How Are These New Nordic Home Brands Winning Over Young People Worldwide? | Maybe Europe Has the Answer ④

"We've never had the ambition to open hundreds of stores... For us, what we're good at is design."

If you're looking for a furniture brand that has young people around the world hooked right now, HAY is one of them.

The Dane Rolf Hay founded HAY 14 years ago; it began as a small two-story shop on Pilestræde in Copenhagen. Now even IKEA, the world's largest furniture manufacturer and retailer, has decided that working with HAY is a shrewd move — they announced it this past June. When Rolf Hay and his wife, Mette Hay, looked out from the stage that day, the room was close to boiling over.

Rolf Hay stumbled his way through an explanation of how HAY could trade ideas with a company the size of IKEA — the brand's founder speaks less fluent English than many of his Danish peers — but that hasn't stopped HAY from building a global business. Over the past few years, HAY has opened 33 standalone design stores around the world, plus HAY Mini Market, specialty shops selling its bestselling stationery and small accessories.

It's no exaggeration to say Rolf Hay and Mette have become idols to some people. This past June, The Wall Street Journal chronicled a day in the Hays' life in words and pictures — a carefully planned piece of brand marketing: the editors believed readers might want the story behind this young brand, and Rolf made sure he got the exposure.

"The last time was several years ago," Rolf Hay said one morning in late June. He was sitting on the second floor of the flagship store HAY opened a few years ago, crowds streaming past the window on Strøget, the busiest shopping district in Copenhagen. Clearly, Rolf Hay wanted that foot traffic. In the summer tourist season, more than 80,000 visitors a day walk down this, the longest pedestrian street in Europe.

But most of them stride right past this corner, heading for the bright, big-name shopfronts farther along. Unlike the two floors above, which redo their displays every three months with a certain urgency, the ground floor of HAY's flagship store looks like a deserted museum: a narrow entrance, an escalator going up, dim light, not a hint of invitation.

"I chose a place like this on purpose. A lively commercial district, a shopping street, but slightly set apart. The street reminds people that HAY exists, but this building doesn't really look like a store," Rolf Hay said that morning in late June. "So, in effect, you need to know about HAY already."

The Young Brands of This Century

Not everyone knows HAY. But design lovers and design professionals across Copenhagen are all talking about this Danish furniture brand, founded at the start of this century. "They're the biggest player in the market, and they're the ones who promoted the Nordic lifestyle," said Camilla Høeg Gade, who six years ago was an editor at a Danish interior design magazine and later joined an up-and-coming design brand herself.

HAY isn't the only one. Normann Copenhagen, which turned an old theater on Østerbrogade into its store, put out its first light fixture in 2002. Four years later, Kristian Byrge, an early partner in the Michelin-starred restaurant NOMA, co-founded the furniture brand Muuto. Like NOMA, it openly claims the "New Nordic" style.

After the "golden age" of masters like Finn Juhl and Arne Jacobsen, the renewed global popularity of Nordic design owes something not only to IKEA but to these young brands. Riding people's mania for Nordic food and their goodwill toward Nordic life, the brands picked up consumers all over the world. Old names like George Jensen didn't fall behind either: they found young designers such as Thomas Lykke to serve as creative director, hoping to make a comeback. Though the most important line on Thomas Lykke's résumé is still his time as home editor at Wallpaper, a magazine that had plenty of good things to say about young brands in those years.

Some of the young brands have indeed lived up to expectations. At Illums Bolighus, the most famous multi-brand home design store in Copenhagen, close to half the brands on the floor were founded after the 1990s. They usually cost much more than IKEA, care more about design, and stress "Scandinavian design with a twist."

Facing an entirely new market, they had to find new ways to sell — while keeping one habit of the old Nordic brands: rarely relying on designers inside the company, and reaching instead for "outside brains." Rolf Hay puts this appetite for the new down to one thing: the craze for fast-fashion brand H&M's designer collaborations, which served as a reminder.

Marketing clout was indeed a big consideration when new brands worked with established designers. Early on, it helped them "fire the first shot."

