No Sitting Still: Rearranging the office furniture market.

• Author: Newman, Amy
• Position: RETAIL

Depending on the source, annual revenue for the United States' commercial furniture market was between $12.3 billion and $12.94 billion in 2020. Given the swift transition offices made to remote work when the COVID-19 pandemic sent the country into lockdown in March 2020, those figures might seem counterintuitive. The logical assumption was that COVID-19 would spell disaster for office furnishings.

It didn't, and no one is more surprised than John Rafferty, COO of Capital Office in Juneau.

"Going back to when COVID had just hit and everybody goes into lockdown, you would have thought it wasn't the best time to be in the commercial furniture business," he says. "But Capital Office has been in business for seventy-five years, and I would say the last two years were our top five in terms of sales revenue."

Market research indicates that much of the COVID-era boom is the result of companies taking advantage of empty offices to revamp their space and the need to furnish home offices. The need is still growing, with annual commercial furniture sales in the United States forecast to increase $3.14 billion by 2025. That optimism is driving mergers and acguisitions at the national level, which create opportunities at the local level.

"A lot of what you're seeing and hearing in the local market is really just driven by the overall industry, and that's just trickling down to the local dealers," Rafferty says.

From the Islands to the Mountains

Honolulu-based SystemCenter, which has clients in Hawaii, the Lower 48, Guam, Japan, and South Korea, is a family-owned business that has provided commercial furniture, industrial storage, and architectural interior design to commercial, education, government, and healthcare entities since 1976.

SystemCenter entered the Alaska market four years ago, serving as the exclusive distributor of the Haworth furniture line to federal government and military agencies, says Jack McCann, director of SystemCenter's Alaska market.

Outside of those customers, Alaska's exclusive distributor of Haworth was AA-K Business Environments, Inc., McCann says. When AA-K's owner began to downsize in anticipation of retirement, SystemCenter's long-standing partnership with Haworth, ranked the world's fourth-largest commercial furniture manufacturer in 2020, gave them an immediate advantage in assuming the reins from AA-K.

"Haworth started thinking about succession, and because we already had a presence in Alaska and we were already a...