With the average first-time homebuyer's age increasing, Fernish knows many are caught up in the rental game, moving from place to place, chasing better prices or a new job. And since the company knows its customers are renting where they live, it wants them to rent the furniture they use.
Today, with its eyes on Texas, where the state has seen a multiyear long streak of resident inflow, like many Californians, the company is expanding for the first time beyond the West Coast to DFW, with plans for hiring and creating a logistics center.
“One of the reasons we're so excited to launch here is it’s just a magnet, and it has been the past few years, and it’s just increasing in many ways,” Michael Barlow, co-founder and CEO of Fernish, told NTX Inno.
The Fernish concept is fairly simple. Users select the furniture they would like from the company’s platform. The gear is then delivered, set up and assembled by Fernish’s team. If the user likes the furniture, they can buy it outright or rent to own. If they don’t feel like taking the furniture with them, they can have Fernish come pick it up or move it to their new place.
“If you think a couple of years down the line, you have Fernish as a service where people are able to move seamlessly and transition and try out new places and new things across many aspects of the country, and to make that as frictionless or as effortless as possible,” Barlow said.
Beyond providing convenience and flexibility to its customers, Barlow said the company is also looking to help the environment. By refurbishing the products it rents out, Fernish can keep furniture in circulation longer and out of the landfill. Barlow added that furniture is one of the least recyclable consumer products, with an average of 10 tons going into landfills each year. Once a piece of Fernish furniture has gone beyond what the company classifies as “like new” condition, it is donated to a local charitable organization.
“There’s definitely a mission-driven side of our business, which I think is important for every consumer brand these days,” Barlow said. “For us, it’s we put quality durable products into circulation to keep the cheap… build-it-yourself furniture from ever getting into circulation.”
Barlow said one of the main reasons Fernish picked DFW for its first expansion outside of its current service areas on the West Coast could be seen in the region’s skyline – cranes and construction sites building new commercial and residential real estate stock to accommodate a growing pool of the company’s core customers: young professionals. It also helps that Fernish counts North Texas investor and Director of Capital Southwest Jack Furst as a backer.
Because Barlow said, the company believes it’s important to provide customized customer service and understand each market's unique quirks, Fernish’s expansion comes with a DFW physical presence. The company already has four employees in the area and plans to ramp that number up to about 10 by next quarter as it moves into an about 20,000 square-foot logistics hub south of Frisco. Barlow said he has been in town for about a month, and plans for his own move and moves of other Fernish leaders to the region are not out of the question.
“Being able to handle returns and being close to the customer, that’s going to maximize the customer experience, which is critical,” Barlow said.
While the North Texas area has been on Fernish’s list of expansion areas before the pandemic, it may not have been the company’s first choice, Barlow said. However, as lockdown measures and health concerns have pushed some out of major hubs like San Francisco and New York and the rise of remote work has allowed workers to move more freely, DFW and Texas as a whole have attracted many workers and the attention of Fernish.
“When we recalibrated for our specific cohort of customers a couple of years ago you would have said San Francisco and New York were the one-two punch… but obviously there’s a lot of other cities that are less expensive, more attractive in many ways that also have their share of my target audience,” Barlow said. “Now, it’s like my target audience isn’t even in New York and San Francisco anymore. Why? Because when you take away the quantity of life there, so many people have left and said, “Hey, there’s amazing cities out there like Dallas… that I can have very comparable experiences. It’s totally changed how we’ve viewed the expansion of our business.”
Even before the pandemic, Fernish was growing fairly quickly. After launching its service in Los Angeles in 2018, the company expanded to the Seattle area. In 2019, the company closed on a $30 million round co-led by RET Ventures and Techstars Investments. When the pandemic hit, causing many to shelter in place, Barlow said the home furnishing business has been good, with the company seeing a triple-digit increase in its top-line consumer revenue. And with many working remotely, work-from-home furniture has been a growing part of Fernish’s business, with a 300 percent increase in demand, making WFH furniture some of Fernish’s top-selling items. The company also raised another $15 million round in 2020.
Locally, Barlow said Fernish had seen thousands already sign up for its platform. As it looks to continue its growth trajectory, the company hopes to expand beyond the seven markets it operates into the top 20 largest metros in the country over the next few years, with new products along the way. However, Barlow said Fernish plans to build its local presence before looking elsewhere.
“There’s definitely growth to be had, and we’re on the path to being a national brand, but really at our heart, we are a local brand because we have on-the-ground employees and on-the-ground logistics in every market that we operate,” Barlow said.
