Podcast Summary: How did 2025 change the design industry?

Business of Home Podcast
Host: Dennis Scully
Date: December 22, 2025
Guests: Caitlin Peterson (Editor in Chief), Warren Shoulberg (Retail Columnist), Fred Nickelhaus (Executive Editor)

Overview

This special year-end episode assembles the Business of Home editorial team to reflect on 2025's tumultuous events in the design industry. Host Dennis Scully is joined by Caitlin Peterson, Warren Shoulberg, and Fred Nickelhaus for a candid, wide-ranging discussion on tariffs, the housing market, retail shake-ups, design centers, and the explosive impact of AI. The group analyzes the sector’s challenges, the resilience of its players, and offers predictions for 2026.

One Word to Capture 2025’s Vibe

[03:09] Panel shares their "word of the year":

• Caitlin Peterson: “Tumultuous. This was a year of surprise pivots, abandoned plans, and just a lot that you don’t expect, but that you really have to recover from quickly to stay above water."
• Warren Shoulberg: “Lost. Coming into this year, I think everybody had pretty good expectations… and then wham, bam, no thank you, ma'am… It's turned into a disaster."
• Fred Nickelhaus: “The letter is ‘K’. There’s like a K-shaped economy where the high end continues to do really well and skyrocket, whereas the low end is going down like that little leg of the K."
• Dennis Scully: “Unbowed. Despite everything… they seem somehow remarkably unbowed.”

Key Discussion Points and Insights

The Impact of Tariffs

[05:41] Tariffs Continue to Loom Large

• Warren: Tariff fears haven't resulted in economic collapse, but caused "unprecedented chaos and confusion" for companies. The worst effects are likely deferred to early 2026.
• Fred: Uncertainty from pending Supreme Court decisions has delayed price increases. Many companies are “on pause or on the defensive." Real tariff effects are “yet to fully play out.”
• Caitlin: Designers burned huge amounts of energy dealing with moving targets on pricing: “A lot of time that you can’t bill for… nobody could just say I’m opting out of this one.”

Notable Quotes:

• “We keep pushing back the worst of the tariff impact… it really looks like tariffs are not around the next corner, but the corner afterwards.” — Warren [06:33]
• “I think the effect of the tariffs is really yet to fully play out.” — Fred [07:59]

[10:19] Sourcing and Manufacturing

• Fred asks: Will US-based manufacturing benefit from tariffs?
• Warren (firmly): “No. It’s unrealistic that this manufacturing is going to come back.” [11:10]

Housing Market Stagnation

[14:35] The Frozen Housing Market

• Warren: Housing starts are at record lows. “Anybody who’s in a house has no intention of selling because they can’t get as advantageous a mortgage. So it’s just this logjam."
• Fred: The “survive til 25 and then thrive” outlook fizzled. “Housing has been frozen… except the very top, 1%, who kept spending solidly.” [16:15]
• Caitlin: That split echoes in design firms—some thriving, many struggling, “a broad slice of the design community… is hurting right now.”

Memorable Moment:

• “If you’re at that thin slice at the top of the market, this was not a bad year.” — Fred [17:13]

[20:16] Home Equity Not Being Tapped

• Homeowners aren’t spending their built-up equity. “The equity is there and they've decided, well, if we're not going to sell… and you just haven’t seen it.” — Warren [20:23]
• Fred notes “consumers are as frozen as the brands” and that post-COVID fatigue may still play a role. [22:31]

Retail Winners, Losers, and Question Marks

[24:01] Retail Performance

• Wayfair’s stock up 114%—“the big enigma,” as their numbers are “less worse than they used to be.”
• RH down nearly 60%, but panelists remain bullish on their long-term potential, especially in European expansion.
• Williams Sonoma steady, but sector-wide skepticism on Wall Street persists.

