Wayfair Buys DwellStudio, Expands Retail Vision in Home Goods

Good time to check in on the Wayfair express. The Boston e-retailer, specializing in home furnishings, is one of the big innovation stories of the past decade. Wayfair (fka CSN Stores) is also the biggest venture-capital bet in New England tech, with $200 million raised, all in the last couple of years.

Today the company says it is acquiring DwellStudio, a home-goods retailer based in New York City. No financial terms were given, but Wayfair says DwellStudio will continue to operate as a stand-alone brand. And it sounds like DwellStudio’s design team will be tapped to come up with new product lines and lifestyle brands. DwellStudio’s 12 employees will stay in New York City, according to Wayfair.

I’m not generally one to shop for home goods, but DwellStudio seems to represent an emerging class of niche retail designers that combine sales through catalogs and the Web, but also brick-and-mortar stores. DwellStudio (which got started in 1999) has a flagship store in SoHo, and the company says its products—beddings, furnishings, decor, stuff for babies and children—are also sold by retailers such as Neiman Marcus, Nordstrom, and F.A.O Schwarz.

For Wayfair, this looks like a significant deal. It is the company’s first major acquisition, and it signals the e-retailer’s move into designing and selling its own proprietary product lines (not just other brands’). It remains to be seen how big a part of future strategy this is, but Wayfair clearly wants to be a one-stop shop for the home that everyone knows.

The company says it is on a $1 billion run rate for sales this year. And there has long been talk of a future IPO. Observers also wonder who could afford to acquire Wayfair at this point (Amazon? eBay? Walmart?). In any case, having a billion-dollar, independent e-commerce company in Boston has a nice ring to it. But I say it all comes to a head within a year.

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