Will Big Office Furniture Companies Survive COVID-19?

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A Herman Miller office set-up

If you took a walk through the average office space in the recent past, you could hardly make it from the front desk to the conference room without seeing a fleet of Herman Miller Aeron or Steelcase Leap chairs. These brands represent the gold standard in corporate ergonomics and design, and are seen everywhere from Fortune 500 boardrooms to open floor plan startups looking to make a good first impression.

Needless to say, the past six months haven’t been too kind to office furniture suppliers reliant on corporate customers. While the realities of COVID-19 turned home office furniture into a growth industry almost overnight, some of the biggest names in traditional office furniture have seen sales plummet at a time when Gallup survey data noted that a majority of Americans preferred the ability to work remotely as much as possible.

For both Steelcase and Herman Miller, according to a new Reuters article, that shift translated to double-digit sales declines for the quarter ending in May, with Steelcase’s $483 million in revenue representing the company’s worst sales quarter since it went public in 1998. Coupled with longer-term pessimism about the future of work in a post-pandemic world, those losses translated to both companies losing more than half of their share value since the start of the pandemic.

The issue, according to industry plates, is that these manufacturers have had a hard time shifting their sales methods and supply chains to meet the new way of working. “A tsunami hit this industry with this pandemic,” Ron Weiner, CEO of adjustable desk maker iMovR, told Reuters. “The big companies simply weren’t structured to serve people from home.”

Part of the challenge arises from the disparate wants and needs for a home office versus a corporate client. At a time of stress and economic uncertainty, dropping $1,000 for an Aeron chair or other office furniture that can often require professional installation is not necessarily feasible for individual employees. Furthermore, current product lines designed on the assumption of business as usual in 2020 might contain features and functionality that’s extraneous or even inconvenient for those working at home.

There’s also the same kind of supply-chain challenges that have plagued other industries and manufacturing sectors this year. Office furniture companies often use a supply chain reliant on outsourced component production, with multiple manufacturers creating the different inputs that add up to a desk or chair. That’s great when working with a company placing large orders, but perhaps not as efficient when it comes to selling one item at a time.

Reuters notes that office furniture companies are adjusting on the fly and laying the groundwork for a future where the workplace will look much different. Herman Miller set up a way for Google employees to spend their $1,000 home office stipend through the company, and its designers are busy creating workspace concepts for a future driven by smaller, decentralized satellite offices.

How commercial office spaces rebound after the pandemic is quite literally a multibillion-dollar question at the moment. So it perhaps will be no surprise if the what, where, and how of office furniture will start to look a little bit different too.

Via ADPro

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