Hedging Their Bets

As the contract-furniture industry faces an uncertain global market, the big players respond by investing in a sector showing unwavering growth: high-end residential interiors.

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The Design Within Reach tableau illustrates the phenomenon facing the contract-furniture industry, as home and work blur. Featured here: the Bottega Leather Desk, designed by Michele di Fonzo, and the Eames Soft Pad Chair.

All photos courtesy manufacturers

There was a time—not too long ago—when the contract-furniture industry seemed to run on autopilot, decades when all of the major players filled floor upon skyscraper floor with acres of cubicle and panel systems. A time when a steady stream of corporate and government clients assured consistent double-digit growth. That time is past. “Our industry is in a historical moment of change,” says Franco Bianchi, president and CEO of Haworth Inc., the office-furniture giant based in Holland, Michigan. “As recently as twelve years ago, our profession was all about the workstation, especially in North America. Now it’s about reducing real estate, using space efficiently, and adapting to new technologies that allow workers to be increasingly mobile.”

With the domestic market largely saturated, the world economy still in neutral, and the dramatic changes in the work space, furniture companies are moving decisively to refashion themselves as they approach new markets at home and abroad. Much of that refashioning has involved acquisitions of high-end residential and commercial brands. This past February, Haworth announced it had purchased a majority interest in the Poltrona Frau Group, a consortium of venerable Italian manufacturers that includes Capellini, Cassina, and Alias, and owns a huge back catalog of classic designs. That news came just two days after competitor Knoll announced its acquisition of Holly Hunt Enterprises, Inc., an industry leader in luxury home furnishings founded by the eponymous designer.

The Split Dining Table (above) and Shadow Dining Chair (right) are both from Holly Hunt.

Knoll and Haworth are hardly the first wave in an industry-wide shift that is part sea change and part land grab, as major players scurry to expand their footprints. Last year, Herman Miller—which also has a North American distribution agreement with Italian furniture producers Magis and Mattiazzi—purchased New York–based textile designer Maharam. Teknion, which recruited designers Jeffrey Bernett and Nicholas Dodziuk to launch its boutique office design division Teknion Studio in 2013, signed an exclusive North American licensing, distribution, and manufacturing agreement with B&B Italia for its Project Collection. Even smaller players have joined the procession, with Swiss furniture manufacturer Vitra purchasing Finland’s Artek last September. 

“The market for luxury brands has never been stronger,” says Rob Kirkbride, senior editor of Monday Morning Quarterback, a publication that covers the office-furniture industry. “It seems to be a segment of the market that rarely experiences the market fluctuations of lower-end brands. So these acquisitions make sense. The major manufacturers gain a new cachet, and access to an upscale market—to a class of customers they don’t have now.”

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