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Business of Home Podcast
The Thursday Show: Designers join the wellness revolution. Plus: Artemest preps for a big Milan Design Week
01:01:29
Host Dennis Scully and BOH executive editor Fred Nicolaus discuss the biggest news in the design world. Later, Artemest CEO Marco Credendino joins the show to talk about the brand's plans for Salone del Mobile.
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- [00:07]
A
This is Business of Home. I'm Dennis Scully, and welcome to the Thursday Show. Later on, I'll be speaking with Artemis CEO Marco Credenino. But first, we're going to catch up on the news, including the rise of AI consultants, a check in on tariffs and inflation, and how designers are capitalizing on the wellness revolution. To do all that, I'm joined by Business of Homes executive editor Fred Nicolas. Hi, Fred.
- [00:33]
B
Hi, Dennis. How's it going?
- [00:35]
A
Great. How you doing?
- [00:36]
B
Doing good. Happy tax day.
- [00:38]
C
Yes.
- [00:39]
A
Yes, indeed. You get them filed?
- [00:42]
B
I got my extension filed, so in a manner of speaking, yes.
- [00:45]
C
Good. Good for you.
- [00:46]
A
Put it off for a little while.
- [00:48]
B
Exactly. Put off that refund. We should quickly say that we're on the brink of going every which way around the globe. I'm going to Italy. You're going to North Carolina. Next week, Caitlin will be filling in for me. So this is the last show for a bit that we'll be recording under normal circumstances. Let's try and keep it nice and normal this week.
- [01:09]
A
I'll try not to get overly emotional, Fred. That soon we'll be going our separate ways.
- [01:13]
B
Yes, exactly. I'll be headed to Salone, you'll be headed to High Point, and I'm sure we'll have lots to talk about when you get back. But in the meantime, let's talk about Monday's episode of Conversation with kitchen designer Sarah Robertson of Studio Dearborn. But not just her, her son Owen as well. And it wasn't just any old conversation. You joined them in their kitchen, is that right, Dennis? Or where were you guys?
- [01:33]
A
Yes, yes, indeed. Dennis invited himself over to their house. I saw that they were nearby in Westchester, and I said, hey, you know what would be fun is if I just came over. And they said, great. They had built a studio where Sarah does a lot of experimentation and development in their former garage. And so we recorded in person, as you say, Sarah and her son Owen, who had just recently joined the company after graduating from college. And it was a fun conversation hearing about a small but mighty kitchen design operation with just the two of them.
- [02:13]
B
It's a fun story, too. I mean, I think there's not that many people who start as a McKinsey consultant end up being a kitchen designer. And so that was kind of fun to hear about that. I think having that background, having this sort of business and law background gives her really interesting sort of systematized, methodical approach to putting a kitchen together. There are lots of fun little takeaways. I like the point she made about How? You know, because clients come into the process not really knowing how to talk about what they really want and being so overwhelmed by the choices. She starts with the function part first, like, let's make sure we have a kitchen that actually works. And then moves on to the aesthetics, which I think is really smart. I mean, I think so many designers struggle with that simple question of, like, knowing how to communicate effectively with a client. And I felt like she had a really good solution for it.
- [02:57]
A
Her mind works in such an interesting organizational way and she's so thoughtful about every component of the kitchen and where and how it could live in a way that is going to serve you well when you need it. It's sort of a combination of a wonderful sort of left brain, right brain design that she brings to it. So aesthetically they're so beautiful, but they're also just really thoughtfully constructed. And I think that that is what so many people find so compelling about what she designs. It's those videos of her opening drawers and just sharing hidden paper towel holders and lots of ways that you can just organize your life in a way that perhaps you never imagined you could in the kitchen is what I think has led to so much of her success. Again, despite this pretty small operation that
- [03:55]
B
she's running, I know she's inspired me to try and find a place for my tongs in my kitchen. That's always my struggle. Never can find those tongs.
- [04:02]
A
I'm sure Sarah could help you with that, Fred. I think people really enjoy the episodes. I know many people have written to me saying what a fan they are of her already, so I'm glad about that. I hope people enjoy it. All right, we're going to take a quick break and then we'll get into the news. This podcast is sponsored by Leloy, a family run company creating rugs, pillows and wall art with a focus on lasting design and term partnerships. It's April, which means High Point Market and Laloy is introducing a range of new collections, including a standout collection that's been in development for years, along with new launches from Rifle Paper Co. Plus pillows and wall art. It's all part of Leloy's continued investment in product, in service and in making things easier for their trade customers. With dedicated sales reps, showrooms across the country and a seamless website experience. You can learn more and connect with a sales@loloirugs.com that's l o l o I rugs.com this podcast is sponsored by Chelsea House, who invites you to discover found a new 80 piece collection by well loved designer Eric Ross. See Eric's refined yet approachable design sensibility expressed in furniture, lighting, art, accessories and mirrors. Experience the anticipated debut April 24th through the 29th at Chelsea House, 200 N. Hamilton St. In High Point. And we're back. First, we're going to take a look at some headlines from the past week, starting with an acquisition. Fred.
- [05:51]
B
And a big acquisition. Somnigroup, the parent company of several major betting brands, acquired components manufacturer Leggett and Platt this week in a $2.5 billion deal. We talked about this before. A lot of people thought it would happen, and indeed it did happen. What do you make of this?
- [06:06]
A
Well, it's the end of an era, Fred Legged and Plat. We'll talk about the meaning behind all of that. But first, should we talk about somnigroup, not one that perhaps everyone is familiar with.