Marie Hesseldahl spent this summer interning at Muuto as a product development assistant. Muuto has grown fast in recent years and has about 110 employees; headcount rose roughly 40% last year. The one team that hasn't grown is the in-house design team. "We only work with other designers. We don't have our own," said CEO Anders Cleemann, who says working with outside designers is the key to Muuto's success — the Oslo design trio Norway Says, for instance.

But brands also have to weigh how to let outside creativity in. More than one person has complained that once you walk into a multi-brand store like Illums Bolighus, telling the Nordic brands apart is close to impossible. They all look too alike — so why should a consumer follow any one of them?

The product development job Marie Hesseldahl holds helps square brand DNA with outside creativity. The way her six-person team works is not what designers usually imagine: opening the inbox every day, reading hundreds or thousands of design submissions, then pointing at one and saying, "Good, that's very Muuto." Most of the time, Marie helps draw up a complete product matrix, so that when they go to a designer themselves, they can usually say precisely what sort of "candlestick" they need.

When IKEA began inviting HAY to be one of its "outside brains," Rolf Hay said he came to understand the relationship between designers and brands better, and that this is what IKEA is most worth learning from: "They understand how to develop a product, how to think about a product in terms of production."

HAY has also tightened up its loose way of working with designers. It wants long-term, steady relationships with outside designers too. A television the Bouroullec brothers designed for HAY and Samsung launched in Copenhagen early this year, and the Paris design duo had already designed HAY's tables, sofas, and its newest outdoor collection. HAY hasn't said so, but the relationship is probably exclusive: other brands won't get to borrow the same ideas.

One evening in late June, HAY held a small cocktail party in its old store on Pilestræde. More than half of Copenhagen's designers and design enthusiasts turned up, all looking for opportunities. So was the brand. Holding a bottle of the Danish beer Carlsberg in a Copenhagen alley that evening, HAY's PR manager, Laura A. Galu, said they planned to hold gatherings like this more often.

Stores Everywhere?

Rolf Hay is a little obsessed with size, which makes him unlike his Danish peers. Some of them, like Muuto, mean to create another classic and treat Vitra as the model — the Swiss furniture brand, founded in 1950, has its own museum on the bank of the Rhine. But as a rule they have no wish to become another sprawling H&M or IKEA.

Rolf Hay sees it differently. "If you're big enough, you can work with good enough suppliers, and with the best designers. Because fundamentally you're running a business. If you want everything to be more efficient, size and growth matter enormously to a company," he said.

Even so, Rolf is in no hurry. He says he's pretty satisfied for now: HAY has "got the balance right" between distributors and its own design stores.

HAY opened another standalone design store in Shanghai not long ago. It plans to add one in Chengdu soon. For that, HAY even hired a dedicated architect to design all of its stores in China. The Danish brand has eight offices around the world, two of them in China.

In the Chinese market, stores matter a great deal. And "in China everyone likes big stores," said Valerie Schmidt, export manager at Normann Copenhagen. She joined Normann five years ago, when Europe had not yet recovered from the financial crisis — which helped them settle faster on the markets to push. "The Asian market is relatively easier," Valerie Schmidt said. Even so, only at the end of this August were they finally about to open their first partner store, in Shanghai.

The financial crisis a few years ago made these small companies more careful. They measured costs closely and thought harder about how products are made and designed. Normann now sells in 82 countries and doesn't have a single standalone store. But Valerie Schmidt insists the crisis isn't the reason they've been unwilling to expand through stores.

"We've never had the ambition to open hundreds of stores. We don't have a retail chain — that's a different business, and we need to pay attention elsewhere," Valerie Schmidt said. Dealing with the press and with local customers can be left entirely to partners, she added. "For us, what we're good at is design."

Muuto doesn't even have a store of its own in Copenhagen, only a showroom. But it has more than 700 distributors worldwide. This January, co-founder Peter Bonnén moved to New York to work from a newly opened office there, meaning to concentrate on the US market. For the past five years they have relied mainly on the distributor Design Within Reach to look after American consumers. Design Within Reach has more than 30 stores in the US, but CEO Anders Cleemann can't even remember where they first ran into this rare sort of distributor.

