How Roche Bobois blends furniture, fashion, and the French 'Art de Vivre'

0:03This is Business of Home. I'm your host, Denis Scully. Every week I'll be speaking with leaders and innovators from all corners of the home industry. My guest this week is Martin Glees, the international director of the French brand Roche-Bubois. Founded in 1960, over the decades Roche-Bubois has become synonymous with chic contemporary design. The first furniture brand to advertise in fashion magazines. Today Roche-Bobois' hit products include the iconic Mahjong and bubble sofas And hundreds of the brand's showrooms are spread out all over the world I spoke with Martin on why the post-COVID landscape is fraught with confusion for furniture companies The opportunities and challenges in China And why the biggest mistake for any brand is to try and be two things at once

1:07This podcast is sponsored by Lalloy, maker of rugs, pillows, and wall art for the thoughtfully layered home. This fall at High Point, Lalloy introduced a breadth of new collections for all styles, all aesthetics, and all price points. Visit lalloyrugs.com to see what's new and sign up for a trade account. That's L-O-L-O-I rugs.com. and follow them on Instagram and TikTok at LeloyRugs. This podcast is also sponsored by Annie Selke. Rooms may come in different shapes and sizes, but that doesn't mean you have to settle for a rug with a so-so fit. Annie Selke, known for their best-in-class Dash and Albert rugs, offer more than 140 custom-sized rugs to suit not only any space, but also every style, from farmhouse to coastal and everything in between.

2:03Whether you opt for hand-tufted wool, durable indoor-outdoor, or natural jute, Annie Selke's custom-sized rugs will always give you a flawless fit down to the inch. To learn more, visit AnnieSelke.com. That's A-N-N-I-E-S-E-L-K-E dot com. And now, on with the show. I want to begin by really telling the story of Roche-Bubois and its origin and its history, because I think while many people in this country are familiar with the brand, I'd be surprised if they really knew the story and the history. So I'd love to share it. Well, it's a history that we formally date back to 1960. we date back Roche-Bobois to the union of two families who decided to join forces and create a brand so rather than having two retail shops retail showrooms that would be Mr.

3:12and Mrs. Roche Furniture Limited and the other brand should be Mr. and Mrs. Bobois they said we have to you know we have to build something that goes beyond and we want not only to retail, but we also want to edit. And so we take back that idea to 1960, where Grosch and Bobois became Grosch-Bobois. And then in 1960, we have those two showrooms in Paris. So they would corner the market. And little by little, they developed their own operation, their own showrooms in Paris, more showrooms in Paris. And then they had the idea to franchise. So they were very much trade blazers to the aspect that they started in France this franchising trend at a very early stage.

4:04Very quickly, the franchising went to the US, it went to Belgium, it spreaded quickly. They were a very dynamic bunch. They also, at this time, very quickly started to edit their own collections with exclusivities, with manufacturers, with designers. So the genes of what we do were there, and this is why we formally date back to 1960. Well, and it sounded as though, in looking at the history, it sounded as though the discovery of Scandinavian furniture and the Scandinavian Furniture Fair back in the day made a big impression, yes? It did, because it was a trend that they really imported in France.

4:48And little by little, they also started to secure exclusivities and have people work for them. So that at some point, Roche-Bobo and Scandinavian designs were very combined. You've used the word edit and they wanted to be editors. And I wonder if you could explain for listeners what that means and how the company thought about it. You also talked about building a brand, which is so much of what I want to talk to you about today, because that's so much at the heart of what Roche-Bubois is all about. But tell me about the early thinking there. The brand is a key notion because I think back then there was only distributors.

5:32Like the most probably there was of a brand was whatever Smith family furniture. That would be the kind of brand. But in abstract, an abstract name that would define a style didn't really exist back then. So that was sort of the idea that did exist in fashion, but not so much yet in furniture and design. So it was a matter of trying to forget each other's name and create something that is above the name. Mr. and Mrs. Chouchon, the Chouchon family, understood that it was better to let go of their name to create something that would create attention. And Beauvoir is a creation. Beauvoir means beautiful wood.

6:26So that's the brand. And the other anecdotes or actually a strategy that they were very innovative with was advertising. Advertising outside of the furniture world. So they were the first ones to advertise in the fashion magazines, for instance. So Roche-Bauvoir would become an early lifestyle brand. The editors also, looking at it from today, everybody wants to be an editor. Everybody wants to own their collections and distribute something that they created or that they can sign for. There is a divide between the manufacturing world and the distribution world. It's two brains, like kind of left brain, right brain.

