PRESENTED BY

 TUESDAY APRIL 20, 2021

The Upfront

Hermés doesn't buy Gucci

Herman Miller Acquires Knoll in $1.8 billion Deal - Initial Thoughts

So, yesterday morning, we all woke up to the biggest news story the contract furnishings industry has ever had - at least since the invention of the metal wastebasket by Steelcase in 1912. No doubt, like many of you, my first thought was that it was a left-over April Fools joke that someone had forgotten to post earlier this month. But, no, it's the real thing. Then, coincidently (correlation isn't causation), Steelcase's CEO, Jim Keane, announces his retirement and simultaneously announces the appointment of Sara Armbruster to the position. But that's a story for another day.

Another shock, the combined revenue of Miller and Knoll are ALMOST the exact same as Steelcase (using the last full-year numbers). So who is #1? Do we have a new king? Does anyone care?

So, there are lots of moving pieces to this puzzle to consider. The main question is does 1+1=2? At first glance, many will say yes, but I am not so sure. Miller and Knoll compete with each other, especially in the "museum piece" category. Do you want Eames or Mies? But the combination won't yield any additional benefits to customers, dealers or even shareholders (who are the only people who can afford the museum brands anyway).

Next consider office furniture. They both compete for seating and a bit less so for systems. No gain there. If you're in their camps, you will buy one or the other - not both.

In residential, Miller has DWR, and Knoll has lots of (expensive) residential products to help fill the shelves - which they already do to a small extent. Again, not much gain there. RH (Restoration Hardware) looms large (oh so large as in a market cap of $13.46 billion).

Miller may have a commanding position in seating, though less so lately, leaving Knoll's Formway derived chairs out in the cold. Again, no gain there.

Then there is the dealer situation. They don't share many, so a combination will mean goodbye to many Knoll dealers in lots of markets. What will they do? Move to Teknion and Haworth, of course. But, effectively, there are going to be less dealers around after this.

The only thing not affected is NeoCon, as both companies had moved out of the Mart in the past year. So, mainly a significant gain to those who remain.

Anyway, there is much thinking on this acquisition yet to be done. We have to assume the positives they tout in the PR are pretty much worthless. Saving a couple hundred million in space and employee costs by combining the two companies may benefit shareholders, but who cares about them?

Oh, wait, this is ONLY about shareholders. The purchase doesn't advance design or the curation of both brands' museum pieces (aka antiques) one bit.

So no, my initial opinion is that this is a merger that doesn't add up in any good ways for customers, designers or dealers. And as unions go, most are unsuccessful anyway. This is no rocket, more like a lead balloon. My guess is that no tangible gains whatsoever will come from this acquisition.

The sad truth is that the industry has been left in the dust by shinier, brighter (tech) companies. Steelcase and Miller have long suffered by being run by (boring) numbers guys for most of the past decade. While they turned in so-so results, they failed to innovate much of anything. And when the workplace began to change, they were caught off guard, preferring to purchase residential companies to pump up their sagging numbers. That pretty much holds for Knoll and Haworth as well. When Goldman Sachs engineers a deal like Miller buying Knoll, you automatically know they smelled impatient shareholders looking to make some quick cash. The PR they issued concerning this purchase is almost comical.

Yes, this acquisition is basically a “ho-hum nothing-burger” benefitting nobody in or related to contract furniture. It's a sell-out by Owen and Cogan and an admission that these companies have very little intrinsic value, especially when you consider Slack, an 8-year-old software business communications platform, recently sold to Salesforce for $27 billion, and 83-year-old Knoll went for $1.8 billion.

This transaction is truly a sad ending for Knoll, which has seen no shortage of lousy management and terrible product decisions over the decades. Somewhere the few remaining loyal Knoll A&D followers are crying.

Herman Miller to Buy Knoll in Deal Worth $1.8 Billion

Herman Miller, Inc. (NASDAQ: MLHR) and Knoll Inc. (NYSE: KNL) Monday announced that they have entered into a definitive agreement under which Herman Miller will acquire Knoll in a cash and stock transaction valued at $1.8 billion. The transaction, which has been unanimously approved by the Boards of Directors of both companies, is expected to close by the end of the third quarter of calendar year 2021, subject to the satisfaction of closing conditions.

The combined companies will have approximately the same yearly revenue as Steelcase, which has held the number one spot for decades.

“The merger of Herman Miller and Knoll now  known as “HMK Global” is the most important merger to happen in the furniture industry in 100 years.  Watch out RH!" commented Stephen Viscusi of the Viscusi Group.

