Around two years ago I wrote about Herman Miller’s investment into British brand Naughtone. This was by no means the first of it’s kind, but it highlighted the continuing trend of the big boys in the office furniture industry buying into – or buying out – European ‘soft contract’ design brands. The cash is being splashed ladies and gents.
Here are a few notable acquisitions since the beginning of 2014:
- Haworth bought majority stake in Poltrona Frau for $270m
- Knoll (US) acquired Muuto (DK) for $300m
- Hay (DK) sold 33% stake to Herman Miller (US) for $66m
- Steelcase (US) bought Orangebox (UK) for $79m
- Offecct (and others) bought by SBS (now Flokk) for an undisclosed sum.
Office furniture brands are shifting to lifestyle brands. No shit Sherlock, I hear you say. We’re around half way into Herman Miller’s 5 year ‘Shift Strategy’ (that’s S-H-I-F-T) which aims to expand and diversify the brand’s coverage, i.e. not just offices. This strategy will also expand it’s global reach and broaden it’s personality. Miller no longer just want to be seen as a brand purely for professionals, they want to be a household name.
So a few interesting things are happening here. In terms of commercial business, the hunger for these strategic acquisitions is partly fuelled by the shift to agile working, the rise of informal office lounge spaces and coworking style. Desks and office furniture aren’t seen as cool, but breakout spaces are. ‘Loungescapes’ are more profitable too. And these areas are being furnished by fresh faced (or moustachioed) Scandi style creative design brands. The youth want an office like Facebook bruv.
In the cases of Herman Miller and Knoll, by snapping up fresh brands they gain a new breed of customer and a new demographic. Brands like Muuto and Hay are renowned affordable retail design brands who bring with them direct access to end users. This can be used to create public awareness of the parent company. Plus Knoll and Miller’s now extended and manicured tentacles will now pick up commercial office enquiries through Muuto and Hay.
So who’s side are you on?
In addition to this run of acquisitions there’s another rising trend. The rise of the (drum roll and eerie music)…. strategic partnership. In the US, Steelcase partner with: Extremis, Flos, Viccarbe, Blu Dot, West Elm…. and interestingly Microsoft. In most cases these agreements cover the US, Canada and Mexico only. But as of 2019 Steelcase and Viccarbe have rolled this out to DACH countries (Germany Austria Switzerland) too for office-related projects.
Miller, on the other hand, have ‘alliance partnerships’ with Magis, Mattiazzi and Framery amongst others. Sounds like a test drive to me. Expect more of the same in 2019 as the market continues a trend of polarisation.
The acquisition of companies, client lists and data on this scale must make fascinating reading. And it’s a damn sight quicker and easier to buy a dope brand, than build one from scratch. Assuming you’ve got the cash that is. And they have. Essentially they’re buying up kudos in a global game of furniture brand battleships.
Post acquisition, the message to the commercial market is generally ‘don’t panic, everything will stay the same’. Yeah yeah. Maybe for a year or two. By the start of year three distribution will only be via official partners of the parent brand. ‘You don’t sell our desks, you ain’t getting the lounge gear.’ Pops needs a return on his investment.
So is this the gentrification of our industry’s edgy cool bits? Does the underdog-like innocence and charm of young independent design brands somehow diminish as the big boys buy them up? Or is this simply progress in our globalised society? There will always be new emerging brands to take the place of the recently commercialised and acquired. Splinter groups, offspring and trendsetters. Each international furniture fair unveils the stars of the future.
Who will be the next big signing….?
In new design we trust. See you in Stockholm.
furniture strategist 