7:14So that was also a very innovative part where distributors, retailers like Roche-Baubois would also see a key point in owning their designs, but not manufacturing them. Well, that's what I found so interesting when you first described all of this to me. I didn't realize that you didn't own any of your production facilities, right? That everything is made by workshops throughout Europe and around the world. And that also you don't have, if I remember correctly, your own design team per se, right? You work with various designers who create for you, but they are not employees of Roche-Boubois necessarily.

8:00They are not. we have a team of what you could call buyers or sort of a design office, but the creators, the designers are outsourced. You can't really have a talented designer being an employee. It's a different mindset. And I don't believe there's any of the great current designers in any field that are actually employed by a corporation. It's extraordinarily rare. They are free. By definition, they are independent, and they cannot be dictated. And the other thing, which also, that's the reality, as we can see. But we, as a corporation, wouldn't want to dictate our personal taste. That's not what we want to do.

8:54We want to have those free minds, those outstanding professions of design or architecture to freely imagine the synthesis between their style and how it should apply to our brand. And that, by definition, can only be done with people outside the company. So getting back to the brand and the origin, what was the brand in the very beginning about? What did the families decide they wanted Roche-Boubois to stand for? Because as you say, they weren't going to be making their own product. They were going to be selecting product. And they were advertising, trying to present a brand message right from the very beginning.

9:40And you've remained big advertisers over the years, which we'll talk about. But what was the brand? What is the brand all about? They wanted to be innovative. They wanted to be having a real sense of creation to set their mark in the world. And they also had something that not everybody had. They absolutely had in their mind that things should be comfortable and quality. So this is the whole circle, innovation, creation, quality, and comfort. The other element is that they wanted to develop. They wanted to go to the world. These men and women had a huge dynamism and huge ambition for and believed so much in those values that you just described, but they thought they were fit for the entire world.

10:41And in the beginning, you described the model of franchising. And it sounds as though you've taken back a lot of the franchises now over time. So at what point did that change come and what brought that about? Well, many things happen in the world of franchise over time. There's change of generations. You know, the father, the grandfather, sometimes pass it onto the children. Children successfully make it. Some children don't successfully make it. Some children decide it's not their thing. So then what are the options? And we would always be there usually to either select a new franchisee or actually think we can do it better or don't find a fit alternative franchisee and just maintain the brand locally.

11:31So it's not a strategy. It was not a strategy to take over franchises. And only recently, very recently, that we have done a more strategic shift, in particular in China. China is a case on its own. And we can't make it on our own in this huge and mysterious country in terms of distribution. So that's more like a strategic move when the other ones were more opportunistic. So you are just back from China. I'm just back from High Point. You're just back from China. And so I want to compare notes on both of those because it's very top of mind for me. But China was a big discussion at High Point because people are wondering what's really happening on the ground.

12:23Obviously, the Chinese government appears to be trying to stimulate the economy again and get things going. We've seen big surges in Chinese shares here in the US and around the world. And I wonder, what's your perception of what is happening there? It's quite difficult, I think, to analyze these days the furniture business numbers because all the furniture business has been positively affected by the COVID aftermath. everybody has had such a search that it's tough right now to understand what is just a slowdown to readjust to what is a more realistic market and demand or what could be a shift in the trend so this readjustment is hard, I find it very hard to read and in America it is, I mean currently we are we've been stagnating this year.

13:26We were always used to growth. We have this small decrease last year, and this year we are flat. So it could be disappointing. However, it's vastly above the numbers pre-COVID. But are we realising? Are we in a little bit of a recession because of the economic factors? And when I say economic factors, it's probably mostly the interest rates affecting the real estate that are affecting us. This whole trend, we see it's exactly the same in China. It's the same. We've had very high numbers in the years 21, 22, early part of 23 maybe. It's cooling off right now. But where do you draw the line between a cool off and an issue in the market?

14:18So I think this is where we are not worried. However, we shouldn't be naive either. But it's the first time in my experience in furniture for more than 20 years where I find it very hard to estimate what is the growth level we should expect ahead of us and how to ascertain this excess of orders somehow that we have in two years, how does it affect the current market? And this is sort of shaking a little bit our capacity to forecast. So that's my understanding, or actually, should I say my total non-understanding of how to budget 25. However, what we see is that we are finding growth again. We are also finding high quality customers that have never really left.

15:22And we are also seeing that the real estate market looks like it's stabilizing, probably on the way up in Europe at least. And the other positive factor is that the markets, the stock markets, the stock exchange markets, financial markets are pretty strong. And should there not be any outstanding aggravation factor, we should have a better 25 and 24.

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16:44And now, back to the show.

