Sedus Stoll AG and Watson Furniture Group Agree on Strategic Cooperation / HAT Collective Expands to UK Market / Room & Board's Commercial Arm Announces Rebrand as Room & Board for Business / HNI Corporation Reports Earnings for First Quarter Fiscal Year 2023 / DIRTT Reports First Quarter 2023 Financial Results / MillerKnoll Inks Expansion at 251 Park Avenue South / This is How Bad Tech Office Leasing Has Become / Law Firm Leasing Sets First-Quarter Record In 2023 / Office furniture giant Flokk opens showroom in heart of Manchester / AI Will Mean Fewer IBM Staff To Fill Office Space (For Now) / Employees care more about work culture than flexible working / 4 Trends Driving the Workplace Forward / and much more…


The Working Space
Monday, May 15, 2023

Industry News

Sedus Stoll AG and Watson Furniture Group Agree on Strategic Cooperation
Sedus Stoll AG and Watson Furniture Group have agreed on a strategic cooperation, formalized at the Orgatec 2022 trade fair. The partnership will allow Sedus Stoll AG to expand its international network and offer customers a wider range of complementary products, while Watson will benefit from Sedus Stoll AG's expertise in technology and manufacturing. Both companies share values and a commitment to sustainability and design integrity.

Room & Board's Commercial Arm Announces Rebrand as Room & Board for Business
Room & Board Business Interiors has rebranded as Room & Board for Business, offering tailored services and expanded benefits to trade, contract professionals, and businesses. The program includes volume discounts, furniture spec services, tax exemptions, complimentary warehousing, $99 white-glove delivery, and 5 or 10 year product warranties. The revamped program also offers a 10% discount for businesses spending $50,000 or more within a 3-year period. The company is dedicated to sustainability and aims to have 100% sustainably sourced wood, 100% recyclable packaging, and divert 70% of landfill waste by 2025.

HNI Corporation reported Q1 2023 sales of $479.1 million and net income of $1.6 million. GAAP net income per diluted share was $0.04, compared to $0.33 in the prior year, while non-GAAP net income per diluted share was $0.13, compared to $0.33 in the prior year.

HNI Corporation has a market capitalization of $1.1 billion and is expected to have an earnings growth of 8.00% over the next five years. The company's revenue growth in the last year was 8.12%, and its stock is trading at a discount compared to its book value.

Q1 Highlights

  • Profit growth actions in Workplace Furnishings delivering results.

  • Demand in Workplace Furnishings supports long-term optimism, although near-term conditions remain dynamic.
  • Update on Kimball International deal.
  • Residential Building Products prepared for lower demand.


Q1 Summary Comments
  • Consolidated net sales decreased 16.3 percent from the prior-year quarter to $479.1 million.
  • Gross profit margin expanded 200 basis points compared to the prior-year quarter.
  • Selling and administrative expenses as a percent of sales increased 420 basis points compared to the prior-year quarter.
  • Non-GAAP net income per diluted share was $0.13 compared to $0.33 in the prior-year quarter.
  • Workplace Furnishings net sales decreased 15.1 percent from the prior-year quarter to $299.6 million.
  • Residential Building Products net sales decreased 18.2 percent from the prior-year quarter to $179.4 million.

Fiscal Year 2023 Outlook

  • The Corporation expects weaker macroeconomic conditions to impact Workplace Furnishings demand and profitability on a year-over-year basis through the second quarter.
  • In Residential Building Products, the Corporation expects a weak housing market to result in year-over-year revenue and profit pressure persisting through the remainder of 2023.
  • The Corporation continues to expect earnings seasonality will be more in-line with pre-pandemic trends.
  • The Corporation expects second quarter 2023 operating income to exceed first quarter 2023 levels.

DIRTT Environmental Solutions reported financial results for Q1 2023, with revenue decreasing by 4% to $36.7 million, but with gross profit margin improving by 1,507 bps and net loss improving by $11.6 million, but still posted a loss of $11.4 million. Adjusted EBITDA improved by $8.4 million, and the company has a twelve-month forward sales pipeline of $252 million as of April 1, 2023. DIRTT also entered into an agreement with Armstrong World Industries Inc. related to co-ownership of certain intellectual property rights in a portion of the ICE software.