- [06:20]
B
Yes. Around the country people are saying, honey, wake up. Somni Group acquired Leggett and Plaid. Yeah, so Somni Group is kind of like the mattress Death Star. It's like a big agglomeration of mattress companies. Tempur Sealy mattress firm, they own, I don't know all these, Matt. I don't even know. But they're a huge mattress giant. And Leggett and Plaid, of course, is the company that makes things that go inside other things. Somnigroup was one of their biggest customers. And so that's kind of how this acquisition came about is Somnogroup bought a lot of stuff from Leggett and Platt. Leggett and Platt's stock price was kind of in the tank, and so they took advantage of that to make a big acquisition. So that's kind of the backstory for why this is happening here in terms of what it means for the industry. I mean, I don't think this is really going to trickle down to the average design firm. I don't think suddenly mattresses are going to double in price or, you know, nothing like that. But certainly a lot of High Point executives who buy a lot of their components from Leggett and Plaid are going to be eyeing this move, kind of going like, okay, so one of my main suppliers for the stuff that goes in my furniture is now owned by this mattress giant. What does that mean for me? So this is a big deal, even if the average designer is not necessarily going to notice anything different tomorrow.
- [07:32]
A
I very much agree. I mean, again, we've talked about Leggett and Plaid in the past. It's impossible to Stress enough how so many companies use so many components from this company. Chances are if you've bought a recliner from just about any brand, that mechanism came from Leggett and Platt. And this is a, what was once a really giant company. I think the peak market capitalization was close to $7 billion compared to the 2.5 that it's going out for. It's a sign of the times that a company like this is going away for a much reduced than it once was.
- [08:11]
B
There's going to be other deals like this, maybe not quite of this size, but I think it reflects the fact that this is a time of consolidation in deal making and companies being in some level of distress, so Legget implied isn't going away, they're being acquired. The brand name will still exist and presumably for the near future. It's not like everything's going to change, but it's a sign of the times. It's funny, ironically enough, this week there's also news of this big foam shortage that's popping up because of this one chemical that's in short supply. So even though these things are not necessarily the things, these are not news stories that make interior designers jump out of bed in the middle of the night worrying. They do have trickle down effects and I think we'll see signs of it subtly in the years to come.
- [08:51]
A
Well, and I think this also makes me think of the conversation you and I were having last week about many designers have no idea just how challenging a time it's been for so many manufacturers. And it's easy to overlook that. And this story just speaks to that. Both the time that we're living, living in and the challenge that the industry has been facing. And you're right, consolidation will certainly continue. Moving on, we're gonna talk about inflation. Another happy subject. Consumer prices were up 3.3% last month compared to a year earlier. The highest reading in two years. And there are a lot of things driving this, but where should we begin?
- [09:30]
B
Well, there's one big thing I think that's driving this. Yeah, I mean this is downstream of the war in Iran, fuel prices going up so much. I mean those Gasoline prices jumped 18.9%. Fuel oil surged by 44.2%. And if you want to find the thing that when that goes up, everything else goes up, it's oil. So I think a lot of these numbers are just a simple reflection of that. And probably next month's numbers are going to show that as well. Because this of course is only capturing the data from March and oil is still zigzagging up above $100 a barrel. So there's lots going on here. But that is certainly the prime Dr. What did you make of the numbers looking at our favorite piece of nerdy data, the cpi?
- [10:16]
A
Well, I mean, I think that it's for all of the conversations that we've had recently about how tariffs many designers said to us, oh, they really haven't impacted our business. And other news that we talk about regularly doesn't seem to have dramatically altered, but inflation and how much more expensive so many things in our daily life and so many things for designers has dramatically altered how much it costs to bring a project to fruition and I think is altering the choices that people are making and the design that is happening as a result. Because inflation has just been run away for years and clearly these recent numbers suggest that it is not under control in the way that I think many people were hoping it would be by this time.
- [11:11]
B
Yeah, it's really hard to say, right. Because we would have this conversation so often it's like, oh my gosh, inflation's crazy. But then you talk to a designer who's working at the high end of the market and they're like, well, it's $100 more. My client's just going to pay it. And I think that is kind of the lived reality for a lot of people listening to this podcast is that a little bit fuel increase here, a chair costing $100 more is not going to make or break anybody's day. But as these numbers really accumulate over time as you' change the makeup of a project, I mean, we were talking recently to a designer for an article, I actually forget which one it was. And he was saying about it's just that you just get less for your money. So maybe he's making the same amount of money. The budget for the project is the same. It's just there's less stuff that goes into it. And so designers kind of have to adjust around that and figure out how to make a project work. Then of course there's kind of like the dominoes that fall because of higher inflation, which is that this has a knock on effect for the housing market. And do you think this makes a is it basically totally unrealistic that the Federal Reserve is going to cut rates in the rest of the year? What's sort of the chatter on Wall street about that?
- [12:13]
A
Unfortunately, to your point, Wall street has begun to predict that we're not going to see rates coming down in nearly the aggressive fashion that we Once thought they were. Perhaps a new Fed chairman comes in and they give him a break, and they let rates come down by a quarter. Here's a picture. They say, welcome to your new job. Exactly. But beyond that, there's really no clarity that, again, that the back of inflation has been broken. These numbers are so conflicting month to month. Nobody can say in a decisive way we have this under control. It's smooth sailing. We can aggressively lower rates and bring mortgages down below 5% or even anywhere near 5%, which is what the industry is so hoping for.
- [12:56]
B
I don't want to be negative. I'm sure people will continue to move. They have to. But I do think there's just no clear good news with the housing market. Bad indicator. And I think people have to sort of buckle up and get ready for the reality that there might not be a big cut that completely turns things around.
- [13:15]
A
This is the lower expectations show.
- [13:17]
B
Yes, I know, I know. Well, we're coming up on a positive item.
- [13:20]
A
And who thought this might be some good news? Fred. Wait for it. Tariffs.
- [13:25]
B
Yes. The deadline for the U.S. customs and Border Protection Agency to debut its refund system is fast approaching. Who would have thought we'd be talking about tariffs and people would be getting money back? And guess what? It's as soon as next week. It's April 20th is the supposed deadline. It's weird it's coming up so soon, but I feel like people don't actually believe it's gonna happen.
- [13:45]
A
Exactly. First of all, I don't know what to wear. I mean, April 20th is gonna be here before you know it. I haven't planned my outfit. But more importantly, every executive that I ask about this says, is it really gonna happen? Are we really gonna get this money back? I don't know. Everything changes all the time. The rug constantly gets pulled out. So I think it's Lucy with the football, and nobody really. But clearly this is moving forward.