16:51When did Roche-Bubois first come to America? And tell me a little bit about how you thought about coming to America and the American market. It happened through Canada, actually. because we obviously through the French language, there was proximity with Quebec and our first franchise in North America was in Quebec. And then some curious franchise, Valenci, Maurice Valenci, that was a big name in America, understood that it was a good business and started the business in America, in New York City. You know, if we understand that the company was founded in 1960, pretty much 10 years after, there was already a presence in North America.

17:42So it's not very linear. It's an expansion that would be similar to the luxury brands, fashion luxury brands. So we can draw a very clear parallel with the luxury fashion industry. Yes. And it seems as if much of your approach is very similar to the French luxury brands when it comes to marketing and positioning and, again, branding. And often the furniture industry, as you were suggesting earlier, is criticized for not doing a good enough job when it comes to branding. and many people point to the success of the lifestyle retailers. And here we go, Martin. Here's going to be the first mention of RH in the conversation.

18:33But RH and R-House as well, many people point to the fact that they did such a good job of branding themselves and the product, not that it was secondary, but that the branding was what was so important. And I want to hear your thoughts about how you think about branding and positioning, because many people in the furniture industry feel it's challenging for them to have the resources to really advertise and market themselves. Yes, it's exactly where the two worlds divide. Those who believe in branding and those who don't have enough margin or don't have enough resource to actually create everybody who like their name to become a brand.

19:25Even Mr. and Mrs. Smith's furniture of wherever in Alabama, they would like to be a bronc their brand is their name and uh uh but creating a uh creating a ground you have to have the means rh is the master of all for for creating uh for creating a nail and having the means what what what they've been doing is hugely uh respectable and it's it's a new it's a a new way to approach banks who a name a wrong but again they are a company that don't manufacture so they they allocate their resource to the branding to the lifestyle to the the June that will allow the brand to be desirable. That's probably the only way to emerge.

20:22There's not many successful companies that have not created a brand. The expert company that just shines because they are expert and reputable somewhere, they can live, but they sooner or later become taken over by another company that is able to federate through one. And so is it your feeling? Because I'm always curious what you think RH has done so successfully. And you mentioned the point about the margins. So often the furniture manufacturers will tell you, we simply don't have the margins to allocate all of these resources to brand building. Of course, to your point, we'd love to build our brand.

21:08We'd love to be a household name. We'd love when you ask consumers, instead of answering IKEA, we wish they would say our brand as the most recognized brand in furniture, right? But because they're manufacturers, they just don't have the margin. If you're an editor, if someone else is manufacturing for you, does that suggest that you have a wider margin and therefore you have the resources for branding? Or is it about your priorities? Not necessarily, because first of all, there are manufacturers that have successfully created a name, which has become a brand. And you can imagine all the luxury Italian manufacturers who are brands, but they have allocated a substantial amount of money to develop something.

21:57So either they develop ad.id or they develop a network of influencers or prescribers through interior designers, architects, and so on. They have allocated some of the money to something. So you have to understand that at some point, it's not about having the lowest price possible. It's about having a reasonable value, but something else that allows you to do, be it an outstanding distribution system like RH did, which is a crazily inspiring distribution network, or you've actually managed to make it so attractive to architects, interior designers, prescribers to work with the manufacturers because you would be able to distribute the furniture and make good money out of it.

22:50And this is more the Italian business model. that you buy from a manufacturer, but there's enough profits in the reselling price, and there is enough lifestyle around it because working with those Italian manufacturers, there are perks to this, be it only to travel to the region of the lakes in Italy where you discover all of this. So there has to be an idea. There has to be value in the system. If there is strictly quality and cost as close as possible to quality and no vision to create a name in advertising or to create an experience, there's just a limited potential for global expansion. You approach the US market in a different way than the Italians, for example, and many of the companies that are at the higher end in that you are very focused, if I understand your strategy, on the end user, on the consumer.

23:56and you want to build a brand to them, and your hope is that they will push Roche-Boubois to their interior designer, to their architect, and say, no, no, I want this product. How has that worked for you? And does that seem contrary to what most people try and do in the US? And how do you think about that? I don't think somebody can create a business and say, I will price my product like this and so that I can squeeze the... I don't think it happens like this. I think it happens so that in the past, our founders, when they decided that there was an absolute necessity to support a name, to create a name in the industry, to be Roche-Beaubois rather than Mr.

24:49and Mrs. Roche from Paris, it needs money to do this because you need to spend a little bit of advertising in the magazine you need to do some events, you need to create that value that makes your company into a household name or lifestyle brand and that has a cost so that cost and also sorry I should add an important element you want to have a nice show you want to have something that is that a destination show or it's something that works also as advertising, that participate in building the name, building the brand. All of this has a cost. So I don't even think they said, okay, let's price this like that because we will strategize that way.

