Like everyone associated with the real estate industry, interior designers and kitchen and bath designers have been scrambling to play defense as the market has slowed and consumers rethink their profligacy. But how an interior design firm is faring depends on what it does and for whom it’s doing it. If you’re Jennifer Gilmer, a certified kitchen and bath designer in the tony enclave of Chevy Chase, Md., a suburb of Washington, D.C., things are holding steady—not pre-recession times but certainly not the apocalypse.
“We did feel the pinch all of last year; business was down about 30%,” says the principal of Jennifer Gilmer Kitchen & Bath. “As of the first of this year, we’re having a normal run of business. I think people waited, and, what we’re experiencing now is ‘pent up’ demand. People were waiting to feel more comfortable with the economic situation before going forward.”
By "people," of course, Gilmer means ordinary consumers, because she did not exactly seek out work from home builders. “Companies that build tract homes have their own account with a cabinet company and usually have the architect design the typical plans for a specific model,” she says. “They then buy the cabinets from a cabinet company directly, so, there is no need for our services or our products. It’s kind of a shame since they would benefit greatly by standing out from their competitors if they would take the time to consult with us.”
Gilmer does mid- to high-end projects, remodeling work, but “hardly any new homes,” she says, so her market has stabilized. But for interior designers who provide home builder services such as model home merchandising, space planning, clubhouses and sales centers, or selecting finishes, times are tough.
For Creative Design Consultants (CDC), an international design firm in Costa Mesa, Calif., it has meant the company has had to shift its focus. “It’s varied over the years, but on average about 60% to 70% of our work has been with home builders,” says Sarah E. Breen, director of marketing for the firm. CDC, Breen says, used to do interior design for sales offices, model homes and community clubhouses and recreation centers, but now the current state of the housing industry has hurt the company. How much? “Dramatically,” she says.
CDC is not alone. Such stories are common among interior designers who worked heavily with builders. Linda Meluski, owner and principal of Designs For You in Toms River, N.J., says her work has all but dried up.
“I used to do a lot of work with builders and developers, ranging from making the product selections to put in the models to designing story boards based on the target markets,” Meluski explains. “My last job with a builder was almost three years ago. I’m not getting calls or emails to even bid on proposals.”
Home Building 360: Dealing With The Downturn
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Several companies are already looking beyond new-home construction for growth.
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Subs find they must lay off workers and take up other trades to make ends meet.
Meluski, who started her company 25 years ago doing private residences and kitchen and bath remodels, started doing model home merchandising about 10 years ago. Things were very competitive, she says, but times were good. Her client list included such companies as Colony Development, Continental Properties, MG New Homes, Paramount Homes, and Regal Homes. Though times have slowed, at least she is still in business.
Some unfortunate companies have suffered the ultimate fate: closure.
For almost 40 years, Color Design Art (CDA) in Culver City, Calif., was one of the leading model home merchandising firms in the country, winning awards by buckets and winning commissions from some of the largest home builders. But the company is longer in business. “We had been in business for 39 years, initially with a broad-based practice, but over the years we became specialized, serving the residential builder/developer community exclusively,” says Don Anderson, the former president of CDA and now the owner of A Studio LA in Los Angeles.
In the early 2000s, CDA was so successful that the company was able to pick and chose from the abundance of work on its table. “The work we turned down was usually lower-priced secondary location product,” Anderson says. “Our primary focus evolved to specialize in offering superb design and service for the luxury and near-luxury market. A market defined by excess, demanding very complex finishes and details.”
But as early as 2007, the company felt the shift in the market “and by late 2008, things started to look dire indeed,” Anderson says. “Our builder clients at that time were doing less than 20% of their normal volume. Further, budgets were shrinking, dollars were paramount. The writing was on the wall, the desire for quality was taking a back seat to affordability. This was completely understandable under the circumstances, but it meant that our market niche had become a heavy anchor weighing us down.”
Firms hoping to avoid a similar outcome have been reaching into new markets during the slump. CDC, for example, is looking elsewhere for work. “We began to do work overseas as the home building business started to decline and also relied on our multifamily rental clients for new projects,” Breen explains. “Our firm went through layoffs over a two-year period, shrinking by about 60% of our original size.”
Meluski is eyeing other services that appeal to builders as well as consumers, such as home staging, room layouts, and moving services for those who are selling their homes. “We do evaluations of the homes, give sellers a list of things to do to get the home ready, and offer a three-tier service if they want to proceed with executing the ideas,” she explains.
For Gilmer, it’s business as usual. “We haven’t found the need to drum up business,” she says. “I’ve been putting an ad in a local design magazine for the last 10 years, and, we just continue to do that. We also continue to photo-shoot our best work and send the pictures out to national and local magazines in an effort to get more editorial [coverage]. That works very well for us also.”
But between the slow pace of housing construction and the economic recovery, interior designers may have to dig in for the long haul: many builders simply aren't calling on their expertise. “From where I sit, on the sidelines mostly, it feels as though conditions are as pretty much as anticipated,” Anderson says. “That is, still a very marginal volume of new construction, along with extensive re-use of architecture and interiors. Even most new product comes with marginal architecture and merchandising budgets.”
Nigel Maynard is senior editor, products, at BUILDER magazine.
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