“No Black Friday. No seasonal sales. No promotional pricing.” Earlier this year, Petrus Palmér, the founder and CEO of Hem, wrote these words on LinkedIn about his decision to do away with all discounts. This isn’t the first time Hem’s business model has changed course. Palmér founded the cult-favorite Swedish brand—known for its collaborations with some of today’s most cutting-edge designers—in 2014. It launched as primarily a direct-to-consumer brand, but that has since shifted. Today, the majority of the company’s sales come from trade and wholesale, something he says he’s happy with.
More recently, Palmér took to LinkedIn again, calling out Ikea for appropriating Hem X, the company’s platform for creative collaborations. Ikea’s new Konstrunda collection, offering affordable art objects by seven makers, recently launched. In a video call from his home in Stockholm, Palmér spoke candidly about the complexities of going up against a behemoth like Ikea, why proper attribution matters, and what it takes to build a furniture business for the long term.
This interview has been condensed and edited for clarity.
In the spring, you decided to eliminate sales. What prompted that decision, and when did it go into effect?
It went into effect immediately in February. What prompted it was a long time coming, really. I’ve never felt comfortable with discounting the items, and as the business has developed, I feel like we’ve gotten more proof that people are willing to pay full price, and that we’re actually better off maintaining the full price than trying to periodically discount them. There’s so much of that in this industry. If you’re a legit brand, a design brand, you need to build a lot of trust with customers, and discounting is just eroding that trust—both with consumers, but also with architects and interior designers and a lot of other people we work with. They’re not very happy about the inconsistency, and about the erosion of value that happens when you discount.
How has it played out since? Have you seen any change in sales?
The wholesale partners are applauding it. For them, it’s better—if we discount, they’re almost forced to discount. So we’ve been telling them we don’t want them to discount Hem unnecessarily. It makes it easier for them. But honestly, it’s definitely had an impact on our e-commerce and direct sales, which was to be expected. It was a calculated bet. That’s gone down. I don’t have the exact numbers, but it’s roughly what we expected. During those seasonal sales periods, we won’t have as much volume.
Are there any strategies you’re implementing to safeguard against that dip? Any way you’re operating differently?
What disappears are the customers who are perhaps not very loyal—and there are a lot of people, including myself sometimes, who want a good deal. So they probably won’t be as frequent. We’re more reliant on our loyal customers and the people who are fans of the brand, who aren’t there to make a good deal, but because they’re actually interested in the brand long term. So we’re more dependent on them now, and that includes a lot of B2B: The designers and architects who work with us commercially are a bigger portion than the consumers. That takes some of the risk away. The architect wants reliability and stability in pricing. They want to be able to specify the same item now and in five years again. They don’t like volatility in pricing. That’s why we’re prioritizing that group.
In terms of brand positioning, how has Hem evolved since your launch in 2014?
We emerged riding that original D2C wave. I’m a designer—I’d already spent about 10 years designing products. And for me it was exciting to see something happening that was really a change in behavior, because that’s what drives opportunity in design. To do a relevant product, you need some kind of behavioral change in society, otherwise you’re just repeating the same things. Something was changing, and we could be entrepreneurial about that and establish relevant design at a time when things were pretty stale, honestly. People did start shopping online, but there were also some false promises that turned out to be less sustainable over time. So we pivoted after a couple of years into being more of a traditional brand in terms of how we do sales.
We have partners now in wholesale and with retailers, and we do a lot of traditional B2B sales. E-commerce is still part of it, but I think a lot of those assumptions were, to some extent, incomplete from the initial idea of a D2C furniture brand, because they didn’t factor in that someone still needed to pay for the retailer, the middleman. There was a lot of talk about cutting out the middleman, and when that middleman was gone, the brand had to do it themselves. We had to pay a lot for inventory, shipping, customer service, marketing—which is the biggest part—and as marketing got more expensive and the cost base of a brand doing D2C got bigger, it didn’t look so good anymore.
A lot of brands went under. The ones that survived did so because they had a product that was better than what was already out there. We had a product that people wanted independently, whether it was sold D2C or through traditional channels. When we realized that after a couple of years, we became more comfortable and brave. We don’t have to have an innovative business model as long as we keep making really good products.
How do you think about Hem’s identity relative to other brands in terms of scale and reach? You once said you wanted Hem to be the “Ikea of the premier market.” Has that changed?
It has changed, and I’ve thought a lot about this. For me, scale and influence are two separate things, and sometimes they overlap. At one time we thought our influence could scale to a much higher degree than it could in the end. It’s not a finished story yet, but I think this was also a mirage of the pandemic; a lot of brands were seeing outsized growth due to factors that weren’t necessarily thanks to what they were doing. It was just because of what the world looked like.
Even before that, we had an idea about e-commerce as almost a shortcut where we could grow and gain more scale just by finding another way of approaching the market. That was true, but it was also very expensive, so it wasn’t very sustainable. When that door closed, we walked back from e-commerce as a primary growth engine.
This [Hem] isn’t going to be the size of a very big company. It’s going to be a smaller company, but the influential side still remains. I’ve thought a lot about this over the last 12 to 18 months, as the world has been in flux, and what I’m landing on is that the primary goal of any design company should be influence. Sometimes that can be paired with scale.
If you look at the biggest design brands in the world, they’ve found a moment in time when those stars really align. Look at Knoll in the ’50s and the office market—it exploded, and they were exceptionally good at design. Florence Knoll, in particular, had an amazing network with architects going back to the Cranbrook School [a historically and architecturally significant private school in Michigan]. But they also found a moment in time when scale was closely attached to their ideas of design.