DIRTT Announces Expansion of Partnership with Armstrong World Industries
DIRTT has entered into a joint arrangement with Armstrong World Industries for co-ownership of certain intellectual property interest in DIRTT’s ICE software and enhanced commercial partnership opportunities for consideration of approximately $11 million (USD). The joint arrangement will enable further investment in the ICE software platform for the shared interests of both DIRTT and AWI, as well as the potential for additional collaborative activities.
According to a report by Savills, leasing for the tech category represented only 8.7% of demand in Q1 2022, leaving a huge hole in the office market. Landlords are using concessions to entice new tenants, but over time these take their toll and concern other investment participants. However, Savills offers hope that tenants may view the time as opportune to put together deals with favorable terms, and larger tech firms are beginning to opt for a 50%-hybrid model with dedicated and assigned seating.
Norwegian furniture company Flokk has opened a new showroom in Manchester, showcasing its portfolio of brands including Offecct, HÅG, Giroflex, RH, Profim and Connection. The 4,000 sq ft space was designed in collaboration with Resonate Interiors and features several spaces for presentations and meetings, including a CPD area and theatre space. The showroom will be used by the Flokk North team to host guests for meetings, events and tours. Meanwhile, communications specialist Magenta Associates has reported significant growth in 2022/23 and 2021/22, along with a series of new architecture, design and construction contract wins, and several of its existing clients confirming that they will invest in new service areas of the business.
Steelcase's (NYSE:SCS) stock has increased by 4.3% over the past three months, but the company's financials don't look promising. Its ROE of 4.3% is significantly lower than the industry average of 14%, and its high payout ratio suggests that the company is depleting its resources to keep up its dividend payments. Investors should be cautious before making any decisions on Steelcase.
MillerKnoll, a global office furniture design firm, has expanded its occupancy at 251 Park Avenue South in Manhattan's Gramercy neighborhood by leasing an additional 15,331 square feet on the sixth and seventh floors, bringing its total occupancy in the building to over 60,000 square feet. The Feil Organization, which acquired the building in 2015, represented itself in the transaction, while Cushman & Wakefield's Justin Royce represented MillerKnoll.

HAT Collective Expands to UK Market
HAT Collective, a workplace solutions provider, is expanding to the UK market through a partnership with dealer obo. HAT Collective's suite of workstations, monitor arms, and wall-mount products will be available to UK customers. The move allows HAT Collective to serve a growing international market and leverage its European headquarters in Denmark. The company is dedicating operational and personnel resources to the partnership, including the appointment of Pat McDonald as VP of Strategic Partnerships and International Sales. Obo will carry HAT Collective's Danish-designed and manufactured workstations and wall-mount solutions, including the Elle, Ellehaven, and M Series height-adjustable tables and M Wall Mount.
New financial data and commentary from the nation’s largest hoteliers over the last two weeks show the market’s business-related demand segments this year have reached or closely approached 2019 levels. Hilton, Marriott, and Host Hotels & Resorts have all reported higher-than-expected earnings to begin 2023 and increased their projections for the remainder of the year. Business transient demand still hasn’t fully recovered to pre-Covid-19 levels, but it has seen year-over-year growth, especially from small and midsized businesses. The hotel companies did warn analysts there is still risk that a worsening economy could depress demand in the coming year.
According to a report by Cushman & Wakefield, law firms leased a record-breaking 3.6 million square feet of space in the first quarter of 2023, with 2.2 million of that in the top 10 U.S. markets. This comes after a strong 2022 that saw a record 14.6 million square feet taken nationwide. However, legal tenants who renewed or changed locations within the same market took an average of 13% less space than previously. New York dominated new leases in 2022, while Chicago and Boston saw high percentages of new leases as well. Sunbelt markets like Houston and Dallas-Fort Worth saw upticks in law leasing totals in 2022.