Under the terms of the agreement, Knoll shareholders will receive $11.00 in cash and 0.32 shares of Herman Miller common stock for each share of Knoll common stock they own. Based on Herman Miller’s five-day volume weighted average price of $43.94 per share, the transaction terms imply a purchase price of $25.06 per share, representing a 45% premium to Knoll’s closing share price on April 16, 2021. Upon completion of the transaction, Herman Miller shareholders will own approximately 78% of the combined company and Knoll shareholders will own approximately 22%.

In connection with the closing of the transaction, Herman Miller will purchase all of the outstanding shares of Knoll’s preferred stock from Investindustrial VII L.P. (“Investindustrial”) for a fixed cash consideration of $253 million, representing an equivalent price of $25.06 for each underlying share of Knoll common stock. Investindustrial has entered into a voting agreement to vote in favor of the transaction at the special meeting of Knoll shareholders to be held in connection with the transaction.

The combined company will have pro forma annual revenue of approximately $3.6 billion and pro forma adjusted EBITDA of approximately $552 million, based on each company’s respective last reported 12 months and including the anticipated $100 million of cost synergies, implying adjusted EBITDA margins of approximately 16%.

Jim Keane, President and CEO of Steelcase Retires. Sara Armbruster to be new CEO

Steelcase Inc. President and CEO Jim Keane, announced he will be retiring on January 7, 2022, after 25 years with the company, including more than seven years as CEO. Keane will remain President and CEO until October 4, 2021, at which time he will become vice chair and will serve in that role until his retirement from the company. 

Sara Armbruster, who has been appointed Executive Vice President and a member of the Steelcase Board of Directors, will take over as President and CEO on October 4, 2021.

Keane, 61, joined the company in 1997. During this time, he held positions including chief operating officer, chief financial officer, president, and chief executive officer. In his time with the company, he led global teams responsible for corporate strategy, IT, research, product development, design, engineering, manufacturing, sales, and distribution. Appointed to Steelcase’s Board of Directors in 2013, Keane also serves on the boards of Rockwell Automation, IDEO, the Economics Club of Grand Rapids, the Business and Institutional Furniture Manufacturer’s Association (BIFMA) and is on the board of trustees of Grand Valley University Foundation. He is both an at-large member and board member of the Business Roundtable – an association of chief executive officers from America’s leading companies.

The Steelcase Board of Directors began planning this CEO transition approximately two years ago with a final assessment process taking place over recent months.

Steelcase has come under plenty of criticism the past few years for lackluster product development and rudderless direction.

“Although Jim Keane is a smart executive now retiring from Steelcase under his leadership team Steelcase has almost become irrelevant, just ask any Steelcase dealer,” commented Stephen Viscusi of the Viscusi Group.

Since joining the company in 2007, Armbruster, 50, has led corporate strategy and acquisition activities. She has additionally led multiple businesses at Steelcase, including Steelcase Education, Steelcase Health and PolyVision Corporation. Her diverse responsibilities include leading information technology, global design research, new business initiatives, and the company’s COVID global crisis response team.

Armbruster currently serves on the board of directors of Winnebago Industries and sits on the board of advisors of the Institute of Design at the Illinois Institute of Technology. She is also actively involved with numerous non-profit organizations in West Michigan. Before joining Steelcase, Armbruster worked at McKinsey & Company and served as vice president of business development at Banta Corporation, where she led strategy development and managed all merger and acquisition activity.

Armbruster holds an MBA from the Amos Tuck School at Dartmouth College, a master’s degree in international relations from the Paul H. Nitze School of Advanced International Studies at Johns Hopkins University, and a bachelor’s degree in Slavic languages and literatures from Yale University.

Haworth Inn announces new name, reopening date

Hope College's Haworth Inn and Conference Center has announced its reopening date following a $7.5 million renovation.

In addition, the center has announced its new name: Haworth Hotel at Hope College. The hotel will reopen Wednesday, June 16, after the 20-month transformational project, which includes a redesign to all conference and hotel rooms, a new lobby and a full-service Biggby Coffee open to students and the public.

The renovation at 225 College Ave. was funded by Hope College and the Haworth family. It was led by Patricia Urquiola, an award-winning designer and architect based in Milan, Italy.

Haworth Hotel features 48 guest rooms, including a new suite, and 14 conference spaces. The lobby has a grand spiral staircase connecting the first two floors of the building. Much of the hotel showcases products from Haworth, a Holland-based manufacturer of office furniture.

