Design Within Reach survives near-death experience, sells itself to Herman Miller by @ainsleyoc via @FastCoDesign
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Herman Miller Acquires Design Within Reach, Aims To Become A "Lifestyle Brand"

The move comes amid a flurry of furniture industry mergers and acquisitions

Design Within Reach, the retailer known for seducing American homeowners into an (expensive) love affair with European design, has attracted a new admirer. Herman Miller, the furniture manufacturer famous for designs like its iconic Eames chairs, announced last Thursday that it had acquired the once-troubled retailer for $154 million in cash and will be launching a new consumer business unit headed by Design Within Reach’s current leadership.

In announcing the move, Herman Miller CEO Brian Walker took pains to erase the history of pirated designs and management missteps that has haunted Design Within Reach. "We are acquiring a complete consumer-focused infrastructure and an experienced and committed leadership team and workforce that truly values Herman Miller’s design legacy," Walker said in a statement. Back in 2009, Fast Company reported that at least a dozen Design Within Reach products, from lamps to sofas, were "unauthorized reproductions of a foreign design,". A spate of trademark infringement lawsuits ensued.

For Walker, expanding into the home furniture market via Design Within Reach’s footprint and ecommerce platform represents an opportunity to counteract Herman Miller's lackluster office furniture sales, which have mirrored the sluggish growth of the economy overall.

"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," he said.

Photograph by Jonny Valiant

For Design Within Reach, the deal offers a moment of redemption. Founded in 1998, the company grew rapidly in its early years as mid-20th century design came into fashion and buyers snapped up items like Arco floor lamps ($2,995) and round Saarinen dining tables (up to $8,383). When founder Rob Forbes took the company public in 2004, shares were trading at a valuation of $211 million on opening day—a rose-tinted 70 times its 2003 net earnings. But by 2009, overstretched and battling lawsuits amid an economic recession, Design Within Reach collapsed: The company delisted from Nasdaq and sold itself to hedge fund Glenhill Capital Management for $15 million, granting the firm a 92% stake.

Since then, the retailer has steadily brought itself back to life. It closed more than half of its stores, leaving just 38 locations, and shed its reputation as a copycat by settling suits and dropping contentious products. By last year it was profitable once again, with revenues of $218 million.

The acquisition comes amid widespread consolidation within the furniture industry. Earlier this summer Fab, the online retailer still grasping at a business model equal to its outsize ambitions, acquired the furniture company One Nordic. Back in February, the U.S. furniture company Haworth bought a $270 million majority stake in furniture group Poltrona Frau, which owns brands such as Alias and Cappellini. And last fall, Vitra acquired Artek. The mergers provide much-needed economies of scale in a traditionally low-margin industry that is struggling to think and operate globally.

[H/T Dezeen]

[Image: Eames LCW via Flickr / Geraint Morgan]

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  • The real question here is whether or not Herman Miller can actually make a go in the home market. Herman Miller for the Home has been tried again and again with only moderate success. Is DWR too expensive for Herman Miller's core home values. Eames wanted their products to be actually within reach. Right sized pricing is still needed.

  • bakamusuko2112

    This was a hopeful story until I read "a new consumer business unit headed by Design Within Reach’s current leadership. " Good luck with that.

    My experience with DWR has been uniformly horrible. Service has gone beyond indifferent to downright incompetent. I waited months to hear about a part I ordered and finally ended up contacting the manufacturer directly.

    Friends have ordered plate sets from them multiple times only to have them arrive poorly packed and entirely broken. Can't imagine what that does to the profit margin.

    Good luck, Herman Miller. I hope this dog can learn new tricks!

  • Becky Hoven

    I've already been caling it Design Within Theoretical Reach. Does this change to a "premier lifestyle brand" mean that it will become Design Way Out of My Realm of Possibility?

  • I always found their name to be kind of amusing as well. Their explanation is as follows:

    "When we were founded in 1998, consumers weren’t permitted to buy the classics at retail. To find them, you had to go to Europe or work with an intermediary. DWR changed that. We made these innovative works by iconic designers accessible for the first time, and we’ve continued to bring you the best in modern design – past, present and future – ever since. Accessible means that it can be seen and touched (taken for a “test drive,” as we like to say) and that it is in stock."

    So it's "within reach," as in, reach over and pick up your phone and order a $10,000 sofa.

  • Back in the days when I was a recent college graduate with a degree in performance art, I often joked that they should change the store's name to "Design Beyond Reach" as I walked past their storefront to my job at a coffee shop next door.