NeoCon and Fulton Market

NeoCon 2023 (June 12-14) has a diverse lineup of events, exhibits, and installations curated by NeoCon, their partners, and exhibitors. From awards shows to interactive exhibits, the event offers ample opportunities for designers to connect and celebrate, while showcasing the latest trends in commercial design. Highlights include the DIFFA Chicago Gala, Interior Design’s HiP Awards, and the 33rd annual Best of NeoCon Awards. New activations and experiences include NeoCon’s live studio, the Sustainability Lab by Metropolis, and DesignScene by SANDOW. Attendees can also take in key design thought leaders and influencers around relevant industry topics at the new “NeoCon Talks” series by Work Design Magazine. For more information about NeoCon events and experiences, visit their website.

Scandinavian Spaces looks to refine the trade show experience
Scandinavian Spaces is debuting a new showroom in THE MART during NeoCon 2023, featuring innovative products and contract furniture, as well as a full-functioning café called ScandiCafé. Attendees can enjoy traditional Swedish pastries and coffee while interacting with the furniture. The showroom reflects the trend of providing an immersive, personalized experience to refine the trade show experience for the design community. Scandinavian Spaces showroom and ScandiCafé suite #366

Features

IBM CEO Arvind Krishna has stated that back-office functions like HR could be paused in many cases because they can be undertaken by AI, potentially reducing IBM's need for office space. About 7,800 people could be replaced by AI or automation, which equates to about 780K SF of office space that could become obsolete for the company. While AI will mean many humans being replaced by technology, it is likely to create new roles as well, in fields like data analytics.

Workspace News

As more employers demand a return to the office, a lack of clarity around hybrid working is causing animosity from workers who don't understand or agree with the changes. Experts suggest leaders clearly communicate and justify why they're bringing employees back, and avoid focusing RTO plans around broad goals like collaboration. Hybrid working models are tough to establish, and most companies haven't nailed it. There's no set formula that works, and much of the success of hybrid comes down to how it's executed by individual team managers. Companies need to equip managers to think about when work needs to be synchronous versus asynchronous.
A new report from Techspace based on a YouGov survey of 1,000 UK tech workers claims that 7 in 10 consider hybrid working a key factor when considering a future employer, with 75% of tech workers surveyed already working in some form of hybrid arrangement. Flexible and hybrid working policies are considered high priorities by 78% and 67% of tech employees, respectively, and other important factors include opportunities for career development. The report highlights a disconnect between what employees want and what managers need, with employees believing they are more productive when working from home but managers thinking the opposite. The biggest driver for heading to the office is to be with colleagues and have social interaction, followed by meetings and collaborating with colleagues in-person.
An adaptable hybrid work model that accommodates full-time remote work is crucial for employee retention, increased productivity, access to a broader talent pool, cost savings, and overcoming cognitive biases. Companies that fail to adapt risk losing their most valuable asset: their employees. Flexible hybrid work models significantly boost productivity and employee involvement, and remote work capabilities reduce absenteeism and turnover. Successfully implementing an adaptable hybrid work model can be challenging, but with thorough planning and communication, it is achievable.
New survey results from Cpl's Talent Evolution Group show that UK employees are more likely to leave their job due to negative work culture or a toxic environment than because of limitations with flexible working. The top reasons for employees to consider leaving their job are ineffective or toxic line management, lack of recognition, negative work culture, toxic working environment, and poor job security. Employers must prioritize employee satisfaction and create an inclusive and positive culture in the workplace to attract and retain talent.
Landlords and tenants are collaborating to address the challenges of hybrid work and environmental sustainability. They are exploring more efficient ways to manage office usage patterns, including flexible lease terms, and establishing management committees to change building operating parameters. Strategic partnerships between tenants and landlords are also being emphasized to combat rising energy costs and deliver on sustainability initiatives. The Future of Office Space Summit held in Sydney, Australia in March discussed these concerns and the need for greater flexibility in lease agreements.

