Earlier this month Re/code reported that designer portal Fab was eyeing up a European furnishings site to move further into the area of building its own stock and away from reselling others’, and today comes news that the deal has closed: it’s buying One Nordic Furniture, based out of Helsinki, Finland, for an eight-figure price.
The company is known in some Northern circles apparently as “the luxury Ikea.”
We had actually heard in the past week that One Nordic was the company Fab was looking to buy, and while trying to nail down a second source, and it looks like the deal closed — just “minutes ago,” according to a spokesperson (note to self: maybe second sources are overrated?). The exact price is unknown except that it is in the “tens of millions of dollars.” As part of the deal, One Nordic will become a 5% shareholder in Fab.
To date, Fab has raised $336.3 million with a valuation in its last big round of around $1 billion, but the company has been stumbling in its business model and has even faced speculation that it is close to shutting up shop completely this year (which it has denied). That has led it to look for opportunities that take it away from reselling other company’s products and handling the expense, complications and related logistics associated with that.
In Europe, that shift has led Fab to selling its own products.
One Nordic has operations in Helsinki, Finland and Stockholm, Sweden, and has built an interesting business combining offline and online commerce: while all the furniture that it sells (and designs and manufactures itself) is sold online, those who are interested in buying it can click on links to find locations where it is installed so that they can see what it looks like in real life. These may not be stores but public locations like hotels.
While it has a relatively extensive amount of products on offer, the selection is vastly smaller and a lot simpler than the soup-to-nuts approach that Fab has evolved. The focus for One Nordic is on pieces of wooden and metal furniture like chairs and tables, cushions, lamps, some artwork and shelving.
“We are pleased to announce a seminal partnership for Fab: the acquisition of One Nordic Furniture Company of Helsinki, Finland and Stockholm, Sweden,” the company said in a statement. “Long a darling of the Nordic design community, One Nordic brings expertise in innovative furniture design and manufacturing and a track record in online furniture sales to Fab’s global team of design, retail and marketing experts.
“The acquisition flows from a long-term strategic plan we laid out last fall. We have seen great success in our recent private label initiatives and customized furniture launches; our acquisition of One Nordic is the next step in pursuing this plan that is proving itself in market.”
Meanwhile, Goldberg puts this as part of the company’s bigger focus on design:
“Design is at the center of Fab—and has been since Day 1. Teaming up with One Nordic adds incredible talent to our design bench and brings us ever-closer to our suppliers and manufacturers. We are excited about the design collaboration to come.”
This is not Fab’s first move into making its own products. It’s a continuation of a process that started at the beginning of this year when it wound down several of its operations across Europe to focus on original furniture.
“Like the Fab you’ve known in the past, the new Fab is focused on bringing great design to our customers,” the company wrote at the time. “We’re transitioning our business in the EU to focus solely on growing our popular custom-designed furniture line. This means that our customers in the EU will have access to affordable, high-quality, made-to-measure furniture at their fingertips. You can configure our shelving, table, and seating systems online to create quality furniture that meets your needs perfectly. You choose the dimensions, colour and materials, and our skilled cabinetmakers will make your furniture and turn your designs into a happy reality.”
That strategy has also been borne out in the company’s acquisitions, such as the purchase of French furniture retailer MyFab.
For One Nordic, CEO Joel Roos describes the deal as an opportunity for the company to sell its products to a wider audience.
“We have dedicated ourselves to designing high quality furniture and accessories that deliver on a Nordic sensibility, updated for the 21st Century. Now, our partnership with Fab offers a new platform through which to share our work with people around the world.”
That’s a very strong hint that while producing its own design stock started as a European strategy for Fab, it intends to expand it globally.