"We're reinventing the office realm, certainly for small business," says Red Brand Manager Greg Clark, 28. "We're giving [entrepreneurs] an office environment that communicates the passion and excitement they have for their business."
The Business & Institutional Furniture Manufacturers Association forecasts a 4.4% decline in the U.S. office furniture market to $12.7 billion in 2001. Red, introduced last November, has bucked this trend. As of June, analysts' estimates ranged from rapid week-over-week sales growth of between 5% to 7% to a less-optimistic 7% over the previous quarter. Merrill Lynch analyst Pam Singleton estimates Red's revenue, while growing rapidly, is still under $20 million. Red has achieved these increases by targeting an industry bright spot, the growing small-and home office-segment.
"Fifty percent of people employed in America are employed by small businesses, and that's a market that Herman Miller wasn't really reaching," says Mr. Clark, formerly a Herman Miller product manager. Red executives opted to reach customers through a Web site (hermanmillerred.com), where visits have tripled in the last six months, and through dedicated retail stores, the first of which opened July 17 in Manhattan.
A Microsoft Network partnership and an e-mail marketing campaign drive traffic to the Web site, as do print ads, direct mail, public relations and events. Fairly Painless Advertising, Holland, Mich., creates all print, direct mail and direct e-mail. Red has yet to air TV spots.
All these efforts support Red's core message, says Mr. Clark: "We're all about hip, affordable design."