Before joining Muuto in 2007, Anders Cleemann was a vice president at IC, a Copenhagen fashion company. He had run company-owned stores before and thought it a great deal of trouble; for a small company growing as strongly as Muuto, there's no need to spread the team thin on things it isn't good at. "We'd have to rebuild the organization's capacity for direct retail from scratch. That's an entirely different set of rules," Anders Cleemann said. Muuto has no plans to open its own stores in the future. In some stores Muuto sits in the luxury section, and that suits them fine.

By comparison, HAY is already taken as the model of an aggressive retailer. Most brands would rather show up often at the design weeks in Paris and Milan and sell themselves to distributors. &tradition, founded six years ago, already has 160 retailers worldwide, partly because it is always out at design weeks in Milan, Paris, Cologne, Stockholm, and New York. Next year it also plans to go to a furniture fair in Shanghai.

Sometimes these brands follow a plain principle with distributors — stay on good terms — believing that "if a store feels the conversation with us went well, they'll be more inclined to push our products. So what matters is building the relationship."

Perhaps a firm relationship with distributors really is more dependable than the fickle tastes of consumers. What these Danish furniture companies worry about most right now is that the current Nordic vogue may not last long. Five years? Ten? "If people suddenly all hate wooden furniture, then we'll stop making it," said Normann's Valerie Schmidt.

Apart from Muuto, none of these Danish brands intends to describe itself as "Nordic design" any more. They are trying hard to prove, through the globalization of their designers, that they won't be discarded when the trend recedes. &tradition has worked in elements of classic Italian furniture. "We're not afraid to do other colors, other shapes, to be more experimental," said Camilla Høeg Gade, the former interior design editor, who is now &tradition's PR director.

Growing Fast

Something big happened at &tradition in June.

Nine United, the parent company of Bestseller, the clothing company that makes the ONLY brand, became its new investor. Nine United also invests in HAY, and the group's founder, Troels Holch Povlsen, is a co-founder of HAY as well; he is more involved in running the brand than press coverage suggests. The week before Rolf Hay gave this interview, the two of them took a business trip to Amsterdam together. That morning, Troels Holch Povlsen had recommended a stone tile to Rolf Hay for redoing the stores.

&tradition plans to keep the news quiet, to head off worries about where the brand's design and positioning are going, but the change of investor will still alter the company's course in the foreseeable future. In the past, people believed another of its investors was crucial to the brand's fast growth: Bjarne Hansen, father of founder Martin Kornbek Hansen. The Hansen family founded Menu, an influential Danish furniture brand, in 1979. Bjarne Hansen introduced &tradition to an architecture and design studio he trusted, NORM, which had worked closely with Menu over the long term from the day the studio opened.

Beyond the shelter of the founder's father, Camilla Høeg Gade thinks the biggest benefit the new investor may bring is that &tradition can share HAY's logistics and materials. "HAY produces in huge volumes, so their factory prices are very low, and we can get those prices too." At the same time, "we also get some market intelligence — they know certain foreign markets very well."

Supply chains and market knowledge count for a lot at a small brand company. It was Bestseller's growth in China that let HAY find a suitable manufacturer there 12 years ago — and the manufacturer started running HAY's stores in China before HAY itself did.

Muuto brought in an investor of its own two years ago, Maj Invest Equity, handing over a 45% stake. CEO Anders Cleemann says the investor's involvement "mainly provided an understanding of international markets." At the same time, this company of around 110 people has become stricter about money, forever checking whether each new investment — in a new system, a new warehouse, a new organizational structure — really helps the brand grow.

On the whole this is good for small companies. But after a long economic slump, most of them still haven't had the luck to catch capital's fast train.

Cover image from Normann Copenhagen, HAY; in-text images from MUUTO, bouroullec, Hay Mini Market, Menu, Design Within Reach, &tradition.