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The Honolulu Advertiser
Posted on: Wednesday, March 12, 2008

Blue Hawaii founder has big plans

By Curtis Lum
Advertiser Staff Writer

Hawaii news photo - The Honolulu Advertiser

Michael Zhang, shown here at his Blue Hawai'i Lifestyles store in the new Nordstrom wing at Ala Moana, plans to have up to 50 stores in China in the next seven years.

JEFF WIDENER | The Honolulu Advertiser

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Michael Zhang was a nuclear physicist and owned a research and development technology company in Shanghai, China, when he moved to Hawai'i in 1990.

Because he had no ties here except for his wife who was pursuing a master's degree at Hawai'i Pacific University, Zhang took on odd jobs to survive. His first was as a Kirby vacuum salesman, a job that he said didn't last long.

"I didn't sell one," Zhang said.

He went on to work nights as a busboy at a Kyotaru restaurant and was a salesman at a T-shirt wholesale company during the day. It was at the T-shirt firm that he caught the eye of its owner, who believed Zhang was better suited to run the company.

The owner came up with a four-year payment plan for Zhang, who bought the company, Sea Sky USA, in two years. Although the company was doing well, Zhang had bigger plans.

In 1996, he acquired Blue Hawai'i Surf, which made surfboards. But when Zhang lost the company's top board shaper he decided to take the firm in another direction.

"If I'm short, I don't play basketball. So I wanted to do something different," Zhang said.

He kept the Blue Hawai'i Surf name, but dropped the surfboards to develop a line of clothing and apparel to fit the lifestyle of urban skate and surf enthusiasts.

In 1997 Zhang opened his first retail store in Waikele and, following the success of that store, opened a second shop at Ala Moana Center in 2003.

Zhang said the stores succeeded because he wasn't competing with the island's many other surf shops. His products, under the name Eighty Four Skate, targeted the "hard-core" skater, while his Blue Hawai'i label was more a "general lifestyle" line.

With a firm grasp on consumers in the 16- to 25-year-old age group, Zhang set his sights on older people and also his native China.

His market studies showed that China lacked a consistent supply of health food and nutritional products, so he came up with a concept that he believed would work here as well as in China.

"Hawai'i people are so health conscious and we live longer and have a very good health image," Zhang said. "Chinese people who come to the U.S. want to shop at Costco. Why? They buy two things: one is chocolate and the other nutritional (items). They go back and give to their friends and co-workers because it's safe."

Last week, Zhang opened Blue Hawai'i Lifestyle in the new Nordstrom wing at Ala Moana Center. He says the store is a combination Jamba Juice, Starbucks and Body Shop that features organic coffees, teas and smoothies made with deep-sea water.

Blue Hawai'i Lifestyle also has a line of Noni products, organic macadamia nuts and salad dressings, soaps and lotions, and Hawaiian music CDs and books. Zhang called the Ala Moana outlet his "franchise store," which he said will be the model for dozens of stores across China.

Zhang said he plans to open three Blue Hawai'i Lifestyle stores in Shanghai in 2009 and believes he can have 50 stores in the next seven years in China. He anticipates these stores bringing in $50 million in sales in five years.

"We think that we have a very good chance because this area is virgin in China," he said.

Zhang said he doesn't plan to grow too much locally, with stores possibly in Waikiki, Waikoloa on the Big Island, and one in West Maui.

Zhang believes running a successful business has a lot in common with being a good physicist. He said each needs to be good with numbers, know logic, and have an unlimited imagination.

He also said he's done well because of his early struggles as a door-to-door salesman and busboy.

"When I was in the airplane (coming to Hawai'i), I told myself that you have to forget yourself. I owned a company before I came here, but when you come here you have to start all over again," Zhang said. "When you work for a restaurant, especially a busboy, it's a tough job, but I think it was a very good mental exercise for me. Tough experience is a good learning curve. It makes you more mentally strong."

Reach Curtis Lum at culum@honoluluadvertiser.com.