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Design on the line

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									                                                                                                                                                                                                                                         ISSUES




            Design on the line
             In the first of a two-part investigation into the effect of discounting   W
                                                                                                  ind the clock back a decade and shopping around
                                                                                                  for the best price on interior products was hard
                                                                                                  work. It was either a case of letting your fingers do
                                                                                                                                                           Hannah Wilkie at Designers Guild describes it as ‘a bugbear’
                                                                                                                                                           – the sheer number of websites and magazine adverts
                                                                                                                                                           and the range of fabrics that they offer suggests few
                                                                                       the walking on the phone, or wearing out your shoe leather          manufacturers are attempting to stem the flow. Indeed,
             on the interior design industry, idFX looks at how on-line retailing is   traipsing around town.                                              most have little incentive to do so as the more fabric
             affecting the traditional marketplace                                         Now almost everyone is hooked up to the internet,               they sell, the more money they make, whatever the retail
             WORDS BY KAY HILL ● PHOTOGRAPHY BY GETTY IMAGES                           however, and a dozen or more price comparison search                price. At www.thefabricshop.co.uk, for example, there
                                                                                       engines are just a mouse click away. This is good news in the       are more than 60 designer fabric houses featured; on
                                                                                       short term for members of the public who are doing their            www.fabrics4less.co.uk there are twice that number,
                                                                                       own designs, but a huge challenge to the way that the               including Sanderson, Nina Campbell, Osborne & Little,
                                                                                       interior design industry as a whole does business.                  Designers Guild, Larsen, Manuel Canovas, Colefax and
                                                                                           With almost anyone now able to undercut normal retail           Fowler, and Jane Churchill.
                                                                                       prices by going on-line – particularly with designer fabrics,           Some sites allow contact by e-mail only, others have a
                                                                                       Italian furniture, wallpaper and white goods – design               non-geographical number, and they don’t court publicity.
                                                                                       showrooms and retail outlets are rapidly becoming under             When offered the chance to discuss the issue, a spokesman
                                                                                       threat. As we will examine in detail in next month’s issue,         for www.shop4fabrics.co.uk replied: ‘The majority of
                                                                                       interior designers are also feeling the squeeze as clients          branded design-led fabric suppliers are against on-line
                                                                                       scrutinise bills more closely and are less willing to accept        trading because they want to promote their brands through
                                                                                       large mark-ups on supplied goods.                                   their own network of fabric shops. Therefore it is not in our
                                                                                           On-line fabric discounters in particular are a problem          interest to make any comments.’
                                                                                       for designers and decorators who make money from the                    One interior designer who runs his own on-line fabric
                                                                                       mark-up between trade and retail price, and also affect             store did agree to be interviewed anonymously, and reveals
                                                                                       designers and fabric houses that operate retail showrooms.          what he calls the ‘duplicity’ at the heart of the trade. He
                                                                                       Designer Brian Lawrence, who has a showroom called Garin            claims that dozens of fabric companies he has accounts with
                                                                                       1820 at Chelsea Harbour, explains: ‘The person in the high          not only know that he retails on-line, but some of them
                                                                                       street selling fabrics is giving a service just by being on the     actively support him. ‘They are aware of it, but they will
                                                                                       high street – the person working out of an office in the            never admit it,’ he says. ‘Some of them publicly say that
                                                                                       middle of nowhere has no overheads and is not offering a            they don’t sell to discount retailers but then have someone
                                                                                       service. People use shops like libraries, then buy things           in customer service dedicated to looking after our needs.
                                                                                       cheaper on-line – it’s not a fair situation. If this carries on,    On-line retail is actually a significant part of their business
                                                                                       there will be no shops left.’                                       and it’s growing all the time.’
                                                                                           Amanda Meade of Linconshire-based English Country                   He has had experience of fabric companies shutting down
                                                                                       Living is in a similar situation, having a retail shop and mail-    his accounts, which he says breaches both UK and European
                                                                                       order company in addition to her interior design practice:          free-trade regulations, but he feels that the tide is turning,
                                                                                       ‘We constantly spend hours helping people in the store              and that once interior designers and decorators fully embrace
                                                                                       select fabrics, to then be told they are not buying the fabric      the concept of charging for their time and expertise rather
                                                                                       or wallpaper from us as they can get 25 per cent off by going       than making their living on mark-ups, then internet retailing
                                                                                       to discount houses.’ She cites a recent case when she spent         of fabric will become mainstream. ‘Ultimately we will work
                                                                                       hours creating a soft furnishing scheme using 55m of Colefax        side by side with the showrooms,’ he says, agreeing that
                                                                                       and Fowler fabric at £75 a metre, only to be told at the last       they should introduce fees for looking at their pattern books.
                                                                                       minute that the customer had found a number in the back of              One fabric house which is seldom mentioned on these
                                                                                       an interiors magazine that would give her 25 per cent off. ‘It      websites is Zimmer + Rohde, since the company takes a firm
                                                                                       was ethically wrong, but the client said that she was thinking      line against those with trade accounts selling product in this
                                                                                       about the money,’ she says. As a result, Meade has now              way. ‘We don’t like it,’ says a company spokesman. ‘If we
                                                                                       started charging for curtain estimates.                             find out who is behind an on-line discount service we will
                                                                                           Design consultant Heather Luke used to run a retail             shut down their trade account.’ Despite the fact that fabrics
                                                                                       store and found she often had the same problem, but in              from Sanderson and Zoffany are widely available from on-line
                                                                                       her case she mitigated the issue by asking for a library fee        discounters, David Smallridge, managing director of parent
                                                                                       if customers wanted to borrow her books, refunded on                company Walker Greenbank, maintains that in order to
                                                                                       order. ‘I used it as a way to get rid of time-wasters,’ she says.   ‘provide a full service to the end-user’, company policy is to
                                                                                           While most fabric houses are well aware of the problem –        ‘rigorously pursue all sales enquiries via traditional channels,


