LOS ANGELES – If 2022 was an expansion year, with moves into two major East Coast markets and further development of its business-to-business efforts, 2023 is turning out to be a building year for circular furniture rental company Fernish.
“This year we’re going to grow the markets we’re in,” President and COO Kristin Toth told sister publication Furniture Today. For now, she said, it doesn’t have any geographic expansion locked in, but several markets have emerged on consumers’ wish lists for any future growth phase, including San Francisco, Miami and Chicago, according to the company’s recent year in review.
In spring 2022, Fernish, which already offered its rent-to-own furniture service in Southern California, Seattle-Tacoma, Dallas-Fort Worth and Austin, Texas, took its platform to the New York City and Washington D.C. markets.
“We’ve been methodical on how and why we open because we want a great customer experience,” said Toth. “We had considered a lot of markets,” she said, doing demographic research and looking at various factors such as the concentration of young professionals who may be ready to enhance their space beyond “fast furniture” but weren’t necessarily ready to invest thousands of dollars into home furnishings. Under Fernish’s subscription model, delivery, product assembly and swaps are free for customers.
Unlike the markets Fernish started in, the density and intensity of New York was considered a bit of a challenge at first. “Personally, I was more intimidated with New York than I needed to be,” said Toth. “New York, for a delivery-oriented business, is the big leagues. But we hired local experts, and they have been great … including navigating the ins and outs of tunnels and bridges.”
Those East Coast sites also proved to be solid markets for Fernish’s B2B business, which now accounts for about one-third of sales and is on track to become half the business. “We had partners who needed us in New York and D.C.,” said Toth.
Clients were looking to provide residences – corporate housing, rentals, vacation spaces, multi-family furnished housing – that require pieces that are “homey” and not just utilitarian. By offering more comfortable, livable surroundings, “our partners found they can justify the prices and get customers to stay in their places longer,” said Toth.
While Fernish is intent on growing its B2B side, Toth said the consumer component remains important, and informs factors such as style and product mix.
The company currently sources furniture and accessories from various suppliers, including retailers Crate & Barrel and Canada’s EQ3. But as the business has grown, Toth said, it has expanded to work with furniture wholesalers and, within the past couple of years, has even created its own designs. “Our biggest manufacturer relationship is in Mexico,” explained Toth, while other suppliers are based in Canada, Europe and Asia.
In a circular system in which items have a life span of four to seven years, Toth said there are four keys to what kind of furniture item succeeds for Fernish:
- It has to be something people love, but it also needs to be a style that continues to work in the long term. The top items by category in 2022 were the Dondra teak bed frame, the Remy upholstered corduroy sectional in charcoal and the Eden floor lamp.
- It requires durability. This means looking at all the components: foam, wood and how the fabrics rub and wear over time. Under those terms, a white boucle sofa doesn’t make the cut. “White boucle is so hard for us to keep like new,” she said.
- It needs to be able to be refurbished. That requires materials that can be refinished to remove stains and scratches. The most frequently refurbished product in Fernish’s line up is its Cheney wooden nightstand.
- It needs to be modular. Especially within the products they make, Toth said they want to be able to source specific components so they can switch out a damaged sofa leg or remove and replace a tabletop, if needed.
Fernish’s customer base is wide, but many fit the young professional model: 25- to 40-year-olds who are just starting to establish themselves. Fernish also appeals to downsizing couples, as well as those who find themselves in a new, often single, relationship status and aren’t ready to commit to new furniture.
The average customer rents for 12 months, renews for another 12 and ends up keeping about 40% of what they selected, said Toth. As the year-in-review blog detailed: The top renter has 31 items, although the average customer rents seven pieces. “Most of our customers buy at least one thing, but they don’t buy everything,” said Toth.
Fernish’s model is also designed to keep products out of landfills, and its year-end report noted the company kept 522 tons of furniture from being disposed of: the equivalent of 23.5 city blocks of furniture or 9.4 miles of product when stacked vertically.
As pieces reach the end of their rental life, Fernish considers donation options, too, including providing items for temporary housing situations or other community-oriented opportunities.
