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Doral firm finds successful niche in luxury kitchen appliances

A view of kitchen displays at La Cuisine International company showroom in Doral.
A view of kitchen displays at La Cuisine International company showroom in Doral. pportal@miamiherald.com

Josu Gaubeka got into business by selling kitchen sinks out of his truck in Caracas, Venezuela, when he was a college sophomore. Now he runs companies based in Doral that log multimillion-dollar annual sales and provide high-end kitchen appliances to customers in South Florida, Latin America and the Caribbean.

During his second year at Caracas’ Andrés Bello Catholic University in the 1980s, Gaubeka wanted to make some money during a summer break by starting a small business. His mother loaned him $3,000 and, after making arrangements with a friend whose family manufactured kitchen sinks in Caracas, began selling sinks to local appliance retailers.

The summer business went so well that when classes started again, Gaubeka expanded his product lines to other appliances, studying in the the mornings and making sales and delivery calls in the afternoons.

After Gaubeka received his degree in economics, he decided to continue as a distributor of kitchen appliances. “I could make a better living for myself and my future family by selling appliances than by working as an economist,” Gaubeka said.

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At La Cuisine International’s showroom in Doral, company executives show how a Gaggenau induction cooktop works. From left: Rafael Guerrero, vice president; Josu Gaubeka, president and CEO; and Karene Krijt, business development manager. PEDRO PORTAL pportal@miamiherald.com

By 1994, his success had attracted the attention of three foreign manufacturers of luxury kitchen appliances — Gaggenau, Bosch and Viking — who asked him to be their distributor in Venezuela.

The economist/entrepreneur later moved to Miami and, in 2004, joined with a former partner to set up La Cuisine International, a B2B company that buys luxury appliances and sells them to distributors in Latin America and the Caribbean.

Over the years, the company expanded to provide a wide array of luxury brands to distributors in Colombia, the Dominican Republic, Central America, Peru and other countries, as well as to high-end real estate developers in South Florida. Based in Doral, La Cuisine International now has 147 employees, a retail subsidiary in Miami called La Cuisine Appliances, partnerships with appliance distributors in seven countries outside the U.S. and a regional service and training network based in Puerto Rico.

The luxury appliances are more expensive than what customers would typically see at retail appliance dealers. For example, a Gaggenau 4.5 cubic ft. single oven can retail for more then $6,000 and a similar-sized Miele can cost over $5,000. These luxury brands also make cheaper appliances, but La Cuisine International focuses on high-end condos where the kitchen alone can cost $75,000 or upward of $200,000.

Annual sales at La Cuisine have grown from less than $1 million during the company’s first year of operations to more than $28.6 million last year.

A key to the company’s growth and success was what Gaubeka learned from his experience in Venezuela.

“There are niche markets in the region for high-end appliance manufacturers who didn’t have sales and service networks set up in smaller countries,” he said. Major appliance manufacturers in the U.S. and overseas invest in sales, distribution and service networks in the biggest Latin American countries, like Mexico and Brazil, he said. But there are luxury manufacturers — selling refrigerators that may cost $10,000 or more — who don’t.

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A view of cooking appliances at La Cuisine International company showroom in Doral. PEDRO PORTAL pportal@miamiherald.com

“This is where we developed our markets,” Gaubeka said. Luxury manufacturers like Gaggenau, Bosch and Miele want to make sure that their distributors in smaller markets represent the brands well, install their equipment correctly, and provide expert service.

As La Cuisine International grew, it developed local partnerships in Latin America and the Caribbean with existing appliance dealers and trained technicians for each product line. In each market, it has invested to ensure quality service from installation to maintenance and repair.

It also expanded in South Florida by offering kitchen packages with different price ranges to designers and developers, with a focus on luxury kitchens. In South Florida, La Cuisine International sells to developers of luxury projects such as Bay Harbor One, The Ritz Carlton Residences in Sunny Isles Beach and Alina in Boca Raton.

It main subsidiary, La Cuisine Appliances, was founded in 2005. With lavish showrooms in Aventura, Coral Gables and overseas, it sells to retail customers.

“Our clients are looking for value, quality and reliability,” Gaubeka said. “Thanks to our focus on service, we’ve become one of the largest luxury appliance distributors in Latin America. And now we are expanding to more business and retail clients in South Florida.”

