Freedonia Analyst Weighs In On Herman Miller’s acquisition of Knoll

Herman Miller Incorporated, one of the leading furniture manufacturers in the US, announced last week that it planned to purchase Knoll Incorporated, another key producer of home and office furniture. The transaction, which is expected to close in the third quarter of 2021, will create a firm with over $3.5 billion in annual sales, nearly 20 North American manufacturing facilities, and a global network of more than 100 showrooms and retail centers.

According to Freedonia Group industry analyst Matt Zielenski, “The US furniture market is in a state of flux due to the COVID-19 pandemic. While workers are expected to return to the office, it is generally believed that there will be fewer workers in offices and companies are expected to reduce their office footprints. This is expected to exert negative pressures on the office furniture market. However, there will be opportunities for the rapidly growing home office segment as employees re-create work stations in their residences. Furthermore, many Americans will continue to refurnish their homes, such as by buying new furniture.”

Thus, stated Zielenski, “The union of two of the largest US home and office furniture manufacturers will create a company that is uniquely positioned to capitalize on the ongoing evolution in the US furniture market. Herman Miller will be able to expand its manufacturing and distribution footprint, boost its design capabilities by integrating Knoll’s development staff into its own team, and expand its collection of brand names. Also, the combined company will able to achieve efficiencies in sourcing raw materials – a key consideration when shortages of lumber and polyurethane foam are causing disruptions in production and rapid price increases.”

Freedonia Focus Reports analyst Owen Stuart adds “Prior to the pandemic, most of the big office furniture manufacturers had only tentatively invested in direct-to-consumer (DTC) e-commerce as a selling channel – they relied on distributors instead. However, Knoll has been an early adopter of DTC e-commerce sales of office furniture, which placed the company in position to benefit from the sudden shift to e-commerce office furniture purchasing by employees working from home. Herman Miller’s acquisition enables them to remove a competitor from the market while acquiring a strong e-commerce office furniture business.”

For more information on the outlook for furniture – see the following Focus Reports from The Freedonia Group:

Furniture: United States

Household Furniture: United States

Office Furniture:  United States