- [14:10]
B
It is. And I mean, the agency says It'll take between 60 and 90 days to deliver refunds. Maybe that'll get stretched out. Maybe people won't be as compliant or eligible as they think they are. But when you talk to executives at High Point and other people who import from overseas, people have paid tens of millions of dollars over the past year to bring their goods into the US Whether they get all of their money back, you're talking about getting a really huge check if this. Indeed. And I think that some of the executives. Dennis. Not to put them on the spot, but when you ask them, I think part of the reason they try and deflect the question is that it's a little bit awkward to have raised your prices a little bit and charge your customers more and then get $5 million from the federal government. I'm sure they don't want their customers to think like, hey, you want to maybe kick me some of that 5 million? It's a weird situation, and I really wonder what the etiquette of it's going to be when these people actually do ideally get these refund checks. What you do with it is a really interesting. I don't want to say dilemma, but it's an interesting situation.
- [15:10]
A
Well, it is, and I think you're absolutely right that the CEOs are very sensitive to that. I think they're downplaying it understandably for now, because it is going to be an awkward situation when they perhaps get all this money back. And yet the consumer, or the designer in this case has paid whatever the added prices were. And I doubt that any of them, and I don't know what you think, but I doubt that any of them are setting up their own refund programs to say, hey, let me help you out, because I just think that would be disastrous on a host of levels. But what do you think?
- [15:47]
B
Yeah, well, I don't think designers should expect a check from their vendors necessarily. It'd be nice, but yeah, I don't know. I mean, it's a weird situation. I hope people get a ton of money back. I hope they reinvest in the company, and I hope maybe that money can trickle down to designers in some form or another. But we'll certainly be reporting on it more if and when it actually happens.
- [16:07]
A
I hope that we just see a lot more wild parties at High Point, and we'll know the companies that got a lot of the money back. What was Warren's indicator at one point? Was it the shrimp indicator?
- [16:16]
B
Like if they had the mimosa indicator? Exactly.
- [16:19]
C
Yeah.
- [16:19]
A
So I think there's like a great
- [16:21]
B
Gatsby style party at High Point, right? We'll know. We'll know who got a refund.
- [16:26]
A
If there's a dramatic improvement in the hors d', oeuvres, we will know. And I look forward to that. In the meantime, let's talk about AI, shall we? This week, boh's Aidan Taylor wrote about the growing community of consultants who are helping designers navigate artificial intelligence. And people are lining up to help designers. Fred, what do you think?
- [16:46]
B
Yeah, this is an interesting phenomenon, and I think Aidan's article is spot on. I Feel like there isn't a day that goes by when on Instagram, I don't see, like, a new kind of AI for interiors or AI Frontier designers, or, like, a new coach offering consulting services around AI. And so, you know, he went looking and spoke to a lot of these coaches and found out, like, what they do, how they help designers, what the demand is, how much they charge, all that kind of stuff, and put together a great article for the site. It really is a cottage industry. I don't know if you've seen the same in your own social media comings and goings.
- [17:17]
A
It's exactly the same. Every time I open it, it's, hey, we're going to help you. Did you know that you could give Claude your entire operation? Yes, exactly.
- [17:25]
B
Yeah, yeah.
- [17:26]
A
Claude is your best friend. That's the message that I get every time I open Instagram. Don't be afraid of Claud. What I love is that it's designers helping designers with this. And that, I think, is an interesting element. Hey, I've been where you are and I've figured some things out, and let me help you.
- [17:45]
B
Yeah. And it makes all the sense in the world, right? Because I think there's so much hype about AI, but it's mostly coming from Silicon Valley, and probably they're mostly thinking of consumers. And so I think designers may see some of this stuff and they'll go like, okay, so it can do my job for me. But. But then they kind of turn it on, get it fired up, and there is a learning curve, and it doesn't work. Whereas if you are a designer who knows what the workflow is like, knows how the business works, knows what the bottlenecks are, in a design firm, you can set up Claude and other tools to actually help your fellow designers put AI to good use. It can be expensive. And I was sort of surprised at some of the numbers that were getting tossed around. There weren't specific prices in the article, but certainly it can cost several thousand dollars a month to have an AI coach work really directly with you and help integrate it into your firm, AI into your firm, rather. And so this can be expensive for designers. The fact that there is such a demand for it to me indicates that, A, for a lot of people, it's worth it, and B, we talk. It seems like every six months or so about how there's a new AI adoption statistic in the industry. It's 30%, it's 60%. And I think a lot of people are looking at those numbers going like, well, I need to be ahead of this, and I don't have the time to sit here and figure out how to use this. I'll just pay somebody to make it work. And ideally they do.
- [18:56]
A
And do we think that this is a moment in time, attempt temporary blip where there's a growth in this industry as we. To your point, we help onboard a lot of these designers who might not have yet tried, who might have been on the fence for a host of different reasons, whether it's their own comfort with technology or just lack of time to really deal with it.
- [19:20]
B
The weird thing about AI is that it's the first technology we have that explains itself to you. A blender doesn't tell you how to use it, but you can literally go into Claude and say, hey, hey, here's how I work. Can you come up with ways that you can help me do my job better? I was always a little bit perplexed at the fact that this is such a booming thing, because if you really want to sit down with these tools, you can literally just say, hey, explain to me how I can use you, and it'll tell you. But I think it's a question of who has the time to really do that. And I think that there's value in just having someone jump you ahead a few steps, weed out the technology that's good from the technology that maybe is just bells and whistles. I don't know. Long term, I think AI is going to be as common as Microsoft Word, and we don't have Microsoft Word consultants. But I think there's a lot of distance to go from here to there. And I think these people are doing a legitimate service. I will just say, though, if you're interested in these tools and you have the time and energy to figure them out for yourselves, I think you are more than capable of it. This is not impossibly complicated technology to use.
