Jeff Chu Shines Light on Design Within Reach’s Modern Mess

Times are tough for Design Within Reach, the ten-year-old retail startup turned publicly traded lifestyle emporium. According to the company’s most recent regulatory filings, quarterly net sales (for the period ending July 4) plummeted 35% compared to the previous year. In the first half of 2009, the company’s net loss totaled just over $13 million, approaching the annual net loss ($14.3 million) DWR reported for 2008. Over the summer, DWR voluntarily delisted from the Nasdaq and sold a 92% ownership stake to a hedge fund, which recently ousted CEO Ray Brunner. Meanwhile, DWR’s early commitment to “fully licensed” reproductions has been supplanted by a growing collection of blatant ripoffs, which are raising legal hackles. So, how did DWR’s reach exceed its grasp? What went wrong? Can DWR Tools for Living, the new 700-product line of covetable accessories, save the company? Writer Jeff Chu lifts the Alexander Girard-patterned curtain in a fascinating look at “The Rise of Fall of Design Within Reach,” published in the December/January issue of Fast Company. We asked Chu for a little backstory on the backstory.

What was the most surprising thing you learned in the course of reporting this story?
I think the most surprising thing was that [former CEO] Ray Brunner had a chair signed by Anna Nicole Smith in his office. It was kind of gauche and amazing at the same time. I tried to think of a bigger significance—modernism was for the masses, right?—but ultimately it was just that he had a chair signed by Anna Nicole Smith in his office. No more, no less.

More seriously, I think the most surprising thing to me was that Ray did not keep his board fully informed. I was really surprised that two of the board members told me that they had no idea they were being sued. Especially in a time when regulatory pressures are so significant, it just seemed weird that he would decide he didn’t have to tell the board. You’d think he’d err on the side of caution and just tell them everything—better to have that cover, right?

Why do you think DWR (and particularly its stores) inspires such…well, strong feelings in people?
One of the reasons DWR inspires such strong feelings in people is because of the confusion caused by their name. They’ve never been about pricing things within reach, but that’s what we all think about—and then of course we’re outraged when we see that the chair we want costs almost as much as than the New York apartment you want to put it in. For people in the design community—and especially for the people I interviewed for this story—the passion was driven largely by what they believe the company was built on. The problem with the knockoffs for many of them was not inherently that DWR is doing knockoffs—you see knockoffs all over the place, and there needs to be more discussion about that—but that there was this great hypocrisy: The company was built on the designers’ names and stories and reputations, and on this righteous platform of educating us about them. Then it replicates their pieces and sells them for the original price. One could say that’s a bit rich.

How did DWR move from licensing to plagiarizing?
It’s not hard to understand why the company did it: Margins and the pressure of Wall Street. I suspect it was more the subtle pressure of going public than anything else. A lot of people feel that the company grew too much, too quickly, and that it wasn’t mature enough to go public when it did, but at that time, everyone wanted to. But Wall Street wants growth. It’s pretty insatiable: It wants year-over-year improvements on your balance sheet, on your margins, on your everything. Maybe a company like DWR should never have gone public. It can be a steady business and a good business, but maybe it’s not a Street-suitable business, because at its best, it probably can’t deliver that kind of growth. Maybe it’s the kind of business that, say, a rich, passionate, design-loving couple should own—sort of an upscale and sophisticated Mom-and-Pop furniture shop.

Any predictions for the future of DWR?
I’m not in the predictioneer’s game. It’s dangerous, and there’s far more risk of looking foolish than anything else. I will say that I hope the company is still around when and if I can eventually afford the Jens Risom rocker that I have been coveting since I saw it. The thing is beautiful. And DWR is dangerous, because it makes me want things that I will never ever ever need.