Trends

The workplace is constantly evolving, and understanding the latest trends is key to moving forward. Four trends driving the workplace forward include design equity, the rise of work resorts, uncertainty, and the attention economy. Prioritizing design equity in the workplace leads to increased productivity and better employee retention. Work resorts offer amenities and experiences of a luxury resort, while uncertainty can foster innovation and creativity. The attention economy presents challenges for productivity but also opportunities for personal decision-making. Adapting to new ways of doing things will help thrive in the fast-paced world of work.

Latest Products

Dekko's PURLTM power system is now available. PURL links multiple power units into a daisy-chaining system that allows everything to be powered with just one outlet. Offering up to 31 feet of linked power, PURL provides a safe and reliable option for all power needs. The Ashley® and Electrolite® products can be linked together, providing a safe and rapid power source for connected devices with both USB A and USB C® ports and standard outlet power capabilities. PURLTM is UL Listed for US and Canada, ensuring the highest level of safety and reliability. With just one plug, connect up to 9 power units with up to 6 receptacles each, for a total of 54 receptacles. PURLTM is ideal for spaces requiring convenient and clutter-free power.

"We are excited to release PURLTM as we see this system as a game-changer for work and collaboration areas," said Rick Fox, Executive Vice President and GM for Dekko power and data products. "Our system represents the future of linked systems for spaces with limited power throughout a room, offering a new level of convenience, flexibility, and dependability.”

Herman Miller has introduced Ambit Workspace Solutions, a collection of products designed to enhance the modern office experience. The collection includes screens, storage options, cable management, a cork storage tray, and table leg shrouds, all compatible with Herman Miller's height-adjustable worktables. The solutions provide increased privacy, storage, and organization, addressing common pain points in the modern office environment. The collection is designed to be integrated together to create a tailored solution that increases focus, flexibility, and freedom for any height.

“In bringing this set of solutions to our contract customers, we’re addressing many of the pain points that can be experienced such as feeling exposed when standing at a table, feeling distracted in an open office environment, and having a lack of storage,” says Malisa Bryant, Senior Vice President of Product for Herman Miller.

The KWART chair, designed by Ton Haas for Dutch manufacturer Circuform, has an LCA score of 0.25, making it the chair with the lowest eco-footprint on the market due to being produced from fully recycled plastic in the Netherlands. Circuform also takes a deposit from buyers and refunds it upon return of the chair to be reused in their production process.
The U2 series of steel tables by Amsterdam-based designer Peter van der Water can be used as coffee or end tables, and even as temporary laptop desks. They're made from powder-coated steel with a matte finish on the outside and glossy finish on the inside. The U2 tables are produced by Dutch furniture manufacturer Cascando.
Design Pool, LLC is debuting the Swallowtail Farm Collection of pattern designs at NeoCon 2023. The collection includes fourteen patterns of florals and textures that coordinate with each other and current Sherwin-Williams healthcare color palettes. The designs feature six medicinal plants and Design Pool’s signature digital texture, printed on EnviroLeather PRINTS, a line of wipeable, coated fabrics. The collection aims to positively impact patient experience in healthcare settings. Design Pool is the only pattern library created exclusively for interior designers, partnering with digital printers to offer over 800 patterns printed on various materials. Attendees can find Design Pool at NeoCon 2023 on the 7th floor of theMART in Booth 7-3050.
Whitney Brothers® has introduced the Live Edge collection, a new line of tables and seating for Early Learning environments inspired by the popularity of live edge wide plank furniture. Each piece features a unique design infused with character and realism that intentionally draws the attention of children and fundamentally changes how they engage a space. The Live Edge design transforms a common table, chair or bench into an important contributor to the look, feel and appeal of an Early Learning environment. The items also coordinate seamlessly with all other pieces in the company’s award-winning biophilia-inspired Nature View Collection, which encompasses 71 separate furniture pieces that have earned multiple design awards.