25:38They needed that money to build the brand. So they had to allocate the money entirely to their system and not to the resellers, not to the distributors, not to the prescribers, not to the architects. And so was it a decision to talk to the end customer? Yes, it was. But the way the pricing has been built, made it that it was the only way. There was not enough profit there to pay for the company and also for the in-between. So it's very difficult to understand and to say, yes, it's been created like this. But out of necessity, we've always talked to the end user because we've spent the money to go to them and talk directly to them and try and make them understand that we are the proposal.

26:39We are the desire. We are the expertise and we are the source. And so the hope is that you educate the consumer and then the consumer in turn, if they're not purchasing directly themselves, they're encouraging their designer to purchase Roche-Bubois. We try to have... To hope that happens. We try to build enough desire in the brand so that they will make it one of the names they want in the house. And we also try and have enough of a good service with interior designers in-house, with 3D service, with experts. and if you sum this with the desirability of the brand, we have a whole distribution system.

27:36I think somehow this is the same approach as RH, for instance. It's probably we have more design, we have more lifestyle, but they have more experience in their showroom, but it comes to the same driver of making it a necessity to start by this name or our name to get to the bottom of their new styling scenario. So do I understand you correctly in that the thinking was if we're going to prioritize branding and advertising and making beautiful spaces, we also don't have enough margin to create a meaningful designer discount on top of that? Is that how you think about it? I think you describe it well.

28:35If we want to maintain a good value for the client, to make a competitive product, stay in the market, and have a nice showroom, and have good stuff that is going to give you quality advice, follow-up service, and also support the name in the main marketing media so that there's desire. Then there's not really a justification on top of that to hugely remunerate the in-between. we keep enough, we keep what we think is reasonable to satisfy the designers because they do a job, they work, so they will get a decent commission. But it's not the primary business model. For some companies, it's the primary business model.

29:36This is how they attract clients is through a larger discount. We have considered that we want to have a little discount, a little allocation of money for nice rent, a little advertising, and a little lifestyle and advice in art. So I would say we have made a compromise of everything.

30:02We're taking a quick break from the show to remind you about Lalloy, whose fall introductions for all styles included new collections from collaborators Amber Lewis, Magnolia Home by Joanna Gaines And Rifle Paper Company Plus newly added one-of-a-kind rugs, pillows, and wall art Visit laloyrugs.com to see them all That's L-O-L-O-I rugs.com And at laloyrugs on Instagram and TikTok And now, back to the show

30:39when i spoke to to daniel lond right from uh what he calls his company today is it floss b and b italia i think yes yeah okay so he too is trying to to figure all of this out right i i got the sense he'd love to get rid of the trade discount altogether he finds it a confusing message, right? And I know that for both of you, pricing integrity is very important and pricing is so easily discoverable today that it's challenging. Luckily, we have always had at heart that we talk to the end client with transparency. This has been the DNA, but I understand exactly where these guys come from, where their strength We always relied on their pre-distributors, on their middlemen, which were the ones who would distribute and attract.

31:41But it's hard to build transparency in this system. It's very difficult because effectively the end client has always had a hard time traditionally to understand what's the real price of a product. And the tap price in that type of industry, the tap price has a reputation to mean sometimes this, sometimes that. And I know they are working hugely on creating a more retail aspect of their business. Even though they actually don't sell much in retail, very little, they do want to integrate that transparency and that more corporate aspect. So I think they are in the opposite space of where we are.

32:28We have always dedicated our energy to talk and to give everything we can in terms of clarity, transparency, service quality to the end user. that's always been our and we have a hard time to attract designers who make a living with distributing furniture. These people, of course we have always understood that it cannot be our business model and to the contrary, they today understand that history and transparency and the internet for the past 10 years and Instagram and the non-stop forums and chats that you can find make it challenging to keep a reputation. So, yeah. But after all, what we can discover, and I think what they are discovering now, what I've experienced as well, is you cannot do both things.

33:21You cannot be a wholesaler and a retailer. It just doesn't add up at some point. The brands, the companies, have to decide if they want to do a retail or if they want to do a wholesale. And a 50-50 case is hugely risky at some point. I think a brand has to decide which channel of distribution it wants to go to. It's interesting that you say that because that was one of the big issues that came up a lot in Highpoint was channel conflict and the complexity of, and many designers will tell you and they often tell me, I don't want to shop somewhere where that product is available to my client. And so that's challenging.