Haworth founder G.W. Haworth and his son, Richard Haworth, break ground on their headquarters. The business started in G.W.’s garage and moved into a few existing facilities in Holland, Michigan.
Franco Biachi had never gone so fast in his life. Strapped into the passenger seat of a luxury Ferrari sportscar, the Bologna-born executive marveled as the professional driver deftly maneuvered the vehicle around curves at 200 miles per hour. It was the spring of 2015, and Biachi, who’d recently landed Ferrari as a client, was one of the lucky few to visit Ferrari’s private Fiorano Circuit, roughly 80 miles north of Florence.
“Creating a brand is really the work of decades,” he says of the Italian opulent automaker.
As the CEO of 73-year-old office furniture company Haworth, he should know. With his slicked-back hair and heavy Italian accent, Biachi, 57, was tapped by one of Michigan’s wealthiest families to do just that—build on an established brand. And thanks to a recent acquisition, Biachi now counts the storied Ferrari as one of his clients.
The private, billionaire family-owned, Holland, Michigan-based company rose to fame in the late 1970s after inventing the modern cubicle. But for the past six years, Biachi has been quietly diversifying, creating furniture and interiors used inside and outside the office.
It’s a move that’s paid off during the pandemic. As offices shuttered around the world and the office furniture industry floundered, Haworth stayed afloat by producing products for residential customers, as well as car and yacht companies, universities, hotels and restaurants, among others. Now, Biachi is helping longtime Haworth clients—like Capital One, Shell and Marriott—safely return to work with futuristic office solutions.
Industry-wide, orders were down roughly 30% during the majority of 2020, says Steven Ramsey, a senior equity analyst at Thompson Research Group. But Biachi says Haworth sales were down just 15%, and revenue reached nearly $1.9 billion. The office furniture for which Haworth is renowned still makes up a majority (65%) of sales.
“I think we have become a better company, more thoughtful, more aware—just smarter—because we have acquired all these different facets of design of environment,” Biachi says. “You pick an environment and we have developed expertise and products. Sometimes that environment is a car interior, sometimes that environment is a yacht interior, sometimes that environment is an office, sometimes that environment is a lobby of a hotel.”
Haworth’s story began in 1948, when G.W. Haworth decided to start a woodshop business. A public-school shop teacher, he was low on cash, and unable to secure a bank loan, his parents lent him $10,000 from their life savings. After dabbling in tie racks and shoe displays, he landed on office furniture, operating under the name Modern Partitions.
The business, however, didn’t see widespread success until 1976 when, fresh from a stint in the Army, Haworth’s son, Richard, took over the company (now called Haworth) with an idea that would rock the office furniture industry. Improving on the cubicle concept introduced a few years earlier by competitor Herman Miller, he invented a version with electrical wiring inside the panels. This allowed companies to construct their own cubicles by simply snapping panels together and without having to hire electricians to rewire workspaces. The year it was released, Haworth's sales grew by more than 40%.
“Right as that comes out in the 1976 timeframe, the PC comes out from IBM and Apple and they need even more power, so it's perfect timing,” says Matthew Haworth, 52, who owns the company along with his family and serves as chairman. “We just grew like a weed.”
Soon after, the company went global, ultimately acquiring more than 30 businesses in Europe and North America and expanding its dealer network in Asia.
Biachi joined the company in 1992. After his boutique mergers and acquisitions company facilitated the sale of an Italian furniture company to Haworth, he was asked to stay on and lead Haworth’s European expansion. A decade later, he was appointed vice president of finances and moved to Michigan, and in 2005, he became the second non-family member to lead the company as CEO.
“Think about where you spend your 24 hours. Could we one day own and have the ability to design many of the places where you're going to spend your day?” Haworth CEO Franco Biachi says. “That’s the framework that I use.”
He’s met his share of cultural challenges. Case in point: He unwittingly became the subject of hate mail after his first interview with American architecture and design publication Metropolis Magazine, in which he was quoted as saying macaroni and cheese was “not a civil food.”
All that was quickly forgiven when Biachi laid out his master plan for the company. In a world where consumers can order an office chair in seconds on Amazon, Biachi knew he needed to find a way to stand out. Gone were the days when Steelcase, with $3.7 billion in revenue last year, and Herman Miller, with $2.5 billion in revenue as of May 2020, were Haworth’s only competitors.
So he diversified, applying Haworth’s classic office furniture construction to other, more luxurious interiors. A 2014 acquisition of Italian furniture-maker Poltrona Frau for $270 million allowed Haworth to produce Ferrari car interiors and Ferretti yacht furnishings, as well as control of Italian designer furniture producers Cassina and Cappellini. Two years later, it acquired luxury Los Angeles outdoor furniture maker Janus et Cie. Today, 30% of Haworth’s sales are in lifestyle design.
Biachi also led the development of a software startup. Called Bluescape, the Haworth-owned virtual collaboration platform launched in 2013, long before employers would find themselves dependent on video conferencing software. His foresight has paid off: Users have increased by 1,400% since the start of the pandemic, and the software now makes up 5% of Haworth’s business. It’s just one of the solutions it’s been hawking in anticipation of the post-pandemic return to work.
Late last year, Biachi announced the creation of Pergola, a massive, makeshift office space that can be set up inside and outside, enclosed or open for privacy and safety. Though the product was in development before the pandemic began, Biachi calls it the perfect return to work solution.
Haworth has also been promoting a variety of plastic and glass separation screens, which can enclose desks and workstations and are made from easily disinfected materials, as well as freestanding “BuzziSpace” screens that can display directions to direct office traffic patterns and aid in social distancing.
But won’t this all be irrelevant once the majority of the population is vaccinated and ready to return to the workplace? Analyst Ramsey doesn’t think so. “I think companies will want to be cautious and spend reasonably to help their employees feel safe,” he says. “A big trend in offices in the past five-plus years is these more open formats.”
The office furniture industry always stands to benefit from the emergence of new workplace trends, as employers will spend to keep pace. “The question mark is when will demand come back and how fast will it come back,” Ramsey says. “But I do think it's a question of when, not if.”
Biachi agrees. “Humans are social creatures,” he says. “I'm an optimist that the office will always be there.”