LightArt Adds Marina To Award-Winning Reclaimed Ocean Plastic Pendant Collection
LightArt expands their Ocean Coil Collection with a new shape, Marina, a blue-greenish hue made from a unique mix of reclaimed ocean plastic. The pendants are made from 100% recycled polypropylene sourced from ocean-bound and nearshore waste and are equipped with LightArt’s Performance Lighting Core. The new Ocean Coil O3 is a spherical pendant available in two sizes. LightArt partnered with OceanWorks to combat ocean plastic and used Sea Foam and Seagrass materials to create Marina. Each pendant diverts up to three pounds of waste and is finished with TGIC-free powder-coated hardware.

Three-Dimensional Metal Surfacing Solutions Offer a New Layer of Design
Móz Designs has expanded their Engravings Collection with six new patterns, offering a three-dimensional decorative metal surfacing solution suitable for interior and exterior applications. Made from renewable aluminum, the Engravings Collection offers a highly durable, easy to clean metal material suitable for high traffic areas. The collection is available in over 20 standard Powder Coat hues with custom color availabilities. The Engravings collection is available as a Sheet for direct application to walls, as a material of choice on Móz’s Column Solutions, or as part of Móz’s Terrace Panel system for a ready-to-install product that minimizes on-site labor.

Other News

New York City's economic future depends on embracing the shift from a city dedicated to productivity to one built around pleasure, creating mixed-use neighborhoods that bring libraries, offices, movie theaters, grocery stores, schools, parks, restaurants, and bars closer together. The city must reconfigure itself into an experience worth leaving the house for, and become a Playground City. The article suggests six crucial lines of action, including ending single-use zoning, converting offices into residences, and empowering citizens to participate directly in making the Playground City.

Sustainability

Kravet, a fabric company committed to sustainable practices, has partnered with the Seaqual Initiative to create a collection of performance fabrics made from repurposed marine plastic waste. The InsideOut Seaqual Initiative Sustainable Textures collection offers 56 design-forward styles in an oceanic palette of sandy neutrals, sea-glass greens, and marine blues. Kravet has recycled over 1.1 million plastic bottles into its products and continues to develop more sustainable goods, taking a holistic approach to sustainability that includes energy-saving measures, biodegradable packaging, and donations of leftover textile samples to design schools.

Coworking

Co-working spaces are becoming more popular, but their valuation is challenging because they are sold with month-to-month contracts rather than long-term leases. Some real estate professionals are trying new approaches, such as projecting future cash flows and discounting them back to their present value, to value co-working spaces. Co-working tenants are viewed like any other office tenant, but there are special considerations, such as the lack of creditworthiness and corporate guarantee. Co-working and flex space are becoming more common and accepted, and their valuation methods are evolving to reflect their staying power in the office ecosystem.

Trends in Commercial Projects from Around the Globe

Miro's Amsterdam office, designed by M Moser Associates, prioritizes collaboration and employee autonomy to support the needs of its remote workforce. The open and flexible space includes hospitality-inspired areas like a bar and botanical lounge, as well as circular practices like repurposing original materials and leasing furniture for future growth. The physical space reflects Miro's values and mission as a digital collaboration platform, providing a space for tasks that cannot be completed remotely.
Mark Odom Studio designed a creative office for INK Games' new Austin HQ by transforming found space into a light-filled, sprawling work environment. The open floor concept includes a variety of meeting spaces, work zones, and gaming zones to encourage team collaboration. The unique angles and footprint created an opportunity to offer a large private outdoor courtyard with easy access and connectivity from the indoors. The project was designed to attract creative and progressive tech companies relocating to Austin.

Upcoming Industry Events

NeoCon 2023
June  12-14, 2023 | Chicago, IL
 
NeoCon has served as the world’s leading platform and most important event of the year for the commercial design industry since 1969. A launch pad for innovation—NeoCon offers ideas and introductions that shape the built environment today and into the future.  

Clerkenwell Design Week 2023
May 23-25, 2023 | London

Clerkenwell is home to more creative businesses and architects per square mile than anywhere else on the planet, making it truly one of the most important design hubs in the world. To celebrate this rich and diverse community, Clerkenwell Design Week has created a showcase of leading UK and international brands and companies presented in a series of showroom events, exhibitions and special installations that take place across the area.