Standout Quotes:

• “RH continually does things that nobody else does.” — Warren [27:21]
• “If you look at these stock results... it’s tough to pull a thread out of all of them because they really reflect where each company is at.” — Fred [28:01]
• “All of these companies… are relatively well-insulated. But independents are in trouble.” — Fred [31:47]

Design Centers: Evolution and Shake-Up

[33:27] Changing Ownership & Models

• Coen Brothers Realty lost control of two major design centers; control now down from four to two.
• Caitlin: New ownership has led to “reinvesting in people, in programming, in very basic things like flowers and plants, potentially restaurants, better climate management…”
• Fred: Ownership changes may erode “efficiencies” and may motivate further sales, possibly centralized under entities like Jamestown.
• Dennis: “There's a need for people to come and to gather and for product to be available… the design center model is one that seems to have a lot more legs to it than people would have imagined.” [36:00]

AI and Tech Disruption

[40:00] AI’s Industry Takeover

• Fred: The year that general-purpose AIs (ChatGPT, Gemini) overtook specialized design tools—“ChatGPT is pretty darn good at interior design, at visualizing…”
• Caitlin: Future jobs may be more about “asking the right questions” rather than having all the answers—AI will “reshape how we prepare for the workforce.” [41:57]
• Warren: Game-changer was Walmart integrating direct purchasing into AI—“a seminal change in the buying process and the consumer psyche.” [43:08]

Notable Quote:

• “Some surveys say up to 81% of designers use [AI]. I think next year… everyone will be using it.” — Fred [41:53]

Memorable News, Companies, and Trends

[44:55] What Will Stay with You?

• Caitlin: Insightful interviews with Duane Bergman on valuing and selling design firms; succession is “in the industry zeitgeist.”
• Warren: Macy’s showing signs of genuine retail turnaround—“the first shoots of some really good retailing.”
• Fred: Quince’s push into home and the “obsession with dupes”—he expects them to be a bigger player in 2026.
• Dennis: Designers’ evolving relationship with vertical video/social media—predicts move towards valuing portfolios over personalities.

Predictions for 2026

[50:22] Caitlin

• Hopes for “smoother sailing,” but predicts 2026 will be about taking “big swings” as companies revisit abandoned plans.

[51:47] Warren

• Tariff effects will hit “in the first half of the year… and that’s not going to be good.”

[52:43] Fred

• Predicts Charles Cohen will lose another design center in 2026.
• Every big furniture retailer will integrate with AI and click-to-buy features “except RH.”
• Renews (humorously) his running prediction that Houzz will go public.

[54:00] Dennis

• Predicts D&D Building will change hands; another Supreme Court ruling could end tariffs (with caveats); expects major private equity acquisition in the home sector.

Notable Quotes & Memorable Moments

• "Tumultuous… a year of surprise pivots, abandoned plans, and a lot that you don’t expect." — Caitlin [03:09]
• "There’s like a K-shaped economy where the high end continues to do really well and skyrocket, whereas the low end is going down like that little leg of the K." — Fred [04:09]
• "It’s unrealistic that this [manufacturing] is going to come back." — Warren [11:10]
• "Housing has been frozen… except the very top, 1% who kept spending solidly." — Fred [16:15]
• "But don’t underestimate Gary Friedman and don’t underestimate RH." — Dennis [30:41]
• "ChatGPT is pretty darn good at interior design, it’s pretty darn good at visualizing." — Fred [40:30]
• "We’re not teaching them to know the answers, we're teaching them to ask the right questions." — Caitlin [41:57]

Timestamps of Important Segments

• [03:09] — Panel’s "word of the year"
• [05:41] — Deep dive on tariffs: impact, Supreme Court, and future effects
• [14:35] — The state (and stagnation) of the housing market
• [24:01] — Public company retail performance: RH, Wayfair, Williams Sonoma, and others
• [33:27] — The changing landscape of design centers
• [40:00] — AI adoption and implications for the design industry
• [44:55] — Standout interviews, companies, and news stories from 2025
• [50:22] — Predictions for 2026

Conclusion

This panel episode is a candid, sharply observant analysis of 2025’s major currents in the design world: policy uncertainty, economic bifurcation, technological disruption, and profound shifts in retail and professional life. With realism and a pinch of optimism, the team looks forward to a year that, while uncertain, is ripe for bold bets and creative adjustments.