What designers are remarkable entrepreneurs
Mette and Rolf Hay: Hay!
• It is among the new products in Hall E of the Formland Upgraded design fair in Herning, Denmark. It has four floors, four side profiles and two anthracite-colored doors. It rests so inconspicuously between the floodlit sofas and chairs that most visitors overlook it at first.
At second glance, however, New Order, as the shelving system is called, is an amazing product. The remarkable thing is not that it can be hung on the wall, expanded into a chest of drawers, supplemented with tabletops and expanded to create entire living spaces. The really extraordinary thing is its history. In order to bring New Order to Herning, people in half a dozen countries have translated the draft by German design star Stefan Diez into series furniture that is affordable even for average earners. This approach can be summarized in three letters: Hay.
Hay (pronounced: Hej) is a design brand from the Danish town of Horsens, which the married couple Rolf and Mette Hay founded twelve years ago with a partner. Today the furniture and home accessories are sold around the world in furniture stores, department stores, museum and online shops as well as 16 own brand stores. "In furniture, Hay is what the H&M sister brand COS is in fashion: a brand with high design standards at affordable prices," says designer Diez, who also works for traditional brands such as Rosenthal and Thonet. Hay causes an uproar across the industry “with products that are technically perfect, aesthetically sophisticated and at the same time a good 30 percent cheaper than those of the competition”.
Last year, the company, which itself does not publish any figures, is said to have made more than 80 million euros in sales. That corresponds roughly to the average of a single branch of the market leader Ikea, but it is quite a leap for a newcomer.
“Hay has recognized the market niche between mass producers on the one hand and design brands on the other and has consistently used it for himself,” says architect Bo Christiansen from the Copenhagen Institute for Foreign Studies.
Meanwhile, many established providers are struggling with problems. The Italian furniture industry is no longer growing, the German one even lost sales last year, although there were more new buildings to be set up in this country than it has been for a long time.
The industry is divided into two different camps. On the one hand there are high-volume manufacturers such as Hülsta and powerful retailers such as the XXXL Group, Möbel Kraft or Ikea, who typically have their furniture manufactured in large numbers by contract manufacturers around the world. That makes the products fast, cheap, but also a bit arbitrary. On the other hand, there are fine design brands such as Tecta, USM or Walter Knoll, who manufacture their manageable range in small numbers, their own factories and with high quality standards. That makes their products more expensive and more elitist than those of the mass manufacturers. Both groups spend huge amounts on marketing to sell more.
Hay managed to establish himself between the camps. Its founders have found the right elements from both worlds and reassembled them. To this day, Rolf and Mette Hay completely refrain from advertising - almost as if they didn't want to be noticed at all. Instead, they put a lot of energy - also unusual for a new brand - into the development of designs for series products that are standardized, manufactured worldwide and in large numbers. Hay has adapted the production logic of a high-volume manufacturer for his mini-brand.
Denmark's most successful designers before their start were neither entrepreneurs nor designers, but amateurs. It is precisely this fact that explains - along with a few other factors - their success.
I. Amateurs at work
Denmark is a small country with a great design history. Stars like Arne Jacobsen, Hans Wegner and Poul Kjærholm stand for a powerful tradition that saw sophisticated design as a democratic task in the 1950s and 1960s. Today it sits enthroned like a valuable but somewhat bulky heirloom in the country.
A government commission came to the conclusion in 2007 that Denmark's designers "have failed to adequately address new trends in recent years - unlike their colleagues from the USA, Japan, Germany, Great Britain and the Netherlands, who are now setting the design agenda" .
Design critic Bo Christiansen believes that, of all things, the legendary past is an obstacle: "Our legacy casts such great shadows that next to it hardly any designer has been able to grow back for a long time."
Rolf Hay is an exception because he approached the matter carefree. The 46-year-old has never attended a design or architecture school and came into contact with furniture design late. “There weren't any design icons at home,” says Hay, leaning into a sofa in the showroom. He is a tall ex-handball player and former soldier in the Royal Guard. He grew up in Horsens, a small town in Jutland, which he left like many of his friends after school and military service. While his classmates went to New Zealand or the USA to study, Hay decided on Hanover. Why Hanover of all places? “I wanted a city where I could continue to play handball. And in Hanover, a friend of our family got me a job in a shop selling Danish pine wood furniture. ”At that time, Hay had no idea about furniture, but he had enough sales talent.
