news digest | Jul 9, 2024 |
Man Wah issues a shipping surcharge, falling occupancy poses a $30 million threat to the D&D Building, and more

This week in design, there’s a new reason to bring greenery indoors: a house plant that purifies indoor air, courtesy of a bioengineered microbiome. Stay in the know with our weekly roundup of headlines, launches, events, recommended reading and more.

Business News
Amid growing financial pressures and a looming foreclosure proceeding, the Decoration & Design Building in New York stands to lose more than $30 million in the face of falling occupancy, Crain’s New York Business reports. The building has lost a third of its 130 tenants since 2015 and has seen net cash flow fall by a similar fraction. To make matters worse, one-fifth of its current tenants (including its largest, Stark Carpet) have leases that are month-to-month or are set to expire in 2024. Meanwhile, billionaire landlord Charles Cohen has also fallen behind on the building’s mortgage since May 2023, which means lenders may have to write off $34 million of the $156 million loan balance, according to a new report from bond rating firm KBRA. To make matters worse, costs continue to climb as the building’s ground rent rose by nearly 50 percent last year and is now scheduled to rise at an average annual rate of nearly 4 percent. In emails to Business of Home and D&D tenants, representatives for the building disputed several elements of the Crain’s coverage, including that the building has lost a third of its tenants and that a portion of current leases are month-to-month. They also claim that the building has continued to secure a number of new tenants over the last six months in addition to renewing existing leases with multiyear agreements.

HBC, the parent company of Saks Fifth Avenue, has agreed to acquire Neiman Marcus in a $2.65 billion deal that will merge the two department store giants, The New York Times reports. Along with financing from existing investors and affiliates of investment firm Apollo Global Management, HBC also received capital to fund the deal from Amazon, which will take a minority stake in the newly combined companies. The purchase marks the start of a group called Saks Global, which will operate 75 stores and 100 off-price outlets under the Saks Fifth Avenue, Saks Off 5th, Neiman Marcus and Bergdorf Goodman brand names—a portfolio worth $7 billion—with current Saks chief executive Marc Metrick at the helm. According to the companies, the coming era will include investments in technology such as AI, as well as in new and existing brands.

A federal judge in Texas has issued a preliminary ruling that partially blocks the Federal Trade Commission’s ban on noncompete agreements, NPR reports. The decision came from Judge Ada Brown of the U.S. District Court for the Northern District of Texas, who granted an injunction requested by several plaintiffs—including tax firm Ryan LLC and business organizations such as the U.S. Chamber of Commerce—preventing the ban from being enforced against them pending a final ruling. Brown doesn’t expect to issue a final decision until August 30—five days before the rule is set to go into effect—but stated that the plaintiffs were “likely to succeed” in their challenge, based on her belief that the FTC lacked the “substantive rule-making authority” in the matter. In response, FTC spokesperson Douglas Farrar has reaffirmed the agency’s authority to issue the ban, which the group says could lead to wage increases of nearly $300 billion per year, along with the creation of 8,500 new businesses each year.

In recent weeks, shipping costs rose to heights not seen since the early days of the pandemic, largely due to escalating attacks on vessels in the Red Sea from Houthi rebels in Yemen and labor disruptions at other global ports. Last week, that trend continued, with the cost of shipping a 40-foot container from Shanghai to Los Angeles up $799 to $7,472 (a 12 percent increase from the week before); and from Shanghai to New York, a price hike of $1,331 to $9,158 (a 17 percent increase), Furniture Today reports. Meanwhile, the average cost per 40-foot container reached $5,868, a 10 percent increase from the week prior, and nearly three times as high as the average cost this time last year. Major furniture importers Ashley and Flexsteel began implementing freight surcharges in June in response to the growing costs, while upholstery manufacturer Man Wah USA joined them this week with its own 3 percent increase, Home News Now reports.

French high-end furniture maker Roche Bobois has acquired a majority interest in its franchisee Shanghai Rock Castle Furniture, which operates two stores in Shanghai and one in Beijing, Women’s Wear Daily reports. Through the deal, the company will take on a 51 percent stake in Shanghai Rock Castle Furniture, with plans to gradually increase its ownership to 100 percent. The move will allow the luxury brand to accelerate its growth in the region, which has proved a lucrative market: According to a release, Shanghai Rock Castle Furniture’s EBITDA (earnings before interest, taxes, depreciation and amortization) exceeds Roche Bobois’s in the U.S. and Canada region.

Launches & Collaborations
The organizers behind Design Shanghai, Asia’s largest international design fair, are capitalizing on growing interest from buyers in the region with the debut of a new fair dedicated to limited-edition works of art and design pieces, Women’s Wear Daily reports. The inaugural Design Shanghai Collectible will take place at the Shanghai Exhibition Center from October 31 to November 2, with programming such as a showcase dedicated to contemporary design and craftsmanship by Adrian Choi Design Studio of Jingdezhen (a UNESCO Creative City known often called China’s “Porcelain Capital”) and a presentation by Shanghai-based gallery Sailing Space on the professional approach to engaging with the contemporary art sector.

West Elm tapped chef and restaurateur Marcus Samuelsson for a 32-piece capsule collection, with items ranging from furniture, lighting and decor to tabletop accessories. The products draw inspiration from Samuelsson’s Ethiopian heritage, his Swedish upbringing and his current home neighborhood of Harlem, with pieces ranging from a Scandinavian-style dining table and bistro chairs to a color-block bar cabinet in lapis and red.

Recommended Reading
Souvenirs sourced from world travels don’t have to be relegated to the realm of refrigerator magnets and cheap airport trinkets—if chosen right, they can become a storied piece of your home’s design. For The Washington Post, Jennifer Barger lays out a guide to taking home treasures that become part of your home’s decor, including tips on smart sourcing, getting pieces home safely, and how to use and place them once the long journey is over.

The kitchen appliance industry has fully embraced innovation in recent years, rolling out high-tech refrigerators, ovens and dishwashers equipped with everything from internet access to food temperature monitors. The one downside: Their lifespan is shorter than ever. The Washington Post’s Rachel Kurzius and Jaclyn Peiser explore how the sector’s rapid tech adoption has made the latest appliance models more vulnerable to breaking down, while stripped-down styles from eras past remain standing decades later.

Call for Entries
High Point Market Authority is looking for influential interior designers and industry tastemakers to participate in its 2025 Style Spotters program. Five experts will be selected to identify the top furnishings trends at High Point Market’s upcoming fall and spring trade shows and broadcast their findings on social media. To apply to the program before the July 26 deadline, click here.

In Memoriam
David A. Morton, a former associate publisher at Rizzoli International Publications, passed away late last month at the age of 89. Morton’s time at Rizzoli kicked off in 1987, and led to the development of a program of publications on leading architects ranging from Frank Gehry and Zaha Hadid to I.M. Pei and Peter Eisenman, among others. In the years to follow, Morton also championed books on significant historical figures in the field—an effort that led to the publication of the top-selling title, Frank Lloyd Wright: The Houses. Among his industry accolades, Morton was honored with the Henry Hope Reed Award from the Richard H. Driehaus Prize for highlighting classical architecture, and also earned honors from the Sir John Soane’s Museum Foundation in New York. “David helped make Rizzoli the preeminent publisher of architecture books,” says Charles Miers, publisher of Rizzoli. “His intellectual curiosity, far-reaching vision, high standards, and the seeming ease with which he produced so many books are unmatched.”

Update: July 12, 2024
This article has been updated to include information from the D&D Building’s management that denies certain aspects of the Crain’s New York Business article about the building’s occupancy and leases.

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