We're thrilled to announce that there's been a return to double-digit growth—a phenomenon that hasn't occurred since 2001. The 2005 top 100 Interior Design Giants earned $1,610,057,477, a hefty 10.19 percent increase over last year, when a rise of little over 1 percent was considered cause for mild jubilation. As for who's responsible, four firms moved up from last year's second 100 Giants, another four returned after a short hiatus from any Giants ranking, and one seems to have come out of nowhere.
Compared with last year, when only 42 top 100 Giants reported expanded earnings, this year 70 of them experienced increases ranging from less than 1 percent all the way up to 73 percent. (Two companies reported no change.)
More than a third of those reporting increases credit an emphasis on business development, including new marketing hires, as well as publishing, speaking engagements, and community activity. Diversification and expanded services were each credited by 18.6 percent. Ten firms concentrated on maintaining relationships with existing clients, while seven each expanded into new geographical territories or focused primarily on the project types that have proven most profitable for them.
No one method, however, seems to be associated with outstanding growth. In fact, while some of the more assertive activity—getting out of ancillary businesses and markets that did not generate profits, for example—produced nice enough returns, one of the highest increases went to a firm that claims not to have changed its habits at all; it simply was commissioned more work.
As usual, office design was the largest single earner at 35.49 percent of total fees, down 2.22 points. Health care, perennially in fourth or fifth place, came in second with 13.25 percent of the total, up 1.77 percentage points. Hospitality, especially hard hit after 2001, is still in fourth place, but many of the Giants attribute their current success to a rebound in this area. And seventh-ranked science and technology is responsible for almost 6 percent of total earnings.
Total space installed was 514,428,655 square feet, up almost 1 percent from last year. The total value of installation was $38,795,444,794, up a sizeable 11.3 percent; $1,753,132,680 of these dollars—more than twice as much as last year—went toward sustainable products.
The average fee earned per employee climbed to $235,559 from $213,284; the highest was an astounding $1,285,714, a glorious increase from last year's high of $816,667 earned per employee. (The lowest was $63,966.) Interior design staff increased 4 percent, and a significant number of Giants feel that attracting top talent, mainly project directors and managers, will be a major challenge in the year to come. It's been a while since we've heard anything like that.
Methodology: The first installment of the three-part annual business survey of Interior Design Giants comprises the 100 largest firms ranked by interior design fees for the 12-month period ending December 31, 2004. The second 100 Giants firm ranking will be published in July; the final installment, listing the top 50 hospitality Giants, will be published in October. Interior design fees include fees attributed to: 1. All types of interiors work, including commercial and residential. 2. All aspects of a firm's interior design practice, from strategic planning and programming to design and project management. 3. Fees paid to a firm for work performed by employees and independent contractors who are "full-time staff equivalent." Interior design fees do not include revenues paid to a firm and remitted to subcontractors who are not considered the equivalent of full-time staff. For example, certain firms attract work that is subcontracted to a local firm. The originating firm may collect all the fees and retain a fee for management or generation, paying the remainder to the performing firm. The amounts paid to the latter firm are not included in the fees of the collecting firm in determining its ranking. Data was compiled and analyzed by Interior Design's market research staff in New York: research manager Wing Leung and tabulation supervisor Laura Girmscheid. Judith Davidsen is a contributing editor for the magazine.
