Q1’s headlines are rife with examples of to-the-trade businesses reckoning with a changing industry—for better and for worse.
Robert Allen Duralee Group’s bankruptcy filing in February sent shock waves through the industry, leaving many wondering what to expect next. The company’s ongoing woes—layoffs and salary cuts, discontent among licensing partners, unpaid bills and unhappy mills—were the results of a March 2017 merger of two undercapitalized brands, and its Chapter 11 filing revealed $12.8 million in outstanding debts to the top 30 of its more than 6,000 unsecured creditors alone. Bankruptcy will also free the company from its duplicative leases at design centers across the country, a line item that had plagued its balance sheet. In a letter to employees, CEO Lee Silberman informed staff that he hopes the move will clear the way for a takeover: “We believe this court-supervised process is the best way to solidify and enhance our financial position ... and look for a company to purchase us so that we have a more stable future.” At press time, the brand was awaiting a buyer; if none emerges by the week of April 22, the company will be liquidated.
Other brands have weathered tumult with slightly better luck—or at least slightly more grace. Dessin Fournir announced that it would shutter its Chicago and New York showrooms amid headlines-making foreclosure proceedings in the company’s home state, Kansas. Founder and CEO Chuck Comeau told BOH that he expects to save $150,000 a month in overhead costs by exiting the two markets. (The company will keep its Los
Angeles showroom and Kansas headquarters and develop a road rep network. It is also represented in eight multi-line showrooms across the country.) The closures may be triggered by financial struggles, but reflect Comeau’s questions about how to move forward in today’s disrupted landscape: “People used to go to design centers because it was the only way to see new product, but now all of that is at your fingertips. What is the point of this high-priced real estate if there are other ways to accomplish the same thing? Every day that we stay stuck in this broken business model is one less day we have to start innovating.”
It’s not all bad news for trade businesses. Several pioneering brands are finding ways to evolve and adapt before crisis strikes. One route is to opt online: With high hopes of expanding its reach and attracting new customers, Scalamandré launched a new collaboration with furniture manufacturer The Inside, which brings a digitally-printed version of the fabric house’s iconic patterns (and one never-before-seen archival design) to the furniture brand’s quick-ship silhouettes. Fabricut, meanwhile, doubled down on its focus on designer customers with a new digital platform that showcases 11,000-plus fabric options and offers easy online ordering. “Fabricut was built on the belief that we have the power to solve our customers’ core challenges,” said Jodi Finer, creative director at Fabricut brand S. Harris. “Innovation is about creating those solutions.”
Top stories from the BOH news desk.
⟶ Chairish, Inc. acquired Dering Hall, solidifying its position as one of the largest platforms for high-end home furnishings in the United States, with nearly half a million items across the Chairish, DECASO and Dering Hall sites.
⟶ Annie Selke ended her partnerships with Houzz, Neiman Marcus and other e-commerce retailers in February, scaling back her online business in response to feedback that promotions were under- cutting her designer and wholesaler clients.
⟶ Grace Bonney announced that she will shutter Design*Sponge in August 2019. In her letter to readers, Bonney cited the pressures facing indie publishers, such as sacrificing the brand’s mission, in exchange for keeping the beloved, 15-year-old digital outlet afloat.
⟶ Sandow will take over operation of NYCxDesign, the city’s annual celebration of local makers and artisans, starting in 2020.
⟶ Sandow also acquired Contract Consulting Group, a Chicago-based market research and strategy company focused on contract interiors. The terms of the deal will rebrand CCG as ThinkLab, which will operate under the purview of Interior Design magazine.
⟶ Online design platform Laurel & Wolf has shut down its website and disconnected its phones. The brand, which once raked in over $20 million in VC funding from the likes of bluechip firm Benchmark, has gone dark. As one Facebook commenter posted, “I guess our profession can’t be put in a box.”
Comings & Goings: Big names making major moves
Dan Calkins | CEO and Chairman, Benjamin Moore After working at the Montvale, New Jersey–based paint company for more than three decades—from eight cities and in several departments—Calkins was named CEO and chairman of Benjamin Moore in January.
Mike Jolly | President, Baker Furniture On the heels of fall’s High Point Market, Baker transformed its leadership team. Jolly, who joined the company in September after roles at Bernhardt and Thomasville, assumed the top spot in December.
Day Kornbluth | President, Ralph Lauren Home The former chief digital officer at RH and a One Kings Lane alum, Kornbluth replaced William Li, who along with longtime creative director Alberto Paredes, left the company in January.
Cheryl Sterling | CEO, Donghia A longtime fashion exec turned consultant, Sterling replaced Andrea Rubelli, who had stepped in after the departure of Jonathan Witmer in May 2018. Rubelli will resume his role as non-executive director of the board.