The hotel's ballroom will accommodate 350 guests and double as a student dining space for Hope College. Guests will have access to an on-site fitness facility. In total, there are 31 rooms with two queen beds, 13 rooms with a single king bed, three ADA-accessible rooms and one suite with a king bed.

Hybrid working risks becoming a meaningless term

Hybrid working runs the risk of becoming a blanket term, interpreted on a very surface level, when it has the potential to offer a much greater opportunity for businesses to open up and re-examine the culture and experience of their staff, alongside where they want to take their business in the future, as well as fast-tracking mental health and wellbeing to play a central role in workplace strategy.

Research by the University of London into how businesses have responded to past pandemics and economic crises has helped us to identify four different categories of business ‘type’ likely to emerge from the pandemic. These are: the Business as Usual; the Temporary Pivoter; the Shape Shifter, and the Re-Inventor. While by no means hard and fast, these categories give a good indicator as to how hybrid working might be applied to a company, in a more integral way.

First off, within the categories, is the Business as Usual. This company ‘type’ will emerge from the crisis looking very much like it did when it went in. For this business type hybrid working implies improvements in technology and processes, a movement with the times.

The Temporary Pivoter is a business type that has been forced to adopt a wholesale change in its business operations – often including changing what it offered to customers and clients – but is enthusiastic for a return to the office where it can work more effectively. Ultimately it will return to its original place in the market. This business will need to delve deeper in terms of what to take forward from its temporary operating model, so as to stay firmly future focused, and avoid any leaps back into the past; a move likely to throw up many hurdles. Many law firms and investment companies will recognise themselves within this category.

As Offices Reopen, Cleaning A Building Moves From 'Hygiene Theater' To A New Reality

Just a year ago, many of our offices — the ones many companies are clamoring to reopen — were filled not with employees but cleaners clad in hazmat suits that looked straight out of a medical thriller. In the early months of the coronavirus pandemic, concerned property owners, following the best advice available at the time, spent considerable sums scrubbing their offices down in what, it appears a year later, might have been a misdirected effort.

“Last year, there immediately was a knee-jerk reaction to cleaning and deep, deep sanitization, almost to the point [where] it was overcleaning and got into hygiene theater,” said Paul Scialla, CEO and founder of Delos, a firm that promotes its own building wellness standard and provides certification of a building’s health and wellness for property owners.

Updated CDC guidance has found that pandemic-era concerns about surface sanitation were overblown.

As CEO of Fort Lauderdale-based commercial real estate firm Native Realty Jaime Sturgis said, in unprecedented times, an abundance of caution was a good idea. But going forward, property managers and landlords are focusing on altering sanitation and cleaning protocols and plans to take into account updated Centers for Disease Control and Prevention guidance, which has decidedly shifted toward a focus on air quality and circulation as opposed to deep surface cleaning, and changing attitudes around the pandemic and a return to work. Sturgis said his company is cleaning more now than it did in 2019, but not as much as it did during the summer of 2020.

Is WeWork Back Up To The Same Old Tricks That Torpedoed Its First Attempt To Go Public?

WeWork's new strategy for going public is beginning to have uncomfortable echoes of the disastrous initial public offering attempt that tanked its value in 2019.

The coworking giant announced in late March its intent to merge with BowX Acquisition Corp., a special-purpose acquisition company founded and chaired by Sacramento Kings owner Vivek Ranadive. In promoting that deal to potential investors, WeWork used projections and financial calculations that reminded some of the talking points pushed by co-founder Adam Neumann that caused investors to balk at its 2019 IPO prospectus and ultimately resulted in Neumann's ouster as CEO, The Wall Street Journal reports.

In the investor call, Ranadive said WeWork could bring in $5B in annual revenue "just with their existing capacity," despite its internal projections pegging 2023 as the year when it would crack that number, the WSJ reports. WeWork's pitch also listed the company with over 850 locations and 450,000 memberships, numbers only possible when including WeWorks in China and India, which have been spun off and are not part of the entity attempting to go public.

WeWork is just one in an explosion of startups going public through SPACs, a process that comes with less regulatory scrutiny than a traditional IPO, but it still requires some financial disclosures to the Securities and Exchange Commission. Those disclosures are expected later this month from WeWork, and should they match the numbers in its investor pitch, the SEC could "push back hard," corporate finance law professor Minor Myers told the WSJ.

Landlords on the Lookout for the Right Flexible Space Partner

Landlords are increasingly looking to flex space operators to fill their vacant office space, according to a report by JLL.