34 idFX APRIL 2006                                                                                                                                                                                                      APRIL 2006 idFX 35
ISSUES


                          such as our retail partners, interior designers, specifiers and      that furniture has to be specially adapted to British
                          distributor showrooms’.                                              requirements. ‘This all pushes up the price of UK products,’
                               Others take a more pragmatic approach. Allan Maxwell,           he says, warning that those who choose to buy from abroad
                          MD of Malabar, says: ‘Trade account applications are                 might find that their purchases don’t meet UK regulations.
                          carefully vetted and, once approved, a standard trade                     George Khachfe, MD of Poliform and owner of the
                          discount of 40 per cent is given to all trade customers.             Chelsea Harbour showroom Interdesign, also warns that
                          Provided they have met our criteria and have stocked                 prices quoted on internet sites are not always like for like –
                          themselves with Malabar pattern books in order to service            it may look like the same sofa, but perhaps it has a cheaper
                          enquiries effectively, we can’t dictate or control the prices at     filling or a more lightweight fabric. He seems more angry
                          which they then sell our fabrics to their customers, whether         than worried by the on-line retailers: ‘My overheads are £1m
                          they are interior designers, a high street shop or an internet       a year and they just ship boxes. But for me it’s not a threat –
                          operation. We know it makes it difficult for some of our             the more the market for sophisticated design develops, the
                          trade customers who work hard from high street shops, but            better it is for us. Value for money is also about service.’
                          this isn’t something that we can control without legislation         Internet retailers, he says, cannot possibly compete with the
                          from central Government.’                                            service he offers in terms of surveying the site, measuring
                               At Nina Campbell, whose fabrics are widely available            furniture and installing it.
                          on-line along with those of its agent Osborne & Little,                   That is also the view of Jeff Heading, B&B Italia’s new
                          Max Konig believes that since such discounting is not illegal it     London general manager: ‘We offer many services not
                          is futile trying to control it. ‘Retailers have to understand that   available via an on-line retailer, such as qualified and
                          this is the way the world is going, rather than trying to fight      experienced sales consultants and a full after-sales service,
                          it,’ he says. ‘You can’t turn the clock back. As a brand I don’t     including delivery and installation. We’re committed to
                          think it affects us at all. In fact, it probably does us a favour    providing a complete service, which is what design-savvy
                          as our products are more widely available. But I have a lot of       buyers expect.’
                          sympathy for the decorators who feel that they are losing out,            And that, perhaps, is what will ultimately protect the
                          and if there was something we could do about it then we              industry. ‘It’s not just about price,’ says Brian Lawrence. ‘It’s
                          would, but by law you can no longer enforce a retail price.’         not a bargain if you save £200 on a fridge but it arrives on
                               Stopping the trade accounts of such retailers would, he         your driveway in a crate, when a local supplier would deliver
                          says, only damage his company: ‘You could stop their                 and install it.’ Allen Maxwell at Malabar agrees: ‘In our
                          accounts, but then they could be spending £50,000 a year.            experience the majority of customers prefer the personal
                          Perhaps the real issue we should be looking at is that these         service and advice offered by a real rather than on-line store.
                          companies are prepared to make less of a mark-up, just               They want to see the fabrics first-hand and be advised on
                          10-15 per cent, as opposed to the 30-40 per cent that                colour options, suitability and availability in discussion with a
                          traditional outlets demand.’                                         competent sales person or an interior designer, so we are
                               The scenario is not just confined to the fabric industry –      confident that trade customers with physical shop premises
                          furniture showrooms are also being undercut by internet              should not suffer in the long run.’ idFX
                          stores. In March www.europebynet.com was offering a sofa
                          by Poliform at what it said was 48 per cent less than the RRP,       Next month: Design fees versus mark-ups – how interior
                          while www.intirium.com had products by companies                     designers are responding to price-conscious clients
                          including B&B Italia, Cappellini, Cassina, Driade and Flexform
                          at up to 40 per cent off. The problem is particularly acute
                          with Italian furniture. Instead of buying it at trade price           contacts
                          from the UK suppliers, the internet companies buy from                  B&B Italia 020 7591 8111
                          distributors in Italy at a much lower trade price, then have            Brian Lawrence 01732 741308
                          the goods shipped to the UK.                                            Designers Guild 020 7893 7400
                               ‘It is a threat and it will become more of a threat,’ admits       English Country Living 01400 273498
                          James Mair, MD of Viaduct. ‘People come around and try out              Heather Luke 01823 443335
                          all our furniture and then go on-line and find it cheaper. And          Malabar 020 7501 4200
                          if people are just using retailers as a library service then this       Nina Campbell 020 7349 7577
                          will inevitably lead to the death of the high street store, and         Poliform 020 7368 7600
                          that’s not a healthy situation.’                                        Sanderson 01895 830044
                               Surely the problem here is that British design lovers are          www.shop4fabrics.com 0115 9461282
                          being discriminated against by higher prices in the first               www.thefabricshop.com 0845 8001047
                          place? Mair defends the fact that prices are higher in the UK           Viaduct 020 7278 8456
                          – the market is smaller so the margins need to be higher,               Zimmer + Rohde 020 7351 7115
                          and UK fire regulations are tougher than elsewhere, meaning


     36 idFX APRIL 2006

								
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