- [20:19]
A
No. And I think the big message in all of this, and I think so many designers try and impart this message, is get on it, learn about it, explore it, experiment with it. And I think part of what this article speaks to and what so many of these coaches are doing is just help to lower the fear. There's been a lot of speculation recently that perhaps the CEOs of some of these big AI companies are spreading fear intentionally to create sort of more drama and have incorporated fear as part of their marketing efforts around that. I don't know what your take is on that, Fred, but I do think there is a lot of confusion and anxiety and truthfully, people in my own household, when I've helped them to use AI, have marveled at the tool and are delighted to have discovered it. And I'm guessing the same will be true for many designers who have been on the fence.
- [21:18]
B
Yeah, it is a funny marketing tactic for Silicon Valley to be like, our product is so good, you should be scared of it. But I mean, you do hear that. I mean, and look, we could have a very long conversation about is it really wise to have AI do so much of your job? Because then at what point does somebody else just have AI do your job for them? But I think at the moment, the smart thing to do is just get on board. Figure out how to plug these tools into your system in a way that works for you. I'm sure there's some people out there who have ethical opposition to this. I totally respect and understand that. But if you're curious and you're interested in, I think there's a, a lot you can do on your own and B, there is this industry of coaches that can help you out. So there are options here.
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A
Yeah, indeed. And I hope, if nothing else, this leads people to explore AI more. In the meantime, let's move on to talk about some drama in the world of logistics.
- [22:10]
B
What could be more exciting? Imagine me pitching this article saying, guys, it's a very exciting thing in the world of logistics. But you. Yes. Last week I wrote about what happened when a company that handles operations for some of the industry's top indie brands suddenly shut down, leaving them in the lurch. And it was quite an ordeal for the companies that were using this particular 3PL service. But I recognize that the world of logistics is not the most glamorous thing we talk about. It's no Somni Group acquires Leggett and
- [22:37]
A
Plaid for sure, but it is such an important story and it's such an important component of the back of house operations for so many of these businesses. And perhaps we don't about it enough and we should explain what three PL providers do and what they are and why this. Why this is so important.
- [22:57]
B
Sure. If you've never heard 3PL, consider yourself lucky. 3PL means third party logistics provider, essentially. And what it means basically is that if you're a company that sells things to anyone, but certainly to designers, you have to find some way to get your product from you to them. And obviously when you're first starting out, most people just pack it up and ship it themselves. If you're working at a relatively small scale, that works Great. At a certain point you're just doing too much shipping if you find some success. And so you need to get your stuff into a warehouse and get somebody else to ship it for you. And usually there's sort of this intermediary stage where you're not quite big enough to buy your own warehouse and hire your own staff. You need somebody else to do it for you. And that's what a3PL is, a third party logistics provider. And so it's a very treacherous thing because for a lot of sort of small design oriented brands, they have a kind of product that is almost uniquely, perfectly suited to be bad to work for 3pls, it's complicated, it's very delicate. There's a lot of different SKUs and a lot of 3 PLs are set up to send out like 1000 toothbrushes a day. And so this is a really consistent pain point for a lot of these companies. And it's really dangerous because you're basically giving, you know, you're giving a bunch of guys in a warehouse you don't know that well your entire life savings worth of product and hoping it makes it to the designer on time. So it's a very, it's boring or kind of unsexy, but it's very important and it's very fraught for these companies.
- [24:19]
A
Exactly. It's such a crucial component. And the more complex your product is, the more items that need to be picked off of a rack system or whatever the infrastructure is within the warehouse, the more picks and the more components and things that have to be placed together, the more opportunity there is for things to go wrong and for these businesses to not be able to control what actually goes out to a client or customer. Businesses rely on these operations a great deal.
- [24:53]
B
They really do. And it's such a good point about the individual items. There's this guy, Robert Shukrachand, who has a company called Pernbon that's based in Thailand. His most popular product is a light fixture where you can actually choose the individual slab of marble that backs the light, which is such a cool thing that you can do. But. But then that actually requires a guy in a warehouse to get that slab of marble out. And this is a guy who's probably used to sending out, I don't know, DVDs or whatever it is. So it's very difficult. And this story is about this one particular company. It used to be called Manifest. And it was actually started by some people who were kind of roughly in the design industry before, but they Sold the company last year. Everything got transferred to Las Vegas. There was this entrepreneur who took over the company and renamed it to Haven't. And to be honest, I never really found out exactly through my reporting what happened behind the scenes. But he clearly hit some hard times. And the beginning of this year, in March of this year, he basically told several of his clients, we can't service you as a customer anymore. And so for this guy Robert, who's based in Thailand, he had to fly from Thailand to Las Vegas, a 35 hour flight, not really knowing was on the other side of it, and got there and opened up the warehouse and physically got the stuff himself. So, so it became a real. It seems like sort of, oh, well, you know, my shipping company's going out of business. What can you do? But it's a really, it's a very dicey situation. And you know, a lot of these brands kind of got out by the skin of their teeth. Have you ever dealt with this before? Dennis, I know you have a long, sordid past as the operator of a Scandinavian furniture store. Did you ever have any drama like this in your own three pl dealings?
- [26:23]
A
A lot of drama. And it's so hard again when you are turning over. And in your story, I so related because there was a fellow that talked about his life saving basically being tied up in these, these cardboard boxes that represented this inventory in his business. And I, I too once had all of my life savings that sadly is gone today, wrapped up in the, in the inventory of my Scandinavian furniture company. And when you would visit another warehouse that was storing some of your. Of your product and see the level of disarray that other people managed their warehouse facilities in, and the lack of care that people were taking and the damages that can so easily occur with rosewood or teak and any number of things. So yeah, it was a story that brought back a lot of sort of post traumatic stress for me and a reminder that particularly as you said earlier in the early days, when you can't afford to control all of that yourself, you don't have your own drivers, you don't have your own warehouse facility, and so many other people need to do that, that for you, you have to turn over your trust and your faith and your fortune to these people. And so when they start to have shipping problems, you wonder, are they about to go out of business? What's happening? And you also lose control over that last step of being in front of the client. That experience of the final delivery is your biggest and best chance to make a Great impression and often it's out of your head.
