

More architecture firms reported a decline in billings in February, indicating an extension of a recent downturn in design activity according to a new report released today from The American Institute of Architects (AIA).
The score for February fell slightly to 48.0 (any score below 50 indicates a decline in firm billings). However, inquiries into new projects continued to improve, as did the value of new design contracts. Both indicators suggest that design work is expected to improve in the coming months.'
“The combination of an unsettled economy and high interest rates is causing investors and property owners to take a closer look at their plans for construction projects,” said AIA Chief Economist, Kermit Baker, Hon. AIA, PhD. “While this is producing delays for some projects under design, architecture firms are reporting that prospects for future project work remain generally positive.”
Key ABI highlights for February include:
Regional averages: West (50.4); Midwest (48.8); Northeast (48.4); South (47.3)Many were surprised to read about the HNI acquisition of Kimball International, creating the 2nd largest commercial furniture corporation. This transaction parallels the 2021 acquisition of Knoll by Herman Miller, creating the newly named MillerKnoll as the largest commercial furniture enterprise. So what’s going on?
The global furniture industry is changing rapidly and the once distinct sectors of office and residential and hospitality and education and healthcare furniture are now blurring into Omni-channel distribution pathways. The sofa for the home can easily be sold into an office environment or to the luxury hotel. Office chairs are now a staple in every hotel room. And Covid proved you need that office chair at home.
But most office furniture businesses don’t sell to homes. They sell via aligned dealers that specialize in large “contract” sales to large corporations.
M&A is a tool to reshape distribution channels and broaden product and customer profiles, as well as cut overheads by merging or consolidating SG&A.
MillerKnoll is quickly rationalizing overheads while ramping up its online presence and its “resi-Mercial” profile. HNI will now be a major player in hospitality, educational and healthcare furnishings with its acquisition of Kimball.
We expect to see more M&A activity as a result of these 2 powerhouse transactions, particularly in the following areas:
E-commerce: while turbulent the past year, e-commerce sales are growing 2-3x faster than traditional retail and consumers will increasingly turn to online purchasing of furniture. Brands will be an important part of this his purchasing decision. Office furniture will increasingly be sold online.
Healthcare: with the aging baby boomers, healthcare expenditures will rise and furniture will be needed in the doctors’ offices and assisted living facilities. PE is wisely eyeballing this sector.
Education: the US government is spending plenty of money on infrastructure including schools, therefore new facilities will require furniture. Also, the classrooms are changing to a more collaborative setting which requires an overhaul of the types of furnishings required.
Infrastructure/Innovation: With the US spending billions on infrastructure, the furnishings’ needs will expand as well. Businesses and agencies will focus on new types of industrial fixtures and workstations to improve efficiencies. Innovation labs are popping up around the country as incubators of the next generation of good ideas. Smart furnishings companies will focus on these sectors.
We are already in the midst of an M&A boom. And more is coming. Get ready.

