Herman Miller to Buy Design Within Reach
The $154-million deal is the latest in the saga of high-end acquisitions in the contract furniture industry.
In banner news for the industry, Herman Miller has announced that it has plans to purchase Design Within Reach (DWR) by the end of the month. The office furniture company will pay $154 million to acquire the contemporary furniture retailer and all its 38 outlets in the United States and Canada. (Herman Miller will command an 84% stake in DWR.) With revenues of $185 million in 2013, DWR is Herman Miller’s fastest growing retailer, says CEO John Edelman, who took over the company reins in 2010 and has since brought DWR to industry prominence. Together with president John McPhee, Edelman penned a letter stating how “thrilled” the two were “to be joining the Herman Miller family.”
Herman Miller is also DWR’s largest supplier, Edelman wrote, pointing to the “strategic” symmetry of the partnership. Brian Walker, CEO of Herman Miller, agreed. “The addition of DWR is a transformational step forward in realizing our strategy for diversified growth and establishing Herman Miller as a premier lifestyle brand, helping people create inspiring places where they work, live, heal and learn,” Miller said in a press release. “This combination expands our reach in the higher margin consumer sector.”
This is in keeping with the current industry mood, as we wrote in our May feature about the trend: with a domestic market saturated and international markets shrinking, nearly all the major furniture players have acquired (read: “partnered with”) high-end residential and commercial brands.
Speaking to Metropolis at the time, Edelman commented how all the contract players, including Herman Miller, were “trying to hedge their bets.” (Herman Miller acquired Maharam last year.) He added: “When the systems business goes down, they can focus on their luxury interiors. But I don’t think they can simply swap the two. Buying a luxury item is part of a lifestyle, like buying a piece of art. Going to a dealer to buy a high-end chair is not a luxury experience.”
DWR’s absorption into the Herman Miller family could have its consequences. For example, with over 140 pieces in their line, Knoll Studio is a big DWR supplier. Will this change once the new partnership is in place, especially given that Knoll has been ramping up its e-commerce division in the last year?