- [27:58]
B
And I think it speaks to sort of the Amazonification of commerce. Everyone thinks it's so simple and someone just shows up at your door and hands you something. Why can't it be that way for this super cool light? But I think when you see the guts of how the system works, you realize how complicated it is. And if you want these small, cool, creative brands to thrive, I think we all have to have a sense of grace about the vulnerability that they have when they're working with the three pl. And I also think it's an opportunity. If there's anyone listening to this who wants to get into the exciting world of third party logistics, I feel like if you can set your business up working with brands that have these specific needs, so many of the people told me I would pay much, much more if you just are careful with my stuff and you find that one slab of marble. So I know that's maybe not the coolest opportunity out there in the world, but I think there is a need for it. So maybe somebody will come along and solve that problem.
- [28:47]
A
So there is an opportunity, not for me, but for someone who wants to take this on.
- [28:52]
B
Any Claude can do it.
- [28:54]
A
Exactly. Hopefully Claude will be making all that easier soon. Next up, we're going to talk about wellness. So last week our producer Caroline Burke wrote about how designers are responding to a spike in demand for health conscious homes. They don't want smart homes, Fred, but they do want health conscious homes.
- [29:14]
B
Exactly. Get that screen out of here and get that red light projector. Get that meditation pod in here. I mean, this is a really big business. I mean, Caroline shared some stats in the article and it was a 6.8 trillion that's globally, but $6.8 trillion business in 2024 projected to reach 9.8 trillion by 2029, which is just crazy growth for any sector of the economy. And I think we were talking a few weeks ago about how there was a study showing that in the American retail world, more people are opening up spas and salons and fitness studios than they are like retail storefronts, like stores that sell stuff for the first time ever. And so this is clearly a huge, huge movement. I think everybody knows that. It's maybe not crazy news to say that wellness is hot, but it's really showing up for designers. And Caroline's story was a good survey of the landscape. I'm curious, why do you think this has happened? We've always cared about surviving and thriving. Why is this so hot right now. I'm just curious what your take on that is.
- [30:13]
A
Well, I think there's a whole range of issues. So remember when the cosmetics industry started to have this boom when everyone suddenly had to be on Zoo Covid and then everybody started to want to alter how. How their face or perhaps other parts of their body started to look. And then the GLP1 Nozempic craze started to take hold and then this, this aging of the baby boomer generation and people facing their own mortality, they have the vast resources to perhaps slow their aging process down. And they're wearing an aura ring that tells them how well they slept last night or didn't sleep last night. And so there's just a whole. There's a whole host of issues, not the least of which is podcasts, Fred.
- [31:02]
B
That's the main driver.
- [31:06]
A
Exactly. Wellness podcasts and the power of the Dr. Ubermans and the others that have just told people there's all sorts of things that they should be doing and investing in that they aren't. What do you think?
- [31:18]
B
Yeah, I think it's podcasters. I think you hit the answer there nail on the head. I think it's interesting Caroline's story pointed out this dynamic, which is that there's obviously stuff that people can do at home, like having a sauna or having whatever a meditation pod is, having all kinds of medical and wellness. Really, it can be almost anything. It could be a home gym, it could be a cold plunge pool. There's so many different things that you can give a client who wants to invest in this kind of thing. But the other side of it is that because there's so much development in the retail world around all different kinds of new wellness retail concepts that are opening up, and most of them don't have a built in design aesthetic. Right. Like if you're building an office building, you're like, okay, when I go to Gensler, I'm going to get this and that. And that's pretty much the template. But because this is sort of like a new category, like what does an infrared light treatment studio look like? There's no clear answer for it yet. And so I think designers really should be the ones determining that. And I think that residential designers, I think, are uniquely equipped to make people feel comfortable in these environments. And so I think it's an opportunity, first of all, to give your clients what they want in their own homes. But it's also a commercial opportunity too.
- [32:28]
A
I agree. And to me, this is very similar to the conversation we were Just having about the AI coaches. This is an opportunity, I think, for designers to immerse themselves in their understanding of what are the technologies, what are the benefits, what can they inform their clients about. And then to your point, how can they beautifully and peacefully incorporate it into clients homes and therefore into their lives? And I think this all plays into the ability that designers have to impact their clients health and well being through design. And I think that's a huge part of this. And I think often isn't talked about enough in terms of what designers can and should be doing for their clients.
- [33:19]
B
No, I completely agree. And it's also wellness is such a broad category. It could mean these very complicated technological things. It could also mean simply creating an environment where your clients feel calm and mentally at ease. There's a million different ways to interpret it. I think just in the broadest sense. People want to spend money on this and people think this is valuable. Designers should figure out how to deliver on that. And there's a million different ways to do it. It really isn't. And I'm kind of being a little facetious when I say meditation pods and red light treatments. That's part of it. But a lot of it is just simply low voc pains. There's a million different ways to incorporate sort of a wellness mindset into your business. And I think that people would be, as you said, well suited to sort of immerse themselves in it. I don't want to be too skeptical because I think this stuff is really valuable and meaningful and important and what better to spend money on than your own health?
- [34:10]
A
Health.
- [34:10]
B
But part of me does. I always get a little nervous because some of this stuff is clearly kind of pseudo scientific. I'm always a little bit wary when I see something, when people are like, I'm going to live forever by shining a red light in my ear or whatever it is. And I worry that designers maybe put themselves in a position of embracing something that's a little bit kind of on the edges of snake oil. I'm a little bit concerned about that. I also worry a little bit about that we're turning everyone into hypochondriacs with the aura rings and the panels that scan you as you walk into them. I don't know, man. Is that too cynical? Is all this stuff good? And I'm just being a crank wit. What do you think about that?