While flex space operators have struggled through the pandemic, they could be in for quite a rebound once things return to normal. The combination of companies looking to downsize and save costs and workers wanting more freedom could buoy the space into the future.

While landlords want more office space, operators aren’t willing to take on new leases, according to Ben Munn, managing director of flex space at JLL. The solution could be management agreements that allow flex space operators to share revenues with landlords. Thirty percent of office space could be flexible by 2030, according to JLL.

“The shift to management agreements means the sector can grow quickly with the capital requirements spread across a greater set of partners,” Munn says. “Management agreements can also align landlords and operator incentives, creating a mutually beneficial partnership for all parties.”

Munn says this income stream, similar to hospitality structures, is variable with management agreements rather than fixed-rent leases. Landlords will absorb the cost of the fit-outs, but they will receive a more significant share of the revenue and reduce the risk of leasing to a single tenant. The flex space operator will handle daily operations.

Some landlords will look to run their own brands instead of partnering with flex space operators, JLL predicts. Other owners may look to acquire stakes in coworking firms, such as CBRE’s stake in flexible workplace provider Industrious. Finally, larger coworking operators, like IWG, may scoop up distressed smaller competitors.

Salone del Mobile to go ahead as Italian government lifts ban on trade fairs

Milan's Salone del Mobile looks set to take place in September after the Italian government announced that trade shows will be allowed to take place from 1 July.

Italian prime minister Mario Draghi and health minister Roberto Speranza announced the move on Friday as it brought forward a range of measures to ease coronavirus restrictions.

The announcement came three days after the Salone del Mobile said it was hopeful the fair could go ahead from 5 to 10 September.

Salone del Mobile set to take place in September

"The Salone del Mobile di Milano is an immeasurable asset for the entire country, and the government has confirmed that it is fully aware of this," said Salone del Mobile president Claudio Luti last week following a series of meetings with the government.

"We are therefore hopeful that the reassurances given yesterday will soon become concrete actions."

"Most importantly, this has to be a mindset shared by the companies who have to confirm their attendance at the trade fair, as a key driver of recovery in the furnishing sector, the Italian economy and society."

There had been fears that a resurgence of Covid-19 cases in Italy could mean ongoing restrictions that would prevent the fair from taking place for a second year running.

Last month, the Salone del Mobile called on the government to provide reassurances that would allow it to push ahead with preparations for the event, which was rescheduled from its regular April slot due to the pandemic.

Fuorisalone will happen on schedule

This led to a united response from organisers of the fuorisalone events that take place across the city alongside the fair.

Sixteen of the events grouped together to declare that the fringe events would go ahead regardless of whether Salone del Mobile was held.

Salone del Mobile organisers held a series of meetings with Italian government ministers last week, urging them to set out a roadmap for unlocking coronavirus restrictions.

Following the meetings, the fair expressed confidence that the government would act to allow trade fairs and public events to resume in time for September.

"Prime Minister Mario Draghi’s words last week, on the need for a recovery plan for the relaunch of trade fairs and events, were echoed by the meetings held in Rome,” said Claudio Feltrin, president of FederlegnoArredo, the Italian timber industry trade body that owns Salone del Mobile organising body Cosmit.

"This sends a very important signal from the politicians, showing that they are fully cognisant of the urgent need not just for a set date, but also for the requisite reassurances in order to organise a major event such as the Salone del Mobile di Milano within the necessary timeframes."

These architects popularized the open office. Now they say ‘the open office is dead’

Clive Wilkinson Architects championed open offices for big companies such as Google and Microsoft. Now, as the pandemic has led to a massive overhaul of work life, they envision something completely different.

As a longtime designer of office spaces for big companies such as Google, Microsoft, and the advertising firm TBWA\Chiat\Day, Los Angeles-based Clive Wilkinson Architects has helped define how offices around the world look and feel. One of its biggest innovations was a push toward the open office floor plan—the big, wallless room full of clicking and chattering desk workers that optimized the square footage of offices and democratized the workplace.

But for the actual office workers using those famous open offices, the experience has been less than ideal. They’re noisy and lack privacy, they reinforce sexist behavior, and they even make people quit their jobs.

Now, as the pandemic leads many companies to dramatically rethink how their offices function, Clive Wilkinson Architects has laid out a redesign strategy to achieve a more diverse, more multifunctional office. It starts with ditching the open floor plan.

“The open office is dead,” says Amber Wernick, an associate at Clive Wilkinson Architects. “We really see that being one of the biggest changes to come out of this pandemic and the way people are going to feel coming back into the workplace after working from home for over a year.”