So if you really just want to do furniture at high scale, you need more traditional business tactics: focus on price, focus on distribution. There’s a lot you can do if scale is your primary objective. But if influence is your primary objective, you’re probably going to be more diligent about what products you put out there, and I think that’s the better idea for a design brand. Of course, any business needs to focus on growth and financial health, otherwise it’s not going to be a good business.
For us, it was a liberating idea that we didn’t have to wear the coat of e-commerce and tech and growth. We could focus on working with the best people we could find and putting out really good products. What I found was a generation we could give a platform to, who were doing something interesting, a very different kind of design work than what we’re used to. When I started working with Max Lamb, Faye Toogood, or Sabine Marcelis—designers who are now becoming stars—they didn’t have a platform. They didn’t have a brand to work with, because they were doing something different.
We ended up being a design house for a new generation, which wasn’t the original idea. The original idea was this D2C brand—skipping ahead, being smart, being business savvy. Only when we stopped trying to be business savvy did we have our real success, when people really noticed us. It’s almost backwards.
Do you feel like you’re in a comfortable place right now? What’s the size of the company?
We do about $10 million. For a design brand, that’s okay. It’s far from Ikea, I’ll tell you that. But I’m pretty comfortable with this size, and what I’m more comfortable with is that we haven’t compromised. We haven’t built this to be a three-year, five-year thing. We built it to be a much longer thing.
This is a good segue to your post about Ikea’s new Konstrunda collection. You didn’t mince words. What specifically do you believe crossed the line into what felt more like plagiarism? And what’s been the response?
It was a jab. They’ve copied designs that I’ve done through my own work or through Hem’s work. They’ve copied friends of mine’s work. It’s not a controversial statement that Ikea has copied other designers. I’ve done designs for Ikea. The problem is that they are appropriating a lot of design under the assumption of it being democratic, and this is really what I take issue with, because democracy, in my book, has nothing to do with being able to access everything.
Hem X is a genuine workshop, trying to give back to our community and to champion designs and ideas that probably wouldn’t have been out there otherwise. Ikea has dabbled in affordable art before—it’s not necessarily new. It’s like if democracy is being able to access anything at a low price, then I want to ship a Ferrari. That’s not how it works. Some ideas are going to be niche. It doesn’t mean that everybody should have access to it.
What sparked that frustration is you don’t have to appropriate things that are not necessarily going to be better by being priced low. I think accessibility is a good ambition for a lot of things, but it isn’t the moral requirement for every object. Everybody shouldn’t have the right to everything just because it exists.
That brings us to the murky IP questions. How porous do you think ideas actually are in furniture design more broadly, and where do you draw the line between “inspired by” and “copied”?
It’s an impossible line. There are proper copies, of course—one-to-one, and you can chase those, pursue them legally. But “inspired by” is impossible. We see copies of our products all the time, and we take them down when we can. We always send cease-and-desist letters, and sometimes we go further. It’s very hard territory. We’re pretty generous; if anyone has done their homework and understands, “okay, this is close to something,” and they’re open about that and why, it’s generally never a problem. Humanity works that way. We borrow from each other. We build on each other. It’s fine—we’ve done it too. That’s not an issue for me. The issue comes more when people are disingenuous about why they’re doing it.
Does it feel like they’re encroaching on territory they shouldn’t be?
It’s not my place to tell them where to be, but I think they should be better with their footnotes, as I wrote in the LinkedIn post. If you’re actually borrowing from someone, or being inspired by something, you should say that you’re doing that. Don’t pretend it didn’t happen before.
It’s a dangerous thing to optimize for price. I’ve thought a lot about this. I actually started a small research project about it, called Small Futures. You can look it up. The whole idea of modernism—the promise, as Eames said—was “the best for the most for the least.” You’d bring the middle class to a better place by leaning on industrial manufacturing and scaling, producing higher-quality products for more people at a lower price. Ikea has excelled at that. And now there are others excelling at it, too. You’ve got several players in the Nordics, Chinese players and others undercutting Ikea, doing it in ways I don’t respect. There’s a lot of inferior quality, inferior materials, inferior working conditions. Taking something—an artwork or a design product—and engineering it to be less good is, for me, not consistent with having the right intentions.
Modernism has succeeded to such an extent that we’re now getting anything at any price, but that abundance isn’t good. It’s not giving people a better life. You could argue it’s giving them a worse one, to some extent. There’s a tension here that I’m really starting to push back against. It’s not like people are at a lack for more chairs; there’s an abundance of chairs. But more authenticity, more genuine intention—falling in love with something and buying it, keeping it for a long time, cherishing it, maybe repairing it—these are things that have had very little value for a long time. They’ve been engineered out of that scale proposition, and that’s something we need to start looking at. I think that’s the only way.
Not to say we should go back to living in cottages.
Right—also the environmental impact of that accumulation of all these things. How do you feel about where you stand now, and what do you have coming down the pike?
Hem has been able to establish this idea of being a design house for this generation, which I’m very proud of. The designers we work with now—Max, Faye, Sabine, Kwangho Lee, FormaFantasma, Philippe Malouin—some of them are doing their best work right now. I want us to be a platform so they can keep doing work with us. We’ll put out more items that have real authorship. We launched a chair with Max Lamb just before summer—it’s an unusual item, but something only he could have done, and I think only Hem would have put it out. That’s what we’ll keep doing: give these people a platform, help give them a voice. It’s a small ambition, and that’s fine with me.