- [34:45]
A
I think it's fascinating that we're living in a time where we have the ability to even know all of these things about ourselves that we Never did before. And I agree. Is this helping us to know how many hours of deep sleep we got last night? By the way, I only got 34 minutes of deep sleep last night, so it's quite concerning. But. But I do think that a lot of this goes back to the basics. And I think to your point, creating spaces within homes, perhaps where people don't use their phone, perhaps where they don't have screens, perhaps where they light a candle and read a book and just get away from some of the stresses and strains of everyday life. And perhaps it doesn't need to be anything more elaborate than that. Have we learned that a cold plunge might be helpful to certain people in recovery? Sure. Are you a professional tennis player? Maybe you need that. I don't know. And we have learned that sauna heat. Right. There are some positive benefits to that, too. Sure. But again, I think a lot of the pseudoscience, as you refer to it, and just a lot of the merchandise that seems to be coming out today, I hope that this doesn't just sort of take advantage of people in this moment where we're all focusing on it, but instead I think if designers can just help clients to find peace in their home, they will be rewarded for that.
- [36:10]
B
Yeah, and I mean, to be clear, like, if it's pseudoscience and designers can make money, then I'm all for it. But I don't know. I think your point is very well taken. Most people's homes, I think, are just simply not set up for wellness in any way, shape or form. There's a lot of distance to travel there before we go too far. It's just sometimes I get press releases about this stuff and I'm just like, I don't know how real that is, and I'm always a little bit wary. But I think, as you said, the candle, the book, the screen, free room. I'm on board with that. Cosign.
- [36:43]
A
Yeah. So many simple things we can do before we have to get the ultraviolet light and everything else that seems popular at the moment. All right, that's it for the news, but there's plenty more to check out on businessofhome.com including a guide to Milan design Week and business coach Gail Dobie's advice on finding your next client. But first, a quick break. 300 thrilling new designs. 300 fresh inspirations from Chelsea House. Experience one of the most exciting showrooms in High Point with delight around each corner and see what makes Chelsea House the go to source for today's designers. Visit Chelsea house at 200 N. Hamilton St. In High Point. Pick up an iconic Chelsea house bag and be inspired. If you're heading to High Point this month, Laloy's showroom is well worth a visit. See the new introductions and don't miss a conversation between founder Amir Laloy and designer Amber Lewis on design business. And wherever the conversation leads, there'll also be live entertainment throughout the week. And if you can't make it to market, market. All of the new collections will be available online@leloyrugs.com where you can also connect with a sales rep or find the showroom nearest you. And we're back. I'm joined now by the CEO of Artemis, Marco Crendandino. Marco, pleasure to have you.
- [38:20]
C
Hello. Thank you so much. Thank you, Dennis, for having me today.
- [38:23]
A
I'm delighted to have you on. Years ago, we had your co founder Ippolita on the show and she told us a story of some of the early days of discovering Italian artisans and craftspeople and then ultimately bringing their talents online. Is that the story you tell, Marco? Tell me the story of Artemis from your perspective.
- [38:50]
C
I think we have a very interesting story, but also a couple of different perspectives. The idea was basically to try to find a way to support Italian craftsmen. And Italy, as everybody knows, has thousands of masters craftsmen and amazing artists that are very, very good in what they do in terms of production and capabilities and they really represent the heritage of our country. But at the same time, they are not the most efficient, let's say in terms of operation, there's no autom and logistics. So the question was how do we support them? You know, getting in front of the right people and real way we wanted to do it was through e commerce and through a digital platform. I was also very aware of the fact that our target clients at the very beginning were consumer, but also that the majority of consumer clients, when it comes to refurnishing an apartment or working on a project, they always do it it with an interior designer. And that's basically, you know, the first Artemis, a digital platform, a company in Milano that is managing the operation and everything from A to Z, including logistics, which trust me can be very tough in our, in our industry. Yes, but, but also trying to do what we do at our best, which is being a curator. The reality is that our vendors were basically artisans so they couldn't do what they didn't want to do. Especially when it comes to managing interior designers, the expectations are completely different than a final client. So we set up a properly, let's say executed team that was only managing trade. So the very first years of Artemis was, were basically B2C and trade businesses, both online, both digital, with us being hands on, on the operation side for the supply and this very first part of the company. So Artemis said the origin lasted until Covid happened, because during COVID business was basically booming very fast, maybe too fast. So the question we were asking ourselves was, how do we keep up with the growth when this is going to be over? And the second question was, now that people are going to be back to work, hopefully are going to be back to their normal life, how the behavior of luxury clients will change and evolve. And we discovered that actually the work that we had done was mainly for a standard. And there was a completely different world, which is much more tangible. It used to be much more tangible. Right after Covid of people that really wanted to go out, move their consumption into experiences, we decided to be closer to our clients. And we started to open physical offices all over the world. We currently have six offices in three continents. And then in Milano, we said, okay, now we need to actually speak the same language of our clients. And since we have, on the opposite side of the table, interior designers and architects, we created our internal team of interior designer, product designers, architects, project managers only to support the trade in the evolution and the management of the project.
- [42:29]
A
And when you talked about understanding that people had shifted their mindset from wanting physical things to suddenly wanting experiences and that becoming more of a priority, which was certainly a huge wave coming out of COVID and we referred to it for a time as revenge travel. And everybody was booking every flight and going to every concert and following artists all over the world. How did that impact your business and how you thought about your business?
- [43:00]
C
Exactly. We actually anticipated that trend, that we understood that the shift was coming. So we said, okay, since we have already the list of clients, because at the time, interior designers and architects for us were merely clients, we said, why don't we go out, we meet them in person and we try to establish a relationship. Because maybe if they know that we are there for them, meaning literally and physically there for them, they can actually trust us and they can introduce us much earlier in the process. Which allowed us not only to increase the order value for residential, but also to start working on other verticals, including hospitality and retail. What happened was that people started to try the service of Artemis and they moved from buying a few pieces for a residential project into to, okay, now that we have done that, why don't we try with the boutique hotel? Let's do the common areas, or. Actually, we've worked already on the common areas for one project, which a couple of pieces were amazing bespoke pieces. Why don't you do the prototype of this chair? Because we have 150 rooms, and we might need you as a partner for the 150 rooms and not only for the common areas. So step by step, without actually, actually us even realizing it, we became an amazing partner for hospitality, which is, trust me, not something that we had in mind at the time, because we come from E commerce. So for us, it was all about acquiring traffic, converting traffic into clients, converting orders, and try to increase the average order value and the retention of those clients. When you start working on projects and people start to trust you, sky is the limit. So 2022 was a real shift for us, and we moved from being a curator of amazing Italian products into a partner that put on the table the skills of the artisans, allowing interior designers to realize their projects in a very efficient way.
