Furniture Rental An alternative business model for the use of furniture (How furniture rental helps reduce the environmental impact in the furniture manufacturing supply chain) Presented by Tim Swaddle Sales Manager CORT furniture rental 9th December 2008 Who is CORT? CORT is the world’s largest furniture rental company We have c £300m of furniture inventory at any one time in the US We have a global network of independent suppliers. CORT has 30 years + experience of residential and commercial furniture rental in the United States, with over 200 locations and 2800 staff. CORT is Berkshire Hathaway company. - Chairman - Warren Buffet Who is CORT? In January 2008 CORT made first acquisition outside US by purchasing the UK based Roomservice Group, which had over 20 years residential furniture rental experience in the UK. The UK business now comprises two brands – - Roomservice by CORT – for the residential market - CORT furniture rental - for the commercial market CORT furniture rental has a new vision of commercial furniture rental by using high quality furniture from suppliers such as Herman Miller, Senator, Global, Boss & Komac What is CORT? A business that uses all aspects of the furniture supply chain We are …… A purchaser of furniture A user of furniture A supplier of furniture to end users An extensive re – user of furniture A disposer of furniture How can rental help reduce environmental impact? A common business event; • A new project team is set up for a 8-12 month project. • Team size will vary throughout project say 10 -30 people. • Office space exists but team needs workstations, chairs storage etc. • Some “spare” furniture exists, but not enough……. • Project team needs common design/standard of office. What happens? Current Model Office furniture short / medium term requirement lifecycle1-24 months Acquire / Purchase / Use Dispose Rental Model Office furniture short / medium term requirement lifecycle 1-24 months Acquire Use Return Refurbishment for re- use End of rental life disposal The rental cycle of use, refurbishment, re-use & disposal • Through the extensive use of this cycle, we can keep furniture in showroom condition. • Anticipated life of residential furniture 24-36 months. • Anticipated life of office furniture 36- 48 months. End of rental life disposal occurs in a variety of ways – • Resale to public through our own retail outlets. • Resale to public through other sales channels – ebay. • Trade sale to dealers (office) Purchase, Leasing, Rental Understanding the Difference • Purchase: A customer wants to own for whatever period, has the capital to invest, and has no viable alternative in market place. • Leasing: Usually a payment option for a customer who wants to own, but needs to conserve capital. Fairly static requirements. No flexibility. High early termination penalties • Rental: Conserves capital and maximizes flexibility. Customer has a short / medium term need, but can have long term requirement. Does not need or want to own. No excessive penalty clauses for early return in longer term rental periods. • Rental also has an asset management built to it. There are no storage costs or disposal costs for furniture not longer required - it's taken away by us and can be replaced from our own stocks at any time. • Rental and leasing are both off balance sheet, the key to rental is really the flexibility to upsize downsize and change existing arrangements. When could you rent furniture? • Staff Relocation • Rental / Temporary housing. • Fixed Term Projects typically less than 24months • Departmental Expansion • Training meetings • New Office / Office relocation • Lead time gaps on new furniture orders • Emergency/ disaster Rental Products range – What we look for In addition to the design aesthetic and overall practicality of the furniture we use, we take into consideration all factors that allow us to re-use the product: The durability of construction for both base and fabrics How easy to repair are the finishes? How easy to replace are the various components? Length of warranty For office products we are increasingly driven by customer supply chain requirements, where we have to demonstrate the sustainability of the products we supply to them. Rental Product range Herman Miller – Cradle to Cradle Herman Miller’s Design for the Environment (DfE) design process, embodies William McDonough & Michael Braungart’s ‘Cradle to Cradle’ design philosophy. This means designing high quality products that are safe, healthy, and ecologically sound. The DfE process is independently assessed and certified by McDonough & Braungart’s company, MBDC, who are seen as the leaders in eco-effective design principles. The Mirra task chair was the first product to be created entirely within the DfE process. Rental Product range Herman Miller – Cradle to Cradle “Our long-term emphasis on product durability, innovation and quality demonstrates that our company has designed environmentally sensitive products for decades. Today, Herman Miller furniture products come with a 12-year warranty – in use, their lifespan is much greater. As proof, one need only consider the many classic Herman Miller products manufactured in the 1950s that are still being used today. And, as Herman Miller continues its ‘journey towards sustainability’, designing with consideration for environmental impact remains a fundamental part of our corporate strategy. “Herman Miller has been a pioneer in the environmental movement for decades. With their adoption of MBDC’s cradle-to-cradle design protocols, they have taken that commitment to a new and immensely more powerful level, moving beyond eco-efficient to true sustainability.” William McDonough Herman Miller Product lifecycle Product range – chairs Product range – desks /meeting tables Abak Environments Summary • Renting furniture makes a significant difference the whole life usage of furniture. • Ideally suited to time periods of 1- 24 months, but can be suitable for longer if flexibility is required. • Continual refurbishment and re-use extends the lifecycle of the furniture. • Through the use of rental a typical short term cycle of use and disposal becomes one of extended use.
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