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The death of the cheap bench

The demise of more than a handful of office furniture manufacturers over the last couple of months causes one, as it always does, to ponder. Beyon, JF Nott, FCC, and rumoured others who shall remain nameless for obvious reasons, but about whom the rumours may have consolidated by the time this is printed. Commiserations to those whose projects lie in tatters, job losses and desperation; many of us know what that’s like, and all sympathies to you. But from here, the pondering takes in not only the gloomy prospect of a recession to equal or outdo the very lean years of 90 – 92, but also the wider picture of the way workplaces are changing, and the way the people in them need – or don’t need – furniture.

All these companies do – or did – bench systems. Nothing so notable in that, you say – most companies do bench systems now. But with the arguable exception of Beyon, they were also operating at the, how shall we put it, more budget conscious end of the market. Sorry if this seems inexcusably vague, but the truth is no manufacturer, dealer, specifier or client will give someone with connections to an industry publication more than a very general budget guide to the price paid per workstation in a given job. All someone like me has to go by is price lists and the knowledge that heavy, not to say apparently suicidal, discounting is a not unknown practice in the office furniture industry.

So companies with small margins, who aren’t able to charge large amounts for their product, for whatever reason, come under pressure when times are hard. But times aren’t that hard – yet. So what’s happening? John Sacks, of JSA Consultants, who has run a few office furniture companies in his time, explains that in many cases such companies are under capitalised, and although bench systems are by and large cheaper to make than the equivalent single workstations, the related costs such as delivery and installation are the same. ‘But the most serious problem for office furniture companies,’ says Sacks – manufacturers and dealers alike – ‘is that lower product specifications and simpler products have led to lower selling prices and that although the percentage margins for manufacturers and dealers might well still look satisfactory, the cash margins are hopeless. For example, assume a margin of 25 per cent; when a 250 workstation order was worth £1/4m, the cash that generated was £62,500. Today, say five years’ later, the order may be worth as little as £125,000 and the margin is perhaps only £31,250. That amount of cash – worth even less after inflation compared to the £62,500 – has to cover the same costs as before in winning the order as well as delivering and installing it. It just doesn’t work.’

So it’s not only margins that are under pressure; the whole business model needs an overhaul. Further than that, the all-singing, all–dancing bench – hailed a few short years ago as the new and glorious solution to the demands of flexible and mobile working – is in fact much harder to reconfigure for ever-changing project teams, in both accommodation and IT terms, than the standard workstation. Kind of stands to reason. Creative companies, you know, the advertising, web and design organisations that always seem to be featured in magazines not a million miles removed from this one, love all that bench thing – possibly because, as their workers are knowledge workers, they are anyway mobile and work with laptops, and also (less demonstrably) their mentality is less wedded to territory and ownership than those in more traditional organisations. Also because the bench demonstrates a democratic organisational culture that you are more likely to find in a creative company.

So. If not the death of office furniture as such, or even the death of the bench as such, then at least the incipient death of the cheap bench. Which suggests, as implied above, that bigger margin companies, and that almost always means companies with greater brand value, will survive and prosper. And this is because such companies are selling not just a product but an idea that goes with it, a feeling, an emotional proposition to which people can attach their own individual aspirations, a whole array of non-tangible elements. A brand, in other words. Vitra is the perfect example of this phenomenon, and so too is Herman Miller. The products, by and large, are of course excellent, the result of profound and intelligent design thinking, a commitment to such process by the management of the company, and the result of a corporate culture that enshrines such values, and many other enduring intangibles, in the company’s activity. It also helps if the products are higher priced. (I thought Beyon was a very interesting phenomenon when it entered the UK office furniture market a few years ago, because from the word go, the word was ‘brand’. But as it turns out, maybe the company’s financial structures weren’t strong enough. You can’t live by ‘brand’ alone.)

In the office furniture market, ‘brand’ must now carry a whole lot more meaning. It is no longer enough for a company’s brand just to mean quality, longevity and design excellence. It must also represent not only sustainability (I don’t want to be boring about it, but you can’t ignore it) and service. And in the context of the new, IT-driven, knowledge-worker inhabited, flexible, mobile and (hopefully) very sustainable world of work, that service must somehow be represented to clients as helping them figure out how to operate. An office furniture manufacturer becomes a workplace design consultant. Haworth (see FX July, p?????) has worked this out, and because it is coming from behind its major competitor Herman Miller in the design value stakes, it has been able to more or less reinvent itself as such, with the help of a brand spanking new eco-HQ, some sleek new products, and a carefully developed and very effectively written set of new marketing messages. It remains to be seen how successful such a brave change in direction will be – but it was as obvious to Dick Haworth and his board as it is to you and me that the old way won’t work any more.

There’s a little sting in this tale, a reassuring one perhaps, especially to designers, manufacturers, salespeople and all the other members of the office furniture community who wake up screaming at the ghastly prospect of the imminent death of their industry. Expensive desks become cheap tables, highly engineered chairs become simple to use and to look at – so where is the money going? The insight is from Adrian Campbell, senior associate at BDG Workfutures and the man in charge of specifying furniture, and it has a resonance that I promise we will return to in these pages, because it touches on where design itself has to go. ‘I don’t know’, he said, wrapping up a conversation about the death of the cheap bench and the possible disappearance of office furniture as we know it: ‘I like furniture. I just like it, I like a piece of furniture in a room. It’s an emotional connection – people have an emotional link with furniture.’ I knew exactly what he meant, and so do you. It’s emotional. And that’s why a) the clever companies who see the necessity of developing their brands to mean more than just ‘stuff’ will not only survive but thrive, and b) we’ll be using desks, chairs and storage designed for working at, on or in, for generations to come. Phew.

Posted in FX Column - assorted design writings.