- [45:08]
A
So here's this whole array of Italian artists and craftspeople, and you can customize their work in any way that you can imagine. And you can bring this whole team, not necessarily all collaboratively working together, but you, Artemis, can see to it that each of them is working on a specific product or a whole development of potential products, it sounds like, for projects.
- [45:35]
C
Exactly. So sometimes designers don't even know what they need. So they don't necessarily come with us with a specific product in mind. They might come with us with an idea, a concept, and then we suggest them what's the right product for them? Again, instead of being purely transactional, we are now a partner. And as a partner, we can suggest what are the right producers for that specific product, for that specific price and budget, and for that specific timeline, which is another important element when it comes to hospitality and retail projects. That they always come to you with very tight deadlines.
- [46:14]
A
Well, exactly. They come to you with very tight deadlines. And many European vendors have not been known for hitting those tight deadlines. So I wonder how you have navigated that.
- [46:28]
C
I would say that from an operational standpoint, when people ask me, how can you deal with an almost inefficient supply chain? I say, okay, actually, we exist because of that. The reality is that we built an infrastructure that was allowing us to sell in over 70 countries in the world and to collect pieces from over 1000 artisans shipping to 10,15,000 different clients all over the world. And in terms of setup, operational logistics, we were, like, super strong because we were managing an E commerce business. So when you're doing that you also collect a lot of data. So you know, what are the producers you can trust? What are the producers that are always late versus the one that anticipated deadlines. So you built that layer of knowledge and when it comes to working on projects it's much easier because you have tested it already on another channel which is E commerce. What are actually the producers you can, you can work with for those projects? Unfortunately, many companies that didn't think long term, they couldn't really keep up with the growth. And as we all know, many E commerce company went bankruptcy or stopped their growth just because they didn't understood what was happening on the market. So during COVID it was pretty clear to us because we were looking at data that many big, big companies were entering into design, home decor categories. So what was happening is the big players doing fashion, they wanted to grow and they started to open, you know, their own sections of categories with you know, furniture. And when I was looking at those actions and those choices, I was almost like, oh my God, they don't know what they are entering into. You know, they don't know the logistics.
- [48:23]
A
Good luck to them.
- [48:24]
C
Exactly, exactly. So they don't know what's going to happen. The logistics. They used to ship sweaters and beautiful shoes and now they need to ship furniture piece which is much more expensive to ship. It's much more complex. And there is another interesting aspect which is one of the reasons why E commerce is not that developed in our industry versus other industry which is the impact of shipping costs versus the retail price price. Now if I'm shipping watches or shipping luxury fashion items to the world, the impact is approximately 3 to 7% including insurance. If you're shipping for a piece of furniture from Italy to United States or from France to Australia, the cost of shipping, it can be almost 40, 50 even, you know, the same amount of money of the item itself. So how do you manage that? It's just an equation, doesn't work anymore. So our intention was we will never compete with these big multibillion dollar companies. How do we grow is actually to do it in a traditional way. Let's open physical offices, let's open procurement teams on the ground, let's open a beautiful gallery that we now have in New York. Let's go back to talk to people. And this was what saved the company because we doubled our revenue from 20 to 40 million in two years. And as a consequence we became relevant and relevance. I think it's something that it's almost Underestimated companies, they only look at revenue, they only look at the top line, or let's say the top line, the bottom line. But they don't really think about their brand. But you become relevant when people can trust you.
- [50:19]
A
And how do you measure relevance? How do you explain or capture how relevant you've become?
- [50:25]
C
Honestly, we have this amazing Milan Design Week exhibition. It's called the La Partamento and we had 35,000 people showing up last year, 1300 editors coming for the press day with thousands of articles and mentioned. And that's something that show you that through the physical interaction and through the physical world, even an E commerce company can change and even a digital platform can actually shift into a physical platform, which is what we have. Our community didn't necessarily change. It changed the way we interact with them, because we can interact with them in New York, in Miami, in la, in any city, in a personal way. And through that, people can trust you because they see your face. They see the face of the people that are managing them as an account. If there is a problem, they can reach out to you. So being there for the clients, it's what changed our business.
- [51:26]
A
So coming up at Salone, it sounds like one of the things that will be going on for you is if I understand, it's the fourth edition of this appartamento. Yes.
- [51:36]
C
Yeah, it's the fourth edition of La Partamento. Very, very successful. This year we're gonna have Rockwell with David Rockwell and their team, March and White design Urjoan Interiors from the Middle East. Charlie Hapram and Herrero and Sasha Adler from Chicago. It's an amazing roster of designer. And what we do is very simple. We have the opportunity to be based in Milano with some of the most beautiful historical architectural buildings. And we take over a beautiful palazzo called Palazzo da Nizetti. And we give designers a room to bring basically their vision of Artemis. And this year is also a very, very big year for us because given the fact that we have been doing product development for designers and for other partners for the last four or five years, we said, okay, we've been doing that for the others. Why don't we do it for ourselves? And we're launching our first Artemis collection in partnership with Gashaux Studio. And it's a real shift for us as a company moving from what we used to be as a curator, what we used to be as a partner, into becoming a real brand in the most beautiful way that we can, in a very experiential way, which is during Milan.
- [53:10]
A
So let's talk about that more. So John and Christine Gachot, who many listeners will know and our fans have no doubt they will be creating, if I understand, a furniture collection with you. And this sounds like this is what you're hoping to be the beginning of a process where people will develop collections with you and it will be sold through Artemis as well and on display in Milan for the very first time.