Years later, when he had already switched from the pine shop to the Danish design label Gubi, he discovered the “Ant” chair at a furniture fair. The seating furniture with the characteristic backrest is a design by Arne Jacobsen and a classic. Hay liked him immediately. He assumed it was a fair novelty.
That would not have happened to his wife Mette today. She grew up in her parents' furniture business, so she got in touch with the Danish design tradition. At Gubi, where she and Rolf met, she worked as an assistant to the management. Just like her husband, the 36-year-old has neither learned a trade nor studied design. Today, as Hays creative director for textiles and accessories, she controls a multi-million dollar business, while her husband heads the four-person in-house design team and a team of external designers who supply the company with furniture designs. The two are united by a healthy mixture of naivety and natural talent.
What sets the Hays apart is their “extremely positive, youthful recklessness. They make things easy that they instinctively know to be right, ”says Stefan Diez. This carelessness distinguishes them from the managers of many traditional furniture brands. “The industry is in a crisis and stuck between the generations, whereby the young do not manage to translate the values of the old into the present. Many German furniture brands are still producing for a middle class that no longer exists, and in this way are slowly dying to themselves. "
The Hays, on the other hand, took a very pragmatic approach from the start. Even designers have to accept that their products have to bring in money, says Rolf Hay. “After all, that's what we learned from the financial crisis: In order to survive, things have to be profitable.” Motto: beautiful design is good, good sales are better.
For Rolf Hay it was only a small step from this realization to his idea: a design brand that one should not only covet, but whose products one should also be able to afford.
II. The man at her side
At the beginning of the millennium he met a man who not only had similar ideas, but above all had the means to implement them.
Troels Holch Povlsen is a big businessman and one of the richest men in Denmark. His bestseller textile group has more than 15,000 employees and brands such as Vero Moda and Jack & Jones and an annual turnover of 2.6 billion euros. Povlsen, whom Hay got to know through a project for Gubi, brought with him exactly the experience in building and developing a company that the Hays completely lacked. In 2002 the three founded Hay together. Start-up capital: 500,000 euros. The first product: a series of chairs with which the canteen of Povlsen's bestselling group in Horsens, Jutland, was furnished.
“Troels first showed us how to create a business,” says Mette Hay. "He's not afraid of taking risky steps and has a very unconventional way of seeing things." When expensive inventory began to pile up in the warehouse in the early years, the Hays suggested to their partner that they hire a manager who would better organize the flow of goods and should ensure that in future no more would be produced and delivered than could be sold. According to Mette Hay's memory, Povlsen is said to have briefly pondered her proposal. Interesting thought, he replied. "But have you ever thought about hiring more salespeople to sell these supplies instead of a warehouse manager who better organizes our supplies?" And that's exactly how it was done.
The Hays remain silent about the details of their partnership with Povlsen. The CEO himself cannot be reached for interviews. If you believe Rolf Hay, then apart from his participation in the share capital, Povlsen has not invested a cent in the joint venture. What is known, however, is that the Horsens Hay administration is housed in a former customs building that is said to belong to the Povlsens group of companies. In addition, firms of the industrialist for Hay handle bookkeeping and logistics. Rolf Hay does not want to reveal whether and how these services are offset between the partners.
One thing is certain: Hay takes care of the design, product development and global sales with just 150 employees. And without Povlsen's global contacts and experience, the brand would hardly have reached the global size that has made it stand out.
III. the price is hot
In the early days, Rolf Hay designed many products himself. Later, designs by experienced designers such as the Bouroullec brothers and the Dutch duo Scholten & Baijings were added, but what Hays won for a design was never the name of its designer, it was the question of whether the design was compatible with their philosophy. “Let's be honest, is a customer interested in whether the armchair is from a star designer? It has to be comfortable, well made and affordable, ”says Rolf Hay.
However, “affordable” is a relative term. A box of matches at Hay costs four euros, a metal lunch box 30 euros. Chairs are between 100 and 600 euros. “We're not cheap,” admits the founder, “Ikea is cheap. We make design at an affordable price. "
Just like the price, the design of Hay products is somewhere in the middle between mass (useful, cheap, interchangeable) and elite (big name and usually big price). They are everyday objects that are both practical and unmistakable in a subtle way. A typical piece of furniture is the "Don't Leave Me" side table by designer Thomas Benzten, with an angled handle protruding from the top, making the table easy to move around. Does a table need a handle? Of course not - but it perfectly embodies the typical Hay mix of functionality and humor. And more and more customers around the world are liking this mix.
