One of the most impressive collections of modern furniture, a great looking and well functioning e-commerce website, a well-written 'design notes' newsletter and blog, beautifully designed stores, and some of the nicest looking, impressive catalogs ever produced can't help even Design Within Reach's online and in-store sales in this economy.
Even with their newest addition of DWR "limited", a purchase or an auction on one different unique new or vintage item each day, one of my favorite design stores is suffering. I came across this unfortunate, but not unexpected, news today.
E-commerce sales fall almost 30% at Design Within Reach
The economy continues to hammer revenue at Design Within Reach Inc.
Web sales were down for the third straight quarter, falling 29.7% to $5.2 million in Q3 2008 from $7.4 million in the prior year quarter. The Internet accounted for about 12.3% of sales in Q3 2008 vs. 15.2% in Q3 2007.
Store, or studio, sales also declined, by 10% or $3.3 million, from $32.1 million in Q3 2007 to $28.8 million in the third quarter of 2008. Overall sales were down 13.7%, or $6.7 million, for the third quarter ended Sept. 27, 2008, to $42.3 million from $49 million in the same quarter of 2007.
Design Within Reach is a multi-channel retailer of modern design furnishings and accessories. The company, No. 263 in the Internet Retailer Top 500 Guide, depends on affluent consumers for its business and the company cites the stagnant housing market and the mortgage crisis as key reasons for sagging sales.
Design Within Reach reported an overall loss for Q3 2008 of $5.6 million compared with net income of $2.4 million in the prior year quarter.
Through the first nine months of fiscal 2008, web sales decreased about $4 million, or 18.3%, from $21.8 million in the first three quarters of 2007 to $17.8 million. Net sales through nine months of fiscal 2008 declined 3.8%, or $5.5 million, from $141.9 million in the first nine months of 2007 to $136.5 million.
Source: Internet Retailer
Positioned to appeal to affluent customers, their prices simply are not competitive enough. I even affectionately used to call them DOOR (Design Out Of Reach) and often find an item that I like there and then scour the net for a better price. And although they have sales, the discounts and reductions are never very large and I've never known them to give promotional or discount codes.
Above: their Design Notes Blog
That said, they still are a heaven for those interested in modern design and interior decor and one of the only companies whose catalogs I can never bring myself to throw away. Like I mentioned at the beginning of this post, I love the look and functionality of their online store, their catalogs, their newsletter and blog.
They are one of the few companies who knows how to 'brand' themselves. They have a cohesive look and style across all their communications, create promotional material which reflects the quality of their products and consistently remind customers of their products and offerings without being intrusive or annoying. Their newsletter and blog are optional e-mail sign ups and their site is easy to maneuver and is searchable numerous and convenient ways. Proof that sales are not directly tied to 'branding'. After all, one cannot account for all unforeseen impacting factors.
I think that with the opening of so many stores across the country in the past few years unfortunately coinciding with the numerous foreclosures and mortgage crises, they simply overextended themselves and are now paying the price.
Maybe now, their sales will be a little more 'accessible'. Here's hoping... because I certainly don't want them to go away.