The tables are turning

De La Espada is challenging Italian domination of the furniture industry by putting the designer at the forefront of its business model, says co-owner Luis De Oliveira. Jenny Dalton reports.

April 14 2011
Jenny Dalton

In a café just off Brompton Cross in west London, Luis De Oliveira – the garrulous co-owner of London-based De La Espada, the woodworking specialist furniture outfit – credits his failures and successes to date to two books. Book number one is called Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant by W Chan Kim and Renée Mauborgne. The other is The Long Tail: Why the Future of Business Is Selling Less of More by Chris Anderson. Reading the former, says the Portuguese engineer who first brought his wife’s company De La Espada to London from Madrid in 1995, nearly crippled his business. The second could be his mission statement for today.

It is fair to say that Luis De Oliveira has been round the houses with De La Espada. Over the past three years the diminutive, focused, 38-year-old father of two has turned completely about heel – moving from designer, retailer and manufacturer (what he dubs a “manutailer”) of chic, high-end furniture with stores in London, New York and LA, to a design management organisation that produces and sells furniture for some of the world’s best-known designers. Among them are Britain’s Matthew Hilton and Ilse Crawford, plus Istanbul’s hugely profitable darlings, Autoban. Also on his books, though lesser known, are the idiosyncratic Japan-based Leif.designpark, and British textile artist Charlene Mullen. Another designer is being added to the De La Espada portfolio this month with the launch at Fuorisalone in Milan of a new Dragon table and chair (price on application) by the Danish Søren Rose Studio.

Although only three years have passed since De Oliveira about-turned, the move from manutailer to manufacturer seems to be benefiting his business. Despite the recession, DLE, as De Oliveira calls it, surprised its owner last year by going into “decent profit”. Turnover for the company is, he says teasingly, “somewhere between €0m and €10m”, and travelling smartly towards the latter. De Oliveira believes that in 14 years’ time, his business could be worth €100m, with 20-30 brands under the De La Espada wing bringing in around €5m each.

It’s a business model on a scale without precedent in the design industry – based on that second book The Long Tail’s theory that you can make as much money selling small amounts of more stuff as selling large amounts of less stuff. The result? De La Espada could provide a business model capable of seriously challenging Italy’s supremacy in furniture design manufacturing – a model that tends to favour the company over the designer-to-hire.

“There hasn’t been another way of doing it before,” says the seasoned Matthew Hilton. “It’s either the Italian way, or you become a designer-maker and run your own business and sell your own work.”

Thanks to De Oliveira’s diverse choice of designers, the project could be one of the design world’s biggest triumphs to date. But, he adds, “I’m incredibly aware of failure.” Indeed, the past half-decade has been a rocky road and then some for De La Espada. For which De Oliveira puts the blame firmly at the door of the Blue Ocean philosophy he wholeheartedly bought into (“I hate that book,” he laughs bitterly). The book says that you should ignore competition, finding an uncontested market where your business can thrive.

For De Oliveira this meant developing an affordable, mid-market, minimalist furniture line to complement De La Espada’s successful, high-end collection of solid oak and walnut tables, beds and storage units, which was selling at the higher end of the furniture spectrum (£402-£9,066). He believed that it would change the tricky middle-ground furniture market, and sell like hotcakes. He was wrong. Atlantico, as the (actually rather lovely but extremely minimal) collection was called, bombed spectacularly. De Oliveira launched it at the 2006 100% Design exhibition in London, and, he recalls, the stand was empty for the duration of the show. It was humiliating.

It was also, he says, the moment when he realised that De La Espada was in trouble. Although his main line was (and still is) successful, the company was barely breaking even. With the Atlantico flop it was losing money. But everything changed at that 100% Design exhibition. With time on his hands to see other stands, De Oliveira came across Autoban, then young Turkish bursary winners. Their stand was initially empty after their shipper had let them down, but they managed to persuade magazines and anyone in London holding their work to get it over to them. Impressed, De Oliveira struck up a conversation, established a rapport with Seyhan Ozdemir and Sefer Çaglar and in minutes found himself being offered a chair to manufacture.

It was clear, says De Oliveira, that they had star potential. “They had a great sense of humour, a very acute sense of what they were, and they knew they had something I could buy into.” So, “in an instinctive moment”, De Oliveira found himself offering to produce not just a chair but their entire collection. “I knew if I walked out of the door with just one design, someone else would take the rest.”

The deal wasn’t standard. Often, he believes – again criticising the Italian model he is determined to trump – leading manufacturers secure a design from a designer but there’s little loyalty. Rarely does a relationship become a B&B Italia and Antonio Citterio – although clearly there are exceptions. “It can be quite mercenary,” he states. What De Oliveira wanted with Autoban was “their logo, everything in their portfolio, their support, a continued relationship”. The deal was struck at twice the usual rate of royalties. Although De Oliveira didn’t buy exclusivity – and doesn’t expect it with any of his contracted creative directors – he knows it’s such an intensive relationship it’s unlikely that those designers he collaborates with will find time to go and do the same thing with anyone else.

And so it was that De Oliveira found himself with a new direction for his company. But it was one he hadn’t planned for and didn’t, at first, know what to do with. That was until – with an equal measure of serendipity as that first encounter with Autoban – Matthew Hilton arrived, struggling to find quality production for his own line. De Oliveira’s new direction was set.