Company name: La Cuisine International.

Leadership: Josu Gaubeka, co-founder and CEO, and Rafael Guerrero, vice president.

Founded: In Miami in 2004 by Josu Gaubeka and Andrew Hermann (who left the company in 2010 to join his family’s business in Oregon).

Ownership: Josu Gaubeka (majority) and Rafael Guerrero. Local partners also own shares of regional subsidiaries in seven Latin American and Caribbean countries.

Headquarters and main warehouse: 2005 NW 115th Ave., Doral. The company also has offices, showrooms and warehouses in the Caribbean and Latin America.

Employees: 147 full time in Miami, Latin America and the Caribbean. More than 50 work in Miami.

Products: The focus is on luxury kitchen appliances made by Bosch, Miele, Gaggenau, Thermador and smeg. The company also sells other high-end products including those made by Viking, Whirlpool, Frigidaire, Faber, GE Monogram and Samsung.

Clients: Real estate developers, architects and designers who work on high-end condos, rental properties and individual homes, as well as luxury appliance dealers in Latin America and the Caribbean. Clients include 13th Floor Investments, Moss & Associates, Key International, the Melo Group and GarciaStromberg GS4 Studios.

Financials: Total income from La Cuisine International (B2B) and its main subsidiary, La Cuisine Appliances (B2C), was $28.6 million in 2018, up from more than $17.2 million five years ago. La Cuisine also earns offshore revenues from subsidiary companies in Colombia, Panama, Peru, Costa Rica, the Dominican Republic and Guatemala. About two-thirds of the company’s business comes from the Caribbean and Latin America, and one-third comes from Florida.

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Josu Gaubeka and Rafael Guerrero discuss business with financial analyst Manuela Rodriguez, in La Cuisine International’s office in Doral. PEDRO PORTAL pportal@miamiherald.com

Competitors: In South Florida, Ferguson and Monark, part of Sears Holdings. In Latin America and the Caribbean, there are several manufacturers and independent dealers carrying various appliance brands.

The difference: “Service and passion for our clients is in our DNA,” Gaubeka said. “We represent the best brands in the world, but even the best products require maintenance and service. We have been investing in our service network (including installation and maintenance) since our inception, and we’ve been able to build many long-term relationships with clients. Most of our sales go to repeat customers, and they recommend us to their friends and family members.”

Client view: GarciaStromberg GS4 Studios, a group of architects, interior and graphic designers, artists and musicians based in West Palm Beach, has been working with La Cuisine International for about seven years. “We’ve worked with them on multiple luxury projects and they are key consultants and suppliers for us,” said Jackelin Rodriguez, the firm’s director of interior design.

GarciaStromberg works with developers and builders on high-end residential, mixed-use, resort and other projects and La Cuisine helps with selecting “sleek, clean kitchen designs” for condo units that can costs millions of dollars,” she said. “Kitchen appliances are a key selling point, and Josu is very innovative and has an excellent knowledge of the appliance world. La Cuisine is fantastic.” Moreover, customer service is critical, and La Cuisine provides personalized customer service: “High-profile clients don’t want to dial an 800 number and wait around [like the rest of us] when something goes wrong,” she said.

Business lesson: Between 2015 and 2016, La Cuisine opened three subsidiaries in Peru, Costa Rica and Guatemala in less than 12 months. This drained cash flow, strained operations and caused the company to lose focus on its established markets. “We learned that we need to consolidate each subsidiary really well before opening the next one,” Gaubeka said. “That lesson helped us postpone the decision to open the Dominican Republic subsidiary until the end of 2017, waiting for the right time and the ideal business partner.” Today, the units in Peru, Costa Rica and Guatemala are operating efficiently and growing.

Strategy and outlook: La Cuisine plans to increase sales to existing clients, add new developers and builders in the U.S. (especially South Florida) and overseas while growing the company’s online business. The outlook is for very strong sales growth in 2019 and beyond.

This mansion just broke the record for most expensive house ever sold in Miami-Dade. The 10-bedroom, 14-bathroom estate in the exclusive Miami Beach enclave of Indian Creek has sold for $50 million.

Joseph A. Mann Jr. can be reached at josephmannjr@gmail.com.

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