Last fall, Interior Define’s customers took to social media en masse to voice their anger over missing furniture and erratic communication. Behind the scenes, the Chicago-based furniture brand was struggling. Among other challenges, an ambitious retail expansion plan had left it short on cash at a time when shipping companies and manufacturers worldwide were raising prices. By the end of summer, Interior Define was unable to pay for the release of millions of dollars of product already delivered to ports in the U.S.

On review sites, through the grapevine and in our own reporting, news of the company’s troubles continued to spill out, leaving many in the industry to wonder: What will happen to Interior Define?

Now, the answer is becoming clear. Interior Define has entered into a legal process akin to bankruptcy, an “assignment for the benefit of creditors” or “ABC.” In simple terms, Interior Define as a legal entity—along with its debts—will be dissolved (the company has since posted an explanation of the process on its Instagram account). But prior to entering into the ABC, Interior Define found a buyer to purchase its intellectual property and take over stewardship of its brand: e-design platform Havenly.

According to sources familiar with the situation, the deal was pulled together over the past month, following a period during which Interior Define desperately looked for a lifeline from investors and potential acquirers as it edged dangerously close to Chapter 7 bankruptcy.

What does this news mean for the company’s customers waiting for their furniture? There’s reason for optimism. Though the ABC process technically eliminates any obligation to fulfill outstanding orders, according to a source with knowledge of the deal, Havenly is negotiating an agreement with Interior Define’s logistics vendors to pay for the release of the “vast majority” of product that has been held up in transit. For customers whose merchandise has been sitting in a shipping container at port for months, there’s hope.

At some point over the past year, however, Interior Define was also unable to pay its manufacturing vendors. Customers whose orders have not yet made it to the factory floor will be in a more uncertain position—it’s less likely that they will see their sofas delivered.

For Interior Define as a company, the picture is also coming into focus. Though the ABC process will technically dissolve the brand as a legal entity, Havenly will “relaunch” Interior Define as a near-identical company. Going forward, Havenly will own the brand, employ its staff and be responsible for all future orders.

Behind the scenes, Interior Define has changed a great deal. CEO Antonio Nieves has stepped down, and several members of the executive team have left in recent months, including chief business officer Chris Travers and chief experience officer Catherine Colwell. At its peak, the brand fielded between 200 and 300 employees. After several rounds of layoffs throughout the latter half of 2022, Interior Define is now down to a staff of roughly 115.

According to a source with knowledge of the meeting, the most recent cuts occurred last week in the days between Christmas and New Year’s Eve in a virtual town hall where Nieves tearfully informed staff of the layoffs. The news capped off what had been a bleak period for morale at the once-surging brand.

Much of 2022 was defined by a darkly anxious mood within the company, as management told rank-and-file staff to stick to vague explanations for the company’s troubles even as delays stretched on and customers grew increasingly irate. A former employee who asked to remain anonymous told BOH that new funding was hyped but never materialized, and uncertainty reigned.

The fate of the brand’s retail fleet is unclear. At present, Interior Define’s site lists 20 brick-and-mortar locations, though many stores have been closed in recent months and angry customers have posted pictures to social media showing eviction notices of several locations, suggesting that Interior Define was not paying rent on the properties. A source with knowledge of the ABC process suggested that at least some locations will reopen.

For Havenly, the deal is an intriguing move. Co-founded in 2013 by current CEO Lee Mayer, the brand has outlasted well-funded competitors like Modsy, Homepolish, Laurel & Wolf and Decorist to remain the only large-scale e-design platform standing. Havenly’s longevity, Mayer has suggested in interviews, is due to a focus on good unit economics and responsible cash flow as opposed to the growth-at-any-cost approach taken by many peers.

Despite Havenly’s comparatively conservative approach, this is not the brand’s first acquisition: Earlier in 2022, Mayer oversaw the purchase of buzzy customization-focused DTC furniture startup The Inside. Though both buys are ostensibly similar, they vary wildly in scope: Interior Define is a far larger, more complex business than The Inside, and it comes with a much bigger set of problems.

Mayer’s task will be to do right by wronged customers, turn negative sentiment around and re-energize a reduced staff that has been through a rough period. If she can do it, the rewards are considerable. Before its recent woes, Interior Define was a generally admired brand on an upward trajectory. The prospect of rekindling that magic—not to mention the potential synergies with Havenly’s e-design business—have clearly made this buyout a bet worth taking.

Homepage image: A living room vignette from the Interior Define Studio | Courtesy of Interior Define