It was a direction that incorporated the contrasting styles of Autoban, with its slightly baroque East-meets-West brashness, and Hilton, with his refined modernism with just a hint of retro – as in the new Hide leather low chair with its folded all-leather cover (£2,730), and the updated arts and crafts feel of Ilse Crawford’s StudioIlse pieces, including a high-backed Settle bench (£2,154). Nevertheless, the unifying thread across all the De La Espada brands is craft. And in particular, woodworking craft. De Oliveira’s factory in the Oporto region of Portugal can produce each new collection without too much extra outlay, as the expertise is there already – from Hilton’s Light Extending table, with its kick-out legs that seem to defy the laws of physics (a bestseller despite the £6,126-plus price tag) to Ilse Crawford’s solid chestnut bench (£786), with its copper feet and knotty timber body, to Leif.designpark’s new Flowercup chair (from £1,242), Hug sofa (£2,994) and Tone cabinet (£4,422). With the more unusual requests – as in the case of an upcoming designer who wants to work with marble, or Autoban’s well-known gilded metal Pumpkin side table (from £1,590) – he knows he can turn to smaller workshops in the Oporto region. With Charlene Mullen’s complex embroideries in the mix – as featured in her linen or wool cushions (from £96) – there isn’t a material DLE can’t work with.

He now likens his relationship with his brands to that of a publisher or gallery or music company. Some are instant hits, others slow burners. After an incredibly successful launch collection for DLE, the Autoban duo are now international design stars – credited with designing much of fashionable Istanbul – and are branching out into the bar and restaurant world beyond Turkey, including the award-winning 208 Duecento Otto restaurant in Hong Kong, which is packed with their wooden furniture for DLE, including a couple of 1.4m-high Nest lounge chairs (£3,738) at the entrance. Ilse Crawford has recently completed a residential complex in Hong Kong called TwoTwoSix using her benches, and other brands feature in a constantly updated stream of new international projects: the new Puerto Rican W retreat (see United State of Oasis feature), the new Montpellier Chapter hotel in Cheltenham, and the Muse Hôtel de Luxe in Ramatuelle, France.

De Oliveira, interestingly, takes no commission on brokering deals where he has played a hand in them, knowing that the publicity value of such projects is all the payback he needs. What he has realised is that the designers under his wing have enormous goodwill and likability with press and public, and that is the key to success in modern-day furniture design. He doesn’t need an astronomic marketing budget – the designers “are their own marketing. We are living in a time when the designer is everything – he or she is the most important person in the industry right now; people are attracted to their work in the same way they buy art – the authenticity of a product needs to be traced to its author.”

And unlike, say, fashion, where we all seem to prefer the reassurance of the latest trend, with interiors we want variety. “Everyone has such different needs at home. The failure of Atlantico taught me that people’s taste is so fragmented, why fight it?”

It’s not just customers who want diversity. Key, independent design stores are forever searching for difference, he says, and these are the core of his market. Richard Skelton is director of the award-winning design store chain, Utility, which stocks several De La Espada brands. He says: “We seek out brands that are not widely available. And we shy away from manufacturers who sell from their own websites as they are in direct competition with us.” The attraction of De La Espada for a store like Utility is twofold, says Skelton: that they can buy several brands with only one billing company and one supplier to contend with, and that their quality is comparable (but a lesser-known alternative) to the well-known Italian brand leaders.

De Oliveira also believes that the Italian stranglehold on global style is waning, and that its one-trick-pony approach to interior design and retail won’t take it much further. Diversity, choice, quality but economies of scale and production are De Oliveira’s watchwords.

But how much diversity can De La Espada truly offer? Whether De Oliveira can achieve his dream of harbouring 20 or 30 brands under one roof remains to be seen. Matthew Hilton is sceptical that it can succeed with such numbers – certainly with just De Oliveira at the helm. “I don’t think it can work on that scale. Luis likens DLE to the music business in that he sees the management of brands like the management of bands, but in one big way it’s not like the music business. Music can be played by millions of people. In furniture we are making very complex products that have to be substantial and strong, and they’re for limited audiences. Having said that, Luis has been thinking about this for a long time, and maybe he understands it better than I do.” Certainly, to date Hilton is impressed with the DLE outfit. “It has exceeded my expectations in everything. The people in the factories have fantastic knowledge and are truly interested in problem-solving.”

“The factory in Portugal is amazing,” confirms Ilse Crawford. “They combine craft and manufacture in a way that preserves traditional skills. They add value in the finishing – say, choosing where on a plank a piece is cut, which is an aesthetic choice, and where to do things with machines to keep the price sensible.”

But Hilton also credits their sales team: “They’re bright and motivated and Luis gives people a lot of responsibility and then lets them get on with it.”

In one sense, says Hilton, De Oliveira is quite “hands-off”, leaving designers to make key decisions about their collections. (De Oliveira describes this trait as being “agnostic in terms of what the designers do – I don’t take a view; who knows what will sell best anyway? We never know.”) Autoban, for example, is to focus on arts and crafts influences in its new work, a decision that scares De Oliveira not a little, but he knows he has to trust the designers’ instincts, even if not every collection they produce will be as successful as that initial launch.

Textile designer Charlene Mullen says of De Oliveira: “His passion and energy drive the company forward. His meticulous approach to everything is reflected not just in the furniture but how the company is run. He gets detail and the importance of getting everything right.” What’s more, it’s all about his instinct, says Mullen. “It seems he has to like the designer to be able to work with them. The person comes first, then the work.”

How De Oliveira himself sees it working is not entirely clear. He admits that “the business is spread very thin” and he spent 26 weeks of last year on the road away from his Chelsea home. But he hasn’t got this far into running his own company to not see it unfold the way he wants if he can help it. His aim is “that you will not fail to come across De La Espada in the near future wherever you are. But you might not realise you have.”

And, assuming that it does work out, he might even decide to write a book about it.

See also

De La Espada