June 15, 2023

NEOCON 2023: Office Furnishings Show

The Stump team traveled to Chicago this week for the annual office/contract furnishings show called NeoCon. It was an upbeat and productive show, and CEOs were optimistic despite continued occupancy headwinds and disruption in the office sector.

Neocon is one of Stumps’ favorite trade shows (June in Chicago tends to be a win!), and, historically, the show has been located in one place, but there is now disruption with the competing venues. The Merchandise Mart is the historical site for the entire industry to gather under one roof, but, this year (for the second year), the Fulton Market Design Days was active and vibrant with old warehouses converted to loft showrooms, and new towers with bright and airy venues for product displays and client meetings. The tenants love this area for this annual show and year-round meetings.

There is a terrific food scene in Fulton Market and emerging boutique hotels. It will get even better with time. There is clearly a transition away from the Mart to Fulton Market, yet the Mart was nearly full of new exhibitors (many new names and lots of international players), and the halls were jammed and attitudes were upbeat.

The logistics of getting between the two venues remains challenged with too few buses, poor mapping of where showrooms are located, and the Tuesday rain didn’t help. Disruptions aside, we enjoyed the show and the opportunity to meet with over 50 industry CEOs.

QUOTE OF THE MARKET

When I mentioned this resi-mercial product focus, one seasoned CEO said “No! Resi-Mercial is a bad word. The name to use is ‘soft contract.’"

Key Takeaways

Disruption

Beyond the showroom competition, many friends were concerned with the fragile dealer network, and the threats of e-commerce and direct sales models. Aligned dealers are under pressure thanks to a COVID hangover along with the MillerKnoll combination, and the aging ownership of the dealers. Expect to see consolidation.

Soft Seating

The key product trend was comfortable upholstery for creating inviting office environments that entice the expanded work from home population of workers to return to the office. Quote of the Market: When I mentioned this resi-mercial product focus, one seasoned CEO said “No! Resi-Mercial is a bad word. The name to use is ‘soft contract.’"

The Future of the Office

Our clients are witnessing corporations shrink their office footprint, and commercial office real estate owners are scrambling to remain solvent. Will employees come back to work? Can bosses require employees to work in the office? We are seeing shorter lease terms, and more modular architecture furnishings to remain more flexible in this choppy economic time.

M&A

Following the MillerKnoll and HNI-Kimball acquisitions, we expect to see more transactions, both large and small. We see many older owners who have no succession plan, as well as many weaker companies, seeking “just to get out.” Call us if you want to discuss a sale process! Our recent commercial transactions can be found here. And we have several new commercial transactions just starting, so let us know if you are an interested buyer.