On the back of a report in The Australian which suggests approximately 67 per cent of worldwide businesses are family-owned, Neos Kosmos spoke to Nick Koukouvitakis, whose family owns furniture wholesaler LV Furniture, about how the business first came to fruition and how it continues to sustain itself in an ever-evolving global market. LV Furniture supplies large-scale corporations like Harvey Norman and Forty Winks, with its main office showroom in Melbourne, and smaller warehouses in Perth and distribution centres in Brisbane.

Having migrated to Australia in 1964, Nick’s father Stelios was approached by a family friend who was considering a move into the business sector. It was that move that first got the Koukouvitakis family into furniture wholesaling.

“My father started the business in 1977. He was in hospitality originally, or one of the many things he did as a first generation Greek, he went through quite a few jobs and professions. A family member of his was trying to set up a furniture manufacturing business and dad helped him along the way and said to him ‘look why don’t we start this up together’ – and that’s how he started. He wasn’t in the trade, he wasn’t a professional as such, he wasn’t a cabinet maker or a furniture maker, he didn’t have any knowledge or expertise, but he saw an opportunity.”

In over 30 years the family has transformed and expanded the business to meet local and global trends. It is now run by Nick and his two brothers-in-law, but his 73-year-old father still has an influential say in the business. Nick says it is vitally important to remain transparent at every level, and changes to the business model are made as a family unit – and one of those important changes was moving beyond a manufacturing model.

“We were manufacturing up until 2008. From 1995 we were bringing in complementary lines, importing products that we couldn’t make here or that weren’t viable to make here. So from ’95 (that’s when I kind of came into the business) we started to import and in 2008 we completely closed down manufacturing and we are now solely importing.

“The biggest change has obviously been due to the importing and South-East Asian expansion into the furniture business – it was very hard to compete. But there’s an old motto that says if you can’t beat them, join them.”

With growth throughout South-East Asian countries booming and a fluctuating Australian dollar, many local businesses have found it difficult to justify maintaining a manufacturing line. Nick explains that the differences start with the minimum wages set in Australia, compared to countries like Poland (which accordingly is the second biggest furniture exporter in the world) and Vietnam.

“In Poland their minimum monthly wage is €300, let’s say it’s €400 all up including their superannuation. When you compare that, €400 equates to $600 a month and our minimum wages here in manufacturing are in excess or close to $3,000, it’s five-to-one. In China or South-East Asia it’s probably eight-to-one. So for every eight workers in South-East Asia, in Vietnam for example, it’s equivalent to what you’d pay one person here in Australia. So we’re way behind.”

Within the last year the business has ventured internationally, and is now supplying overseas clients. Nick and company have also set up an office in China, and the expansion so far is paying dividends.

“It’s pretty good! It’s not a big part of our business but it’s growing. We have a couple of customers out of Africa, so that was like a by-product of what we do. But when you’re dealing with overseas factories and you’ve got the marketing and the product and you’ve done the development, then it’s easier to expand into other countries. Which is a new phenomenon, it’s only happened recently.”

Since 2008 LV Furniture has grown approximately 300 per cent, after it closed its manufacturing arm.