On The Hunt For Better Margins, Fab Debuts Hem, A New Furnishings And Design Brand

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A Drone Over PragueCrunch

Just two weeks after Fab.com announced the acquisition of One Nordic – a Helsinki, Finland-based maker of furniture, lights and other home deco products — the online design store is moving swiftly to the next stage of its new strategy to focus more on original goods: it’s launching Hem, a new line of customizable, “affordable” furniture and products, designed in-house and also by third parties.

As part of the new launch, it looks like Fab will dropping the “Fab Europe” name, or at least de-emphasizing it a lot more going forward. “One Nordic, MassivKonzept and Fab Europe will all fold into Hem,” a spokesperson tells me.

MassivKonzept is the German retailer that Fab acquired a year ago, just ahead of a massive funding round, to kick off its move into original products and physical stores (specifically in Germany, where a spokesperson tells me there will be three in operation).

Part of Fab’s challenge up to now has been that of all e-commerce companies based around physical goods: building out an operation that balances keeping stock of a range of products, and then selling and shipping them in a timely way, all while maintaining decent margins.

In a business that is driven on economies of scale — and hard competition from other and bigger players ready to compete on those margins (from Amazon and eBay through to Rocket Internet outfits and more rivals appearing every day) — that’s proven to be a challenge for the company.

“We are creating a new kind of home company that delivers more of what people want—good design, easy assembly, customization, affordable prices and multi-point shopping opportunities—and less of what they don’t—commoditized style, lengthy ship times, and inflexible shopping experience,” explained Jason Goldberg, Fab’s CEO, in a statement.

While a lot of Fab’s furniture efforts have been focused on Europe up to now, the company now is going to see if the same model will work elsewhere. Hem, Fab says, will be sold in 30 markets worldwide. Unlike its European business, which has now whittled down to selling only furniture, Fab says it will continue to sell in the U.S. “a whimsical, unique and colorful assortment of products people know and love.”

Hem is taking early sign-ups now, and plans to open its doors for business in September, the company says. The company said that some 20,000 people had already signed up as of yesterday.

Judging by the teasers that Hem — Swedish for “home” (how Euro!) — is placing on its new Instagram account, it looks like the new brand will be the vehicle for a lot of the products that One Nordic has already been producing for a while now (from metallic lampshades to the bent wood “Bento” tables and chairs), plus some new additions. In all there will be about 300 products in the Hem selection, the company tells me.