Entrepreneurs: Legacy of Dreams

For Peter Kim, the call to join the family business came as a rude awakening. Snoring away a spring-break morning at the University of Southern California in 1994, Kim picked up the phone to hear his father Sang Hoon Kim shouting at him in Korean. "He goes, 'The company's got problems. Everybody's got to help out,'" recalls the younger Kim. The son did a lot more than that. At the time, office workers were no longer buying the polyester blouses the family company, Protrend, churned out. Sales were tumbling 50% every year. What's more, the father had invested in real estate during a market peak, and as a result the company shouldered $10 million in debt. Today Peter Kim, 33, is CEO of a debt-free, $15 million-a-year business. In 1999 he launched Drunknmunky, an Asian-influenced men's street-wear line that pulls in the bulk of the company's revenue. Battling low-cost production from competitors in China and elsewhere, Kim decided to pursue the higher profit margins in design and retail. "That's where I believe the industry is going: either you're a brand or you're dirt cheap," he says.

The Kims are part of a phenomenon sociologists call ethnic niche business, in which an immigrant group comes to dominate an industry, often with no discernible connection to its original culture. Think Chinese and laundry services, Arabs and gas stations, Koreans and groceries. And garments too. Experts estimate that more than half the 144,000 garment workers in Southern California are of Korean origin and up to half the companies are Korean owned. Entrepreneurs of Indian origin today own 38% of all hotels in the U.S. and more than half of budget motels. Mexican Americans whose forebears worked California's vineyards are becoming owners. Once, immigrant business owners were reluctant to pass the torch to their kids, hoping their labor would hoist the younger generation into more prestigious professions. That's changing. As the businesses grow, American-born heirs are increasingly willing to follow in their immigrant parents' footsteps. Armed with native English, advanced education and a comfort with change, the new generation is modernizing the family businesses in ways their parents never dreamed possible.

This generation's business strategies and goals far outpace their parents'. Drunknmunky, for instance, publicizes its popularity with hip-hop acts like Cypress Hill and Linkin Park and sponsors raves and rap concerts. Kim's ambitions include music and video-game production, accessories, bags and shoes. "I'd like to be more of a household brand, not just a clothing company--like [Ralph Lauren's] Polo," he says. Unlike their parents, Kim and his peers pursue deals outside their immigrant communities; Drunknmunky works with partners in FUBU, the African-American-owned clothing line. Instead of hewing to production, most Korean-owned companies are now full package, offering everything from fabric to manufacturing to export for major American labels, says Bruce Berton of Los Angeles' Fashion Institute of Design and Merchandise (where half the students are second-or third-generation Korean Americans).