The next time you’re in New York City’s trendy South-end haunt NoLita, it might be worth popping into the Mogu America home furnishings store to, um…cop a feel. The store’s stock of cushions and beanbag chairs are like nothing you’ve ever touched; they’re soft, tactile and compulsively squishable. And Mogu’s patented material might just be what it takes to turn the plush category on its head.

Yoshinobu Ishida, president of Osaka, Japan’s polystyrene-based product manufacturer Eisukasei, stumbled onto the idea when he was looking for a way to recycle the Styrofoam beads left over from bicycle helmets his factory was churning out in 2001. After a few dry runs, he came up with tiny, durable, uniform-sized powder beads made from the polystyrene. Ishida patented them, encased them in two-way stretch spandex, and thus the Pom Pom Cushion was born.

Next, Ishida went door-to-door on a campaign to persuade Japan’s retailers to try the product in their stores, and he set Mogu up as a formal subsidiary in 2002 in response to buyers’ interest. Mogu began manufacturing a range of furniture along the same lines as the Pom Pom, eventually growing the line to include footstools, coffee tables, floor cushions and beanbag-type chairs.

In 2003, Ishida brought the concept to the U.S., first testing Mogu’s furniture products at retailers including Urban Outfitters and Brookstone. The company moved 28,000 pieces per week at Brookstone from February ’03 to October ’03, and Urban Outfitters continues to stock the line. Retail conglomerate The May Department Stores Company will start shipping the basic furniture range to stores including Lord & Taylor and Kaufmann’s this month.

Mogu posted US$45 million in revenues in 2003 and is currently expanding the horizons of its signature material with Mogu People – a group of 18 ‘huggable companions’ designed to appeal to teens. Created by Mogu Entertainment director Geoff Roesch, each doll represents a different emotion or aspiration including patience, love, courage, joy and success. Mogu plans to introduce the dolls (SRP US$39.99) to mid-tier retail this fall. And working with licensing rep Hamp Hampton at The Mercer Group in New York, the company has licensed its People to Moviso (wireless), Logotel (apparel) and Motion Systems (backpacks).

Roesch is also planning a line of gift/novelty characters made from Mogu’s material. Enter the Bad Eggs, four eggs – Scrambled, Hardboiled, Over Easy and Fried – that failed to make grade A. Roesch is working on launching three SKUs – a 3.5-inch ‘squeeze therapy’ plush, a 9-inch shaped pillow and a 31.5-inch beanbag chair – at specialty (think Hot Topic and Spencer’s) this fall.

While Ishida founded Mogu Entertainment to generate intellectual properties for the company to exploit, thereby avoiding the traditional licensee route, Roesch doesn’t rule out the possibility that Mogu’s material could be used for licensed applications. ‘We’re open to it,’ he says.