- [53:40]
C
Yes, exactly. So with Jen and Christine, we had the pleasure of working for many years on different projects. They had this idea in mind of creating their own collection for many, many years. And I know that many other companies try to onboard them to design and distribute their collection, but they really wanted to do something that was very, very special. So. So the design comes from their idea of the perfect living room. It's an interesting conversation because instead of just bringing their design and finding artisans that could execute the process was, no, we want to bring you to Italy and we want you to work with our artisans to create something special together. That was a process that allowed them also to discover, you know, what's behind the products, the stories of those makers, why they're working on some specific material, why they don't work with other specific materials, and apart from how funny it was because they couldn't understand each other because Italian artisans cannot speak English. I think Christine and John learned a little bit of Italian. But the collection is going to be beautiful. We're going to sell online on Artemis.com In Artemis physical spaces, the one in New York and soon also the one in Milano, we are working on as a permanent space and through selected partners, especially in Asia and markets where we don't operate directly.
- [55:14]
A
Finally, another thing that you've got going on is this champions of craft. So tell me briefly what that is and how you'll be celebrating that in Milan as well. Tell me about another thing I'll be missing out by not being in Milan. Go ahead, go ahead, Mark, go ahead.
- [55:32]
C
Exactly. You regret not coming this year. So to answer that question, we said, okay, we need to find a way to actually re establish why we exist, which is to support craftsmen preserving those amazing skills that have been there for centuries and centuries and centuries. And now because of the globalization or because of the competition of other producers from all around the world, some of these artisans were just running out of business. So Artemis really supported the Italian ecosystem to grow so that those artisans that are, at the end of the day entrepreneurs, they could actually hire more people and those skills could be preserved for another century. But the reality is how do we actually re establish that? Because it's always very difficult to bring in culture and education into a business. So the angler was probably the real Champions of Craft. Supporting Italian craftsmanship right now are the designers that we've been working with because they understand the quality, they pay a lot of attention to detail. There is a complete alignment in terms of culture, and they are the ones who care. They care about preserving those skills because they use those skills every single day for their projects. So Champions of Craft is going to basically reveal every two weeks a story of a different design firm to our consumer clients and really close the loop. So we started with consumer clients, and then we became a B2C, B2B, working more on trade. Then we enter into contract for purely commercial projects. And now with Champions of Craft, we are closing the loop because designers are gonna actually be the ones on the stage, be the ones that are. Are going to showcase why they care about craftsmanship and why Artemis is so unique. And we are presenting their work every two weeks at different design firms to our entire audience of clients. Yeah.
- [57:28]
A
Well, that's so interesting. A company born online has realized how important the physical world and all of the events and community have become to all of this. Well, I'm thrilled to get to speak with you and learn so much more about Artemis. I'm envious of everyone that will be in Milan for Salone, but I look forward to hearing a report from you, Marco, when it's all said and done. And I wish you luck with everything. Thank you so much for talking with me.
- [57:54]
C
Thank you so much.
- [58:00]
A
And we're back. We're getting to the end of the show here, but before we go, we'd like to take a second to highlight anything going on in the industry that might have caught our eye. Fred, we're to going caught your eye.
- [58:08]
B
A couple things caught my eye this week. First of all, our old friend Shawna Tellerman of Modzi fame. Haven't said that. Haven't said Modzi in a long time. You know, when Modzi kind of folded or was sort of acquired by Lennar, Shauna went along with the company and was. Was working at Lennar the home builder for a good at least three or four years or something. She recently announced on LinkedIn she's starting her own AI company that's sort of in the design and architecture space. I don't exactly know what it is, but I'll certainly be, you know, bugging her about that and trying to find out what she's up to. And I'M certainly curious to see what see what that is because certainly modzu is a little bit ahead of its time and maybe her next thing will be cool and worth talking about on the Business of Home podcast. So that was fun. I also saw that another former podcast guest, Dan Rubenstein of the Grand Tourist, another podcast, but kind of a media company really at this point, recently announced a deal where the the Grand Tourist was acquired by this thing called Pardone Ventures, I believe it is. It seems like Dan is going to come out with more print issues and have some financial backing from this investor. So kudos to him and excited to see what's next for the for the Grand Tourist as well. And as we know from the wellness segment, podcasters are popular. They're powerful, too.
- [59:17]
A
Well, and good for Dan and good for podcasters. FRED I think this can't help but be a good sign for us. I was excited about that announcement regarding Shauna Tellerman and I'm sure the team that she is putting together and she said she's going to be in the home and architecture space, I think. So hopefully we will hear more from her, but she's a smart one and one that I was excited to hear is moving on to her next chapter. So I hope we get to hear more soon.
- [59:44]
B
What caught your eye this week?
- [59:45]
A
Dennis well, we were talking earlier about the time that we're in with so many, many companies being acquired and rolled up, and another prime example of that is this entity that was the former Bed, Bath and Beyond. Now I think they're just sort of more beyond than Bed and Bath. But, but they are aggressively acquiring brands. They've, they are now acquiring Lumber Liquidators, which was once a massive organization with so many retail locations and cabinets to go. And they've, they've already announced that they're acquiring the Container Store, much to my my great sadness and dismay. But they're going to, they're going to elevate that that name, the Container Store, and use that as a jumping off point. But it's, but it's, it's a really interesting time for this company that also had overstock.com and a bunch of other brands. It's one that we'll, we'll have to watch and see how it, how it plays out. But again, a sign of the time that so many of these companies just could no longer go on their on their own. And, and now they're all part of the Artists formerly Known as.
- [60:54]
C
Exactly.
- [60:55]
B
That's a weird one.
- [60:57]
A
We'll, we'll see what it all means for the future. All right, that's all the time we have today. Thanks so much for listening. If you want to keep up with the latest news, browse job listings or take a workshop, visit us online@businessofhome.com if you want to get in touch with the show, write to us@podcastusinessofhome.com this episode was produced by Fred Nicholaus and Caroline Burke and edited by Michael Castanella. I'm Dennis Scully. Have a great weekend, and we'll be back with you on Monday.