Fernish, the furniture rental company born in Los Angeles five years ago, makes the leap to the East Coast today, with the launch of operations in New York and Washington, D.C.
Fernish was created to be furniture rental for a new generation. Instead of being an option for consumers who can’t afford to buy furniture – the old model of furniture rental – it was conceived as a way to make it easier for young urban professionals who are always on the move to have nice living spaces without the hassles of having to move furniture themselves, or the waste of discarding furniture when they move.
The company has raised $75 million in funding since 2017, and during the pandemic it pivoted nimbly to offer more desks, office chairs and other work-from-home essentials.
The pandemic slowed Fernish’s plans for a nationwide rollout somewhat, but overall it has been good for its business model, with revenues up 17 times compared to two years ago, according to Michael Barlow, Co-Founder and CEO of Fernish.
The pandemic, and remote working, have created an “impermanence” trend, Barlow noted, where young professionals are more likely to try out several cities before choosing a permanent home.
That trend “is awesome for my business,” he said. “We have a solution and market that’s scaling nicely.”
Fernish begins taking orders today in New York City and Washington, D.C. In New York, it will be spreading the word with an advertsiing “takeover” of the West 4th Street subway station, with signs urging commuters to “Free Your Home” by renting from Fernish on walls and turnstiles.
Bringing Fernish to New York has been a goal of Barlow’s since the company was created, he said, because New York provided the inspiration for Fernish.
“So much of this business was concepted when I was living in New York,” Barlow said. “Like every young urban professional there after undergrad in their twenties or early thirties, you move every year or two with different roommates. You leave furniture in your apartment, and you lose your security department because it’s going to cost $1,000 to move it from the West Village to the Upper East Side and you’re thinking ‘Is this Ikea stuff even worth $1,000?’, “ he said.
Fernish has set up a logistics hub in Secaucus, N.J. that will serve Manhattan as well as all of the boroughs of New York and parts of New Jersey.
In New York, Fernish is entering a market that already has a number of upscale furniture rental companies, most of them born around the same time as Fernish and catering to the same millennial customers.
Traditional furniture retailers have partnered with rental startups, and, some, like Ikea, are testing starting their own rental services.
The New York and Washington, D.C. expansions bring Fernish two steps closer to its plan of being in all of the major metro areas young professionals are likely to move to.
The company also operates in Southern California, Seattle, and northern and central Texas, covering the cities of Dallas, Austin and Fort Worth.
“It’s not a full national footprint but we’re getting so much closer,” Barlow said.
The company needs that footprint, he said, to be able to serve the customer who wants to leave his or her Fernish couch, table and bed behind in LA and have a set of furniture waiting for them when they arrive at their new apartment in New York.
“We have to be where our customers are today and will be tomorrow,” Barlow said. “The people who are moving from LA to Austin to Dallas to Phoenix to New York and then settling down in Charlotte over this 5 to 10 to 12 year period after finishing undergrad.”
“To really be that lifestyle service that we pitch to our customers, we need to be in those markets so they don’t have moving costs between markets,” he said. “Their furnishings can grow and progress with them and their lives, whatever city or roommate or partner situation that the world throws at them.”
Fernish does not reveal its revenues, but Barlow said the company is on track to be profitable in its original West Coast markets this year.
Barron’s recently reported that Jefferies analyst Jonathan Matuszewski expects that spending for furniture rentals on direct-to-consumer platforms like Fernish will grow to $1 billion within five years, up from $150 million currently.
“We are at the beginning of a revolution in how consumers furnish their residences,” he said.
If that is correct, there will be plenty of room for Fernish to move into the New York market, and elsewhere.