Looking for the most up-to-date list of the top retail design firms? Check out our 2013 Retail Design Firm Resource Guide.
What a difference a decade makes. When the first-ever Top 50 Retail Design Firm survey appeared in VM+SD‘s February 1995 edition, theatrical or entertainment retail – as epitomized by the Warner Bros. Studio Stores, the Disney Stores and the Rainforest Cafés – was driving the design conversation.
But such stores enjoyed only a relatively brief period in the spotlight, fading from view as the go-go business climate of the late 1990s gave way to the sluggish economy (and corresponding downturn in store-construction budgets) of the new millennium.
“Like all good entertainment, theatrical retail needed to constantly reinvent itself,” says Ken Nisch, chairman of JGA Inc. (Southfield, Mich.), the latest survey’s 22nd-largest contract design firm. “That didn’t happen in many cases, thanks mainly to such corporate issues as tighter budgets, mergers and shifting competitive strategies. But the advent of themed stores, which were centered around licensed merchandise lines, eventually evolved into the concept of experiential retail at such places as Starbucks and Pottery Barn, where the store environment is designed to help create a strong sense of place that reflects and reinforces the retailer’s brand.”
In reaction to the rise of experiential retail and the ongoing economic downturn of recent years, many firms in the contract design industry have taken to concentrating on one of two main specialties, Nisch says: creative or executional services. “We live in an age of specialization, and our industry is no exception to that,” says Nisch.
Creative-oriented design firms, he explains, help in producing store environments that communicate brand identity through the use of industry research and brand analysis to develop distinctive layouts, displays, lighting, sound systems, etc. Executional design firms, on the other hand, are typically hired to assist in value engineering and other operational issues associated with building a space quickly and efficiently.
FUTURE DIRECTIONS
Nisch places his own firm in the creative category. Concentrating on that niche means JGA’s revenues have not undergone the explosive growth experienced by some firms in the industry. Indeed, in the first Top 50 list, Nisch’s firm – which in 1993 created the award-winning, prototypical Warner Bros. Studio Store on 57th Street in New York – ranked seventh. For the 2004 version of the list, JGA is in 22nd place.
Nisch says he expects to see more firms widening their client base to include auto dealers, financial services and health care providers. “With ongoing consolidation in the retail industry, it makes sense to branch into those sectors, all of which are becoming much more receptive to the idea of building their brands and reinforcing their identities within their built environments,” he explains.
While JGA has stayed about the same size over the past decade, this year’s Top 50 list shows that’s clearly not the case with many other firms. The latest rankings are topped by Callison (Seattle), which reported fees of just under $48 million for 2003 – up from just $12 million (and a third-place ranking) in 1994. Similarly, Pavlik Design Team (Fort Lauderdale, Fla.) – which topped the first-ever Top 50 with retail design fees of $20.4 million for 1994 – reported design fees of $40.2 million for 2003. These top-tier firms have grown in the face of the economic downturn of recent years by adopting such strategies as venturing into overseas markets and seeking out major renovation projects.
Many smaller players in the industry have also found ways to get bigger. In the first rankings, the three firms tied for 50th place reported design fees of $100,000. In this year’s list, it took at least $335,000 to make the cut. Even accounting for an overall inflation rate of 20-plus percent in the U.S. economy since the Top 50 list first appeared, it’s clear many firms within the contract design industry have found paths to growth.
A number of design firms are growing by striking out in a new direction, creating strategy and research departments that offer retailers business and financial analysis as well as branding strategy and design consulting. For a look at one design firm’s initiatives along those lines, see VM+SD magazine, March, 2004, page 54.
LAW AFFECTS LISTINGS
Another change having a major impact in the industry is the purchase of several design firms by large advertising and branding consultancies in recent years. The Sarbanes-Oxley Act of 2002 limits financial disclosures by companies’ individual operating units.
As a result, three high-profile design firms – Fitch (Powell, Ohio) and Walker Group/CNI (New York), both of which are owned by London-based WPP, and Fame (Minneapolis), a unit of New York-based Omnicom – are now prohibited from releasing financial data about their operations, and therefore cannot be ranked. (Contact information for those three firms can be found at the end of the Top 50 listing.)
The survey is conducted annually to provide an overall picture of the retail design industry and to highlight the achievements of the individual firms. The respondents were ranked according to their reported design fees for retail projects in 2003.
To view a Ranked List of the Top 50 Retail Design Firms, click here.
To view an Alphabetical List of the Top 50, and a list of all companies that responded to our survey click here.
A ranked list with comprehensive contact information for the 64 firms (including ties) that made the Top 50 list, can be purchased by ordering a copy of the VM+SD magazine, March, 2004 issue. To order a back issue, click here.