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West Elm Breaks Into The Boutique Hotel Business

The Brooklyn-based furniture brand is expanding into hospitality with a fleet of hotels scheduled to open in 2018.

West Elm Breaks Into The Boutique Hotel Business

This week, West Elm announced a new arm of its business: boutique hotels. In 2018, the the furniture and lifestyle brand will open the first of five planned outposts in Detroit, Michigan; Minneapolis, Minnesota; Savannah, Georgia; Charlotte, North Carolina; and Indianapolis, Indiana. The initiative is a joint venture with DDK, a hospitality management and development company, and represents the first truly shoppable hotel brand.

West Elm has seen 26 consecutive quarters of double-digit growth and operates about 100 stores across the country. To keep the momentum going, West Elm president Jim Brett wants to diversify. "Where many retail brands have put the nail in their coffins is by opening too many stores," Brett told the Wall Street Journal.

Though not technically a store, the hotel is a savvy retail move that gives guests the opportunity to fall in love with furniture and try before they buy. Some of the furniture and decor in each room is shoppable via an app people can download at check-in and on West Elm's website. It's a complete brand experience without the pressure of a hovering sales floor associate.

West Elm isn't the first to experiment with this model: Aloft Hotels partnered with Design Within Reach to make their in-room furnishings shoppable. On the more bespoke end of the spectrum, the Fogo Island Inn, in Newfoundland, commissioned artisan-made goods for its rooms and around 70 items are available for sale. Restoration Hardware also has a hotel in the works. But West Elm Hotels represents one of the biggest brand pushes yet. As the company looks to grow from a $1 billion brand to a $2 billion behemoth, finding fresh ways to engage with customers is a core challenge.

"We are evolving from home furnishings to a purpose-driven brand, and recognize the opportunities to harness the power of design and human connection to create rich and relevant experiences for our customers," a West Elm spokesperson told Co.Design via email. "We’re really thinking about this in different spaces, which creates a unique opportunity for our brand to grow beyond just adding new retail stores. As we are living a more braided life at home, work, and away, our entry into Hotels is a natural next evolution for West Elm . . . We expect that West Elm Hotels will broaden our brand reach, and we will measure the success based on our ability to create exceptional customer experiences and loyalty to West Elm."

The rooms—which are expected to go for $175 to $400 or more per night—will feature West Elm's furniture; however, don't expect the company to cut vignettes straight from the pages of its catalog and paste them into every location. When Brett became West Elm's president in 2010, his strategy to turn around the company involved bringing a handmade and personal sensibility to its product line. He's extending that to the hotels. The company plans to furnish each hotel with products and artwork from their respective communities—an extension of the brand's West Elm Local program—and, similarly, base its restaurant menus off of regional cuisine.

The venture will likely boost West Elm's contract furniture business—furniture designed for high-traffic environments like offices, hotels, and airports that is specified by interior design professionals—which the brand has also been building with the launch of an office furniture line. "We achieve scale across the brand when products originally designed for one part of our business actually work for other parts," the West Elm spokesperson said. Additionally, since the furniture arm of the company will feed into the hotel arm, the company is able to outfit its rooms for 40% less than a comparable boutique hotel, according to the WSJ. (It's estimated that only 12% to 16% of a hotel's total development cost is related to furniture and fixtures, though.)

West Elm faces stiff competition. Brands like Virgin, and even stalwarts like Hyatt and Marriott are boutiquifying their portfolio to attract younger consumers. On the local designer front, the Ace has long tapped into regional influences to ensure each of its hotels has its own fingerprint.

In choosing scrappier debut markets like Detroit and Indianapolis, West Elm may have an edge. These places are fiercely proud of their maker communities. Plus, a mass brand like West Elm could potentially gain more traction in small cities compared with larger, more cosmopolitan centers like New York and Los Angeles, which are saturated with luxury accommodations.

In any case, West Elm hotels will surely best Motel 6—anywhere on the map.

[Photos: courtesy West Elm]

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