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Jerry Cohen Law and the Business of Furniture blog.

What "Be Your Own Decorator" Shows About Challenges to Furniture Businesses

September 27, 2013

Recently, someone at my firm visited the store West Elm. "Be your own decorator," a sign said. It invited customers to mix and match colors themselves, and build the look of their dreams.

Judging by my conversations with clients and friends in the furniture business, you probably read that with mixed feelings. On the one hand, it's great that everyday shoppers are so interested in decorating their homes. But on the other, mass-appeal d├ęcor and furniture has made it harder for many businesses to compete.

The rules have changed. Artistic designs can now be replicated easily and produced overseas cheaply, and delivered to stores where they are available far below what their original versions are worth. Many businesspeople believe that globalization and competition had a role in the fate of Furniture Brands International, which filed for Chapter 11 bankruptcy on September 9 and has an uncertain future ahead despite owning storied, generations-old brands and businesses.

Now, you might be reading this and asking, "What does this have to do with law?" In fact, everything.

The sea changes in the furniture business mean huge changes in business relationships. The business climate is more challenging and more uncertain. Relationships are ruled by more than handshakes. They're governed by obligations and expectations written into contracts. Agreements are easier to make when a way of doing business is more established. But when an event such as the bankruptcy filing puts so much in question, that means it's time for everyone to look at the relationships they have with other businesses in the industry.

There's a saying, "Hope for the best, but plan for the worst." That guidance is worth keeping in mind. Businesses need to make sure they are protected against the most disruptive impacts of changing conditions. In our industry, this means products that become unavailable even when customers are asking for them. It means that an order you placed, paying a substantial amount up front, can no longer be fulfilled. It means that a longtime business partner, affected by a more uncertain environment, has to change its terms of dealing with you even though you've done your part to honor all your obligations. These are the kinds of things we are seeing in the ecosystem around Furniture Brands International.

But here's what else is clear. Great design, diligent craftsmanship, and honorable business practices are all here to stay. Of course, challenges and adjustments are ahead. But if you look at every other consumer business, there is always a place for great products. The products you make are going into people's homes. Quality matters and I think it always will.

So as the furniture business continues to watch what happens, it's time also to step back, take stock of all your business relationships, and think about your own goals over the long term. The furniture business has tradition like no other, and like the products so many of you make, it's built to last. But make sure the relationships you have in place are suited to the challenges and realities of today.

What kinds of uncertainties are you navigating? Where do you think the industry is going? Comment below, or email me at jcohen@ctswlaw.com.

This blog is intended to provide basic and useful information but not legal advice. As legal advice must be tailored to the specific circumstances of each case, and laws are constantly changing, nothing provided in this blog should be used as a substitute for the advice of competent counsel. We recommend you consult a lawyer to ensure that the information provided, and your interpretation of it, is applicable to your particular situation.