Orgatec 2024
October 22-26, 2024 | Cologne, Germany

Orgatec is the International trade fair for office and property equipment. Held in Cologne, Germany.

Industry Briefing

BIFMA Welcomes New Membership Services Director, Nicole Forward
BIFMA has hired Nicole Forward as their new Membership Services Director after a year-long search. With over fifteen years of experience in non-profit organizational development, Nicole will contribute to BIFMA's initiatives to create added value for their members. Her experience in building relationships with business and legislative leaders will also support BIFMA's advocacy work. Prior to joining BIFMA, Nicole worked for the Michigan Energy Innovation Business Council and several arts and cultural organizations. In addition to leading membership growth and engagement initiatives, Nicole will oversee member services, programs, and events.

Susan Shockey Joins Nevers Industries Design Team
Susan Shockey has joined Nevers Industries as Design Strategy Specialist, focusing on enhancing customer experiences and migrating product pricing and CAD resources to the Configura CET platform. She will also assist with corporate product development and visual identity assets, and maintain product marketing imagery. CEO Chris Evenstad is excited to have her on board to protect and project the company's brand image and respond to customer expectations.

IOPFDA Rebrands as Workplace Solutions Association with Expanded Mission to Better Serve Members
The Independent Office Products & Furniture Dealers Association (IOPFDA) has rebranded as the Workplace Solutions Association (WSA), Powered by ISSA, to reflect its expanded mission to encompass the entire independent office products and furniture industry. The new brand identity will help attract suppliers and service providers and empower the association to better serve its members with education, advocacy, and networking opportunities.

Hightower Embarks on a Human-Centric and Sustainable Future with Key Leadership Appointments
Hightower is prioritizing human-centric and sustainable business practices through key leadership appointments and organizational advancements. The company aims to create a more empathetic and innovative work environment while maintaining its dedication to customer success. Notable advancements include the promotion of Jessica Ahlering to Director of Revenue Operations and the hiring of Jenna Geigerman as Chief Operating Officer. Natalie Hartkopf, Co-Founder & CEO, will focus on enhancing Hightower's product sustainability and community engagement while leading the company's commitment to social and environmental responsibility.

Novità Communications Makes Inc. Best Workplaces 2023 List
Novità Communications has been recognized again as one of the best workplaces in America by Inc. magazine. The award is based on a company's culture and how it is nurtured, shared and built upon. Novità's team members were asked to fill out an anonymous survey that measured company culture. This is the second time Novità has received this honor, which reflects their passion, creativity, inclusivity, and collective goal to make a difference.
Find the best Contract Furniture Industry jobs and hire the best talent.
Dear Stephen, My son is graduating from college this month and he is interested in the furniture industry. I'm a regional Vice President for a major furniture manufacturer out of Grand Rapids. I've had a long and fulfilling career. I love the company that I work for and I love our industry.
We are a highly respected and leading European office furniture manufacturer with a rich legacy of providing innovative and high-quality solutions to our clients. With a strong presence in the European market, we are now expanding our operations to the United States. As part of this exciting growth journey, we are seeking Independent Sales Representatives to join our team and help establish our brand and products in the US market.
The Regional Sales Manager will be responsible for the sales and sales growth of The Senator Groups products in the region of the country outlined. The Regional Sales Manager works to ensure profitable growth in sales, revenue through planning, execution, and management of the independent sales organization they lead.
Build and maintain client relationships. Track and record metrics throughout sale process. Meet and exceed financial goals.
Indoff is expanding and in need of experienced outside sales professionals in your area. If you’re tired of missing out on money due to low commission rates or you’re sick of quotas, then Indoff is the perfect solution for you.
BiSemA Corporation and BiSemA USA LLC seek ambitious independent sales executives from Chicago. Self-managing, highly motivated, has extensive experience in the office furniture industry and can work remotely. 
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