Design Within Reach Is Out Of Reach In This Economy.

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.


Bird * said...

personally, i NEVER purchase ANYTHNG at full price anymore. EVER. because I can find EVERYTHING at a "discounted" price.

I am going to assume that I am not the only person bargain shopping.

When I purchase, I but nice things, brands including: Room & Board, BCBG, Hype, Joe's Jeans, Kenneth Cole, Pureology, Acura, etc...

ALL of these items are found consistently at discounted rates. Look at TJ Maxx, Nordstrom Rak, Off Saks, Room & Board Outlet, IKEA.

Unfortunaely, Design Within Reach does not cater to the majority of people that are willing to spend money on big ticket items, but need to see added value, or have the perception of a "discounted rate."

I recommend Design Within Reach start offering added value to it's consumers, and they may see an increase in sales.

I purchased new furniture about 6 months ago. I looked at DWR, but the prices were way too high. I found beautiful, trendy, modern, comfortable furniture at Room & Board's outlet.

I spent 2000$ and felt good. No buyers remorse, I never felt that I had spent too much, because I found added value with getting two pieces for the price of 1 (essentially.)

DWR: You gotta keep up - do your market research.

Mark Shockley said...

DWR needs to be a little more customer oriented in these tough financial times. I went into the DWR Showroom on 14th St in NYC with the firm intention of buying 2 Philippe Starck's Bubble Chairs. I asked if they could offer a discount on delivery to Jersey and they told me No.

Most places you drop $1200 on a couple of chairs, delivery is free....

I ended out walking.

alex in wonderL.A.nd said...

The goal of DWR was to offer everyone access to what often was only available through via an interior designer. Mass merchants like IKEA, and the Wm Sonoma empire of stores are all creating in huge bulk. Most (not all) DWR designs are not made in large quantities and many have the potential to increase in value over time. Growing up in a house of mid century pieces, I see things that will be passed down and are works of art. The big box furniture has it's place but I think the econ crisis will hopefully teach us to buy less but buy the best whenever possible. DWR, you can do it!

Rabbi Shai Specht Spiritual Guide said...

This blog is BEAUTIFUL and very informative!

Sending lots of Good Vibes your way.

C'mon people, it's only a dollar.