company decide to start offering furniture as well?
A. Furniture is connected to interior design and lifestyle. Lighting systems are also connected to these features, so furniture was always quite close to our concept. We gained big experience regarding consumers’ attitudes towards design and interior. We learned which trends were more acceptable for customers. New Light created its style which includes innovative and modern lighting. The furniture segment was more or less saturated but we entered it with our individual approach. We decided not to offer the same niche which was already presented. New Light started offering furniture of different and innovative styles instead. The showroom has been highly appreciated by customers. And we are sure that our furniture will gain the same popularity as the lighting systems have.
Q. What kind of furniture is presented at Forum by New Light and what are its advantages?
A. We present soft furnishings, living and bedroom furniture, as well as outdoor furniture. Quality has been our starting point in terms of furniture as well. In general, emphasizing quality is always risky as in a short period of time it has to compete with lower-quality products. You need some time to resist the temptation to yield to this trend. However, our 15 years of work shows that in the long run it will definitely bring about positive results. Moreover, if you do not have a focus on quality, you cannot be successfully established as a brand. We often found European furniture on the market. However, we see a lot of consumers being misled here. ‘European’ does not always mean that it is produced in Europe. This is important to note. European furniture often means a name registered there or of European origins. Meanwhile, many products are actually manufactured in other countries. I’m not saying that this is bad, or necessarily means poor quality. I’m just saying that consumers should be openly informed about it. Our products are produced and imported from Germany, France, Italy and Spain. We also have furniture for lower budgets, but still of good quality, which is manufactured in China. However, we always inform our customers about this. Sincerity with customers is our main motto. Unfortunately it is rare to find in the Georgian reality.
Our niche has always been segmented. Accordingly the demand for European products is higher than for Chinese. Our customers are those who are looking for different, special and high quality products. They find those here.
Q. What has been the impact of the country’s political changes on your business?
A. Political-economic changes do affect our business. No business can claim to be beyond these processes. Any change, whether positive or negative, has a corresponding impact on business. However, our company has never changed its policy to interrupt development, but instead just waits till the situation changes. We cannot change something which does not depend on us. Accordingly we have always remained dynamic and moved forward. Actually such an approach is always beneficial for businesses. This is our approach and we do not plan to change it.
Q. The usage of Halogen lamps are banned in European and many other countries. How popular are LED lamps among Georgians?
A. Lamps, like any other technology, have passed several stages of development. Before LED, CFL (Compact Fluorescent Lamp) were more popular in Georgia due to their competitive price. Today, the future of lamps is LED technologies. We have therefore turned to LED technologies. A person who knowingly makes their purchase chooses LED. This is evident in our turnover. The demand for LED lamps and lighting is increasing not only year by year but also quarterly. The demand is booming from the private as well as the public sector. Currently the price of LED lamps has almost equalled that of CFL lamps. The price starts from over GEL 6. Together with lamps, it is important that the demand is also rising towards light-emitting diode (LED) technologies. In order to make these products affordable to a wider range of customers we made extra investment with our OEM and added a special second segment of products.
Q. A big advantage of LED lamps is their long term validity that sometimes extends to 20-30 years. Such products seem to be more convenient for outdoor lighting. Are you cooperating with the local government in this regard?
A. Our main direction and priorities lie in the private and retail segment. We are focused on the opening of new showrooms. We are going to enter different cities and regions of Georgia. We want to present our products widely across our network. In some cases we have participated in public procurement. However, it is not our priority. In addition there is a need for some bearing on work performance. This is not just delivery of lamps. Accordingly we are not involved in providing such services.
Q. The Ministry of Environment of Georgia organized the event ‘Green Business in Georgia’ in which Forum By New Light was announced winner of the nomination: The Green Building of the Year. How actively you are involved in environment protection?
A. We are closely tied to modern trends. Ecology is a relatively big challenge of our time. In general, our work is quite tightly linked with ecology. The future of lighting is light-emitting diode (LED) technologies. We are actively promoting them on the Georgian market. As with any other technologies, lighting systems are also developing. They are becoming more accessible due to their reducing prices. Accordingly, whereas previously LED technologies were acceptable for limited consumption, currently they are becoming a mass product. LED technologies have two main advantages. First of all they reduce the consumption of energy, and second: they are more sustainable and valid. It would not be proper from our side to just push citizens to switch to energy efficient technologies. We have carried out the responsibility of implementing them within our company as well. Accordingly, our new showroom Forum from New Light was built with energy efficient technologies at every stage of construction. We use solar lighting. There are panoramic roofs in the hall and through these sunlight floods in throughout the day. So we specifically do not use electricity then. The same can be said in terms of heat insulation. This provides us with great savings.
Q. Which promotional campaigns are you using for customers?
A. New Light has issued Club Cards to its corporate clients. For the retail segment we have Light Cards. They are encouraged by receiving 5% from every purchase back on their cards. Relations with the corporate segment are more diversified due to the size of their purchases. We have dealers in cities and regions where we are not represented in the form of a store. Accordingly, we still manage to get a position in Poti or Gori, which is not as active as Batumi. Reaching customers regardless of location is one of our main priorities. When you have the ambition of leadership on the market you must take certain steps which may not always be commercially profitable for some time.
Q. How actively are you cooperating with neighbouring Azerbaijan and Armenia?
A. We are not focused on re-export. However, we do have a practice of cooperation with Armenian and Azerbaijani companies. Our company always has stocks in place. It is one of our strongest sides. In practice we used to meet companies which offer products from catalogues, ask for advanced payment and do business this way. We invest a lot in warehouse infrastructure and will continue to do so in the future. With the wide range of our assortments and large reserves we manage to meet consumers’ demands fast and in the required amounts. It was the same case with Azerbaijani and Armenian customers. Legal entities required products in a short time and we were in place to serve them. Besides this, purchasing by foreigners has been largely stimulated by Tax Free service. Retail foreign consumers are gladly purchasing our products.
Q. How do you encourage your employees?
A. New Light employs 130 people. The number will increase in line with new projects planned for 2015. We have implemented an entire modern standard for employees, such as insurance, education and training to enhance qualifications. In this regard we have a separate budget. The retraining of employees becomes useful in accordance with the development of the company. Any customer can see how an employer cares about their staff. Our attitude is expressed in the high level of service that we offer. Any company can offer a product or service of the best quality. However, if it is not provided with the proper service quality then the business will fail. Accordingly, we are well aware of the importance of positive and encouraged employees for our company.
Q. Low quality of service still remains a big challenge in Georgia. What are your recommendations for improving this situation?
A. Paying attention to the quality of employees only at the beginning of the recruitment is not sufficient. They need constant attention. This means that employers should listen to them, encourage and motivate them. Opportunities for professional growth and development motivate workers. In our case, we actively promote our staff. We annually reveal and award the best workers. We give material rewards to the most successful workers. We value our staff not only financially but also morally. While selecting an employee it is important to offer a position in accordance with their nature and interests. It will be difficult to gain success if a person does a job which is not their calling. We have had cases when employees from the front office have moved to the back office and vice-versa. It has worked really well. Building relations between employer and worker that are based on trust is also really important. Mutual trust ultimately results in the success of the company.