HOLLAND — Furniture manufacturer Haworth Inc.’s global sales reached a record $2.5 billion in 2022, driven in part by new products designed to help employers bring people back to the office and accommodate hybrid and remote work models.
The sales volume for the year grew 27.5 percent from 2021’s $1.96 billion and surpassed the prior, pre-pandemic record of $2.25 billion that the closely-held Haworth recorded in 2019. Last year’s sales growth came across all business segments, with office, home and hospitality among them.
CEO Franco Bianchi said the results for Holland-based Haworth capped “certainly a very good year” and came despite the difficulties and challenges in areas such as supply chains, labor and transportation, as well as economic uncertainty.
“But overall, it was a very good year,” Haworth CEO Franco Bianchi told MiBiz in an interview today. “It was just at times a little more painful than I would have liked. This is where the heart of your team comes out, the cohesiveness, the clarity of your strategy, the leadership of your team at all levels.”
As Haworth “doubled-down on our innovation strategy,” the company launched new products over the last 18 months to accommodate work trends that took hold and accelerated in the pandemic, contributing to sales growth last year.
“In this moment in 2022, when many of our clients were challenged by, ‘How do I bring my people back to the office, how (does) this space need to look,’ and ‘I have not spent any money on space, but now I’m ready to,’ the brands and the teams and our dealers were ready to intersect a lot of those questions, a lot of those challenges and a lot of those demands,” Bianchi said. “(They were) able to realize many of those spaces, but with our historical products and a lot of the new products that we launched, and I think that made a big difference.”
Recent product introductions include the Echo flexible workspace with height-adjustable tables, the Pergola architectural product that creates workspaces and “is designed in a very human and very residential feel,” and the Zody II and Zody LX ergonomic chairs.
“In the last 18 months, our pipeline (of new products) probably has never been more full,” Bianchi said.
As industry trends continue, Bianchi expects Haworth to record further growth in 2023, although likely not at the 2022 growth rate as the U.S. economy slows and perhaps dips into a mild recession later in the year. A lot of the 2023 growth will “continue to build on the same tenets that made 2022 very strong,” although “we will have winds in our face” that will affect the company’s growth drivers, he said.
“Tremendous changes that are happening in the world of work are going to continue, and being there will assure another year of growth,” even in a “more cautious” economic environment, Bianchi said. “I don’t expect the same growth that we had in 2022, but expect growth. I’m convinced it’s going to be a good year because I believe a lot of the reasons we grew in ’22 are going to be right there, and maybe even more urgent.”
Haworth’s 2022 results reflect how West Michigan-based contract furniture makers have gained sales as employers adjust to hybrid and remote work models that took hold in the pandemic, although that momentum appears to be waning.
In a consensus estimate posted on Yahoo Finance, analysts expect Zeeland-based MillerKnoll Inc. (Nasdaq: MLKN) next month to report $989 million in sales for the quarter that ends this month, a 3-percent decline from a year ago.
Meanwhile, brokerage analysts expect Grand Rapids-based Steelcase Inc. (NYSE: SCS) to report flat quarterly sales of $753.3 million, according to a consensus estimate. Steelcase in December reported $826.9 million in sales for the third quarter of its 2023 fiscal year, a 12-percent increase from a year earlier.
CEO Sara Armbruster told analysts that even with the quarterly sales growth, “corporate clients have slowed investment in office space as they face a potential recession and economic uncertainty in many parts of the world, and this has caused our demand levels to soften.”
“We believe demand will improve from current levels as recessionary concerns weighing on CEO confidence abate and more customers decide to invest in their offices to support hybrid work strategies,” Armbruster said at the time. “Because it’s clear that a more flexible model of work is here to stay, it’s wise for us to imagine a contract office furniture market in which customers may invest less in office space and invest in that space differently than prior to the pandemic.”
MillerKnoll reported just before the Christmas holiday that sales in the second quarter of its 2023 fiscal year reached $1 billion, while the rate of growth eased to 4 percent. Pandemic-related demand in the same quarter a year earlier made year-to-year comparisons difficult, according to executives, who noted MillerKnoll’s quarterly order rate declined 7 percent.
Sales for the first six months of the fiscal year increased 18.2 percent from a year earlier to $2.1 billion.
Executives at the time projected MillerKnoll’s sales at $980 million to $1.02 billion, essentially flat or 3.9-percent decline, for the present three-month period that ends next week.
Echoing sentiments from competitor Steelcase, MillerKnoll CEO Andi Owen told analysts that “uncertain macroeconomic conditions pressured order levels for the quarter and we saw customers take longer to make decisions and also take on smaller return to office projects.”
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EDITOR’S NOTE: This story has been updated from a previous version to include an outlook on the sales performance from MillerKnoll and Steelcase.