Wernick and her colleague Caroline Morris have spent the past several months surveying clients and researching office design approaches to get ahead of what companies and their employees will want from office space as they gradually shift away from working at home. Based on feedback from clients in industries ranging from technology to consumer products, they’ve created a 12-piece workplace kit of parts that defines the different kinds of spaces most offices will need moving forward.

“We strongly believe that the one-size-fits-all office cannot exist in the future of work, with even stronger reasons now than there were pre-pandemic,” says Morris. “A homogenous solution doesn’t address the variety, the wide range of needs that each employee has. You end up with an incredibly flawed workplace strategy and an incredibly flawed workplace.”

These three types of spaces in the kit of parts exemplify the biggest changes coming to offices in the post-pandemic era.

Designing an Office to Counter Post-COVID Anxiety

Is it over yet?

With spring in the air and a vaccine rollout moving faster than people imagined, the end of the COVID-19 pandemic seems nigh. Certainly, there are masks to be worn and variants to track, but, despite that, the return to office life seems closer than previously imagined.

That’s good news for many employers who’ve been strategizing the return to the office for months. And it’s good news for many office employees, too, who are eager to begin charting a new normal. Though there’s also some ambivalence and anxiety, as many employees have appreciated the freedom and flexibility that working from home has allowed.

Or, more likely, it’s a mix of both. The return to in-office poses a new set of challenges for those who have been quarantining at home, after an already challenging year, said Alyssa Petersel, founder and CEO of therapist-matching platform MyWellbeing. “A lot of mental health dynamics come up when someone’s in a period of abrupt change,” Petersel said. “With returning to in-person, there are some things that will probably be really exciting for people, and there are other things that will be really intimidating.”

The feelings about the return to work are also tied up with more generalized post-COVID anxiety, and readjusting to the social and work obligations that were paused for so long, according to numerous experts. It’s the little things: wearing heels for the first time in a year, making small talk at the coffee machine, navigating the frenetic pace and social cues so common during a pre-COVID day.

And it’s the big picture: employees have created new routines tailored to their own lifestyles and on their own terms, and now they have to reset all over again.

In addition to the general anxiety about readjusting to the world as we knew it, there is also a necessary adjustment to everything that’s changed. It is likely that many employees will go back to the office before the threat of COVID is entirely eradicated, if it ever will be. So, people will continue to navigate the new and shifting restrictions, protections and social codes imposed by COVID. Only that will be extended to professional environments as well.

With that in mind, employers are considering how to welcome employees back to the office, and what kind of workplace strategy to adopt in the short and long term.

NEW Netz Offices – Mönchengladbach, Germany

bkp combined corporate design with interactive and multifunctional elements of daily needs for the offices of energy supplier, NEW Netz, located in Mönchengladbach, Germany.

The company is responsible for the supply and networking of the region and the local and the regional electricity, natural gas and drinking water distribution network. In order to also supply the employees accordingly during their daily working routine and to help them to connect with each other, bkp has developed and implemented a new Multi Space that offers interactive project- and atmospheric retreat areas as well as multifunctional workplaces.

Why my treadmill desk makes me happier and more productive

I love my home office chair—deeply. It feels like sitting in a hug.

Before 2020, I would only see it a few hours a day. The rest of the time, I'd work in co-working spaces and coffee shops, which I walk to. It kept me active.

The pandemic changed that—my chair became part of my body. I coded there, I had meetings there, I ate my meals there, I happy hour'd with friends there, and I watched Netflix there. I rocked my whiny kids there. I did everything in that chair, and my body started to feel it.

We all know that exercise plays an important role in our mental and physical well-being. As a car-less city-dweller, losing the ability to walk around and leave my tiny apartment when the world started to shut down weighed heavily on my mental and physical health. And, as a mom who now had more than one full-time job, I just didn't have time to dedicate to exercise.

So I bought a treadmill for under my standing desk. I knew I needed something to get me moving, and I needed to be able to do it while momming, working, or hanging out with friends on Zoom. I needed to get my butt out of that comfy chair and get moving.

It worked! I love this treadmill like one of my children, and I think you should buy one. Here's why, and a few tips I have for setting up your own treadmill desk. Feel free to march in place while you read.

If you're looking for a recommendation, here's the under-desk treadmill I have. I love it because it matches my desk and has some bells and whistles, but there are plenty of more affordable options out there that are also excellent.

Best of Instagram

The latest job ads from Contract.Careers

©2021 CFN.News

CFN.News - PO BOX 2551, Sarasota, FL 34230