20 years ago, recalls Rolf Hay, it was completely different. At that time, even in Germany, tastes were still very different: in the north people tended to be Scandinavian and with light pine, in the south with teak and dark oak. “Today our customers in São Paulo have more or less the same preferences as those in Shanghai or Stockholm. That means: In principle, we could sell anywhere in the world. ”Unlike their competitors, the Hays do not rely on advertising, but only on the power of their products.
IV. Low budget & high tech
“We didn't have a lot of money in the beginning, so we just had to set priorities,” says Rolf Hay. “For us that meant: no time-consuming administration. No unnecessary expenses. No advertising. ”During the important Milan furniture fair, the 13-strong fair crew occasionally crowded into four-person apartments. Instead of prosecco or champagne, their booth offered beer sponsored by Carlsberg.
Instead of extensive marketing, the founders invested in the development and manufacture of products such as New Order, the shelving system by designer Stefan Diez.
Originally, Diez presented his idea to the British label Established & Sons. For almost a year, the British and the German had worked together on the product and manufacturing details until it became obvious: it wasn't working. Because Established & Sons would have had the system produced, as usual, in small series by a German manufacturer. "A single basic element would have cost around 400 euros and a simple new order shelf would have cost more than 2000 euros," says Diez, "nobody would have paid for that."
Stefan Diez is a trained carpenter, he comes from a craftsman's household and knows that the right preparation of an order is often half the profit. Normally, he says, that is why he is always the one in development processes who annoys the other participants with his-there-is-something-going-ahead.
It was different with the Hays. They came across the prototypes for New Order during a visit to Diez’s Munich studio and decided to try their hand at implementing the design in their own way. That turned out to be more tedious than the designer had thought. "Whenever I thought we had the ultimate solution, Rolf questioned everything again." Diez thought that was good. Because the shelving system, which was presented for the first time at the Formland trade fair, is now an industrial product that can be manufactured at high speed, in large quantities and therefore extremely efficiently. It has as little to do with a designer piece of furniture from a factory production as a Toyota Prius has to do with a Lotus, also in terms of costs.
All in all, New Orders' price is now roughly half what Established & Sons should have asked for. For this, the shelf is a global construct. Its aluminum die-cast parts come from China, the wooden panels from Jutland, and the material for the foil hinges comes from Germany.
The search for a capable manufacturer for the plastic hinges alone took months, and the joint development took another two years, says Diez. However, he thinks it is great when a brand uses the possibilities of globalization instead of seeing it as a threat.
Such a global network naturally harbors considerable risks. One is the production conditions at suppliers and sub-suppliers, which even our own employees in Turkey, China and India cannot completely control. Another is the fact that a global value chain is naturally dependent on growth. Because an industrial production machine with high development and tool costs only runs smoothly as long as it is fully utilized. Only large numbers justify the huge investments in development and toolmaking by producers, designers and the company itself. If demand stagnates, the machine will stutter.
Their functioning therefore depends crucially on how precisely Mette and Rolf Hay anticipate the preferences of their customers.
At the moment, however, everything seems to be working out happily in Hays' world: a clientele who yearns for affordable design all over the world. Associate designers who design exactly these products for the company. A global network of tried and tested manufacturers who convert designs into inexpensive and therefore easy-to-sell products. Growing sales, which makes producers, designers and retailers equally happy.
If this continues, there will be even lower manufacturing costs, higher margins, more attractive prices or a combination of all three factors. For now, at least, it seems like the Hays have defined a perfect growth formula for themselves.
The only question is: where will this formula lead it?
It has been around three years since Troels Holch Povlsen asked a question at a meeting of the Hay owners that left Rolf Hay speechless for a few seconds. It was a question that fundamentally changed the course of the company. It led Hays to outsource accounting, warehousing and logistics in order to be able to concentrate exclusively on design and development.
The question Povlsen asked them that day was: “Do you want Hay to become a really big company one day? Do you really want that? "Rolf Hay says he had to think about the question for a moment. One look at his wife told him that she was thinking the same thing as him. "Size was never our goal," he explained to his business partner, "but since you ask us about it and you can dream, my answer is: Yes, please." ---
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