RH is Eating The Italian Brands for Lunch
By Stephen Viscusi
Dear Stephen,
I work for a luxury furniture retailer. We sell primarily Italian brands. We’re the equivalent of DWR, which sells mostly iconic American brands. During the pandemic, business was gangbusters. Everybody was staying home and wanted a nicer indoor and outdoor space. Furniture was flying off the shelf. We’re a product specified mainly by designers, but it’s not uncommon for customers to pull up to our Miami showroom in the Design District with their Rolls Royce and buy a 70K sofa for their condo in South Beach.
Now our sales have slowed, and I think I know why. Europe controls all our marketing and sales efforts, and they’re clueless about how the American consumer, or an architect or designer, in The United States, does business.
We make one of the finest products in the world – everything is hand stitched in Italy. No different than a beautiful Eames made by #MillerKnoll, sold at #DesignWithinReach. But our market share is suddenly dwindling, and I think it’s because the American consumer has fallen in love with #RH.
Just look at the RH stock price! Meanwhile, we’re a privately owned company - so we don’t have any shareholders to answer to. But our leadership is not in The United States, and RH is opening its first gallery in the continent in England in 2023, so it’s still foreign to them.
Our price point is not deterring customers because RH isn’t cheap either. In my market, Miami, we’re losing business to the beautiful RH store in West Palm Beach. They have a great restaurant, whereas I’m barely able to offer someone a cup of coffee. People love going to RH because they feel like they’re at a party; they can sit down and have a meal, and people-watch. RH is an entire retail experience! And one thing about America is that we are a culture driven by consumption.
I’m passionate about furniture and love the products my company makes, but my sales team and leadership are a revolving door. Many friends have left to go to RH and are making 30% more in base than us, with better benefits, yet my company refuses to pay competitively. Even the fancy pants interior designers of Palm Beach are upset that their wealthy clients are pressuring them to change their specifications to RH. Their genius marketing mimics our luxury brand while it mocks our management. I’m thinking of jumping ship – what would you do?
Best,
Fancy, Frustrated, in Furniture
Dear Fancy,
I’ve said it before, and I’ll repeat it, whether you’re at DesignWithinReach, B&B Italia, Luminaire, Holly Hunt, or any beautifully crafted furniture brand – RH is eating your lunch!
It’s exactly as you described. The leadership at RH understands The US consumer. They even appreciate The US designer because their extensive contract division calls on architects and designers and offers them additional discounts.
Would I have any of it in my house? I don’t think so. I love my B&B Italia sofa. I love my Cassina Cab chairs. As well as my Eames and Womb chairs. Oh - and I love my Christian Liaigre bed! Yes, I know I’m a furniture snob. You can’t beat the luxury of any European or iconic American brand!
That’s why it kills me that these luxury brands are slowing up. Everyone was happy during the pandemic because everyone was selling furniture then. It was practically selling itself as you said. Now that the pandemic has ended, they’re seeing RH’s marketing might.
This should tell you something if not everything. Warren Buffet, of Berkshire Hathaway fame, is a big investor in RH. Gary Friedman, the CEO of RH, is a marketing genius, personally worth over a billion dollars.
RH is selling a lifestyle – and they’ve managed to market the hell out of that lifestyle. It’s great to have European investment in quality design. But it’s time to have more US marketing influence in leadership within European companies concerning American customers.
Like you said, RH is starting its expansion into Europe in 2023. European manufacturers better watch out, or they won’t know what hit them very soon!
To answer your question – if you’re thinking about it, I won’t discourage you from going to work at RH. But it would be best if you understood RH is a primarily retail environment, as opposed to the other showrooms you mentioned, which are a trade and retail environment. It’s more like a classic retail position; there’s nothing wrong with that if you think it’s a better option. It means more time on your feet and a more physically demanding sales job.
By the way, office furniture manufacturers, beware; you should be worried if RH decides to enter the contract furniture business.
Signed,
Stephen

Milan design week is the biggest annual design event in the world and takes place from 17 to 23 April 2023. The week includes the furniture fair Salone del Mobile, which takes place at the Fiera Milano exhibition centre and is the largest event to take place during the week. The selection of fringe events collectively named Fuorisalone also takes place across the city.
NeoCon 2023 at THE MART will feature three keynote speakers: Amy Webb, Michael Murphy, and Michael Ford. They will explore how to create a more sustainable and equitable future by drawing inspiration from diverse backgrounds and experiences.
On Monday, Amy Webb, a world-renowned futurist and tech leader, will discuss emerging trends and technologies that will revolutionize industries and reshape our lives. Michael Murphy, co-founder of MASS Design Group, will take the stage on Tuesday to explore how our environment shapes our actions and advocate for architects to consider the ethical nature of their design decisions. On Wednesday, Michael Ford and Lupe Fiasco will discuss how Hip Hop culture can stimulate innovation and inspire how we design.
Programming registration for keynotes, featured presentations, CEU sessions, and workshops will open on April 3. Expo registration is currently open and is free for all attendees.




