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Business of Home Podcast
The Thursday Show: Does the design industry need more critics? Plus: The Wells Companies makes an acquisition
01:00:20
Host Dennis Scully and BOH executive editor Fred Nicolaus discuss the biggest news in the design world. Later, Lauren Hudson of The Wells Companies joins the show to talk about why she acquired Vermilion Rugs.
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- [00:08]
Dennis Scully
This is Business of Home. I'm Dennis Scully and welcome to the Thursday Show. Later on, I'll be speaking to Lauren Hudson of the Wells Companies about her latest acquisition. But first, we're going to catch up on the news, including the latest on tariffs, HD Buttercup's sudden closure, and whether the design industry needs more critics to do all that. I'm joined by Business of Homes executive editor Fred Nichol. Hi, Fred.
- [00:33]
Fred Nichol
Hi, Dennis. How's it going?
- [00:35]
Dennis Scully
Great. How you doing?
- [00:36]
Fred Nichol
I'm doing good. Welcome back from London. How was the trip?
- [00:39]
Dennis Scully
Thanks so much. Trip was. Trip was great. Memorable Chelsea Flower Show, Highgrove. A lot of great memories and saw a lot of great people.
- [00:49]
Fred Nichol
And you're apparently turning around in what, 20 minutes and going back to London, is that right?
- [00:54]
Dennis Scully
I had such a good time that I'm leaving again on Friday because I just can't stay away.
- [00:59]
Fred Nichol
Level with us, Dennis. Is this some sort of tariff evasion thing?
- [01:03]
Dennis Scully
Are you smuggling pocket squares?
- [01:06]
Fred Nichol
Exactly.
- [01:06]
Dennis Scully
Am I setting up, you know, just as a fallback? Fred, I'm just setting up a little location in the UK in case words comes to words.
- [01:15]
Fred Nichol
You've got to take care of your other podcast in London, the one that no one here knows about. Well, normally here we would look back on Monday's episode, but we didn't record one because it was Memorial Day weekend. So instead I'll say, stay tuned for Monday's show, which is going to be a fun one with a couple people, a couple buzzy people from the world of media. I will cryptically say, yes, indeed.
- [01:35]
Dennis Scully
I might have been over at Hearth Tower and recording a conversation with some folks over there. So look forward to that conversation on Monday. In the meantime, we'll take a quick break and get into the news. This podcast is sponsored by Jaipur Living. Since 1978, Jaipur Living has redefined rug making, where the value lies not just in the rugs themselves, but in the hands that create them. Every piece is a reflection of heritage care and extraordinary craftsmanship passed down through generations of artisans. For interior designers, the Jaipur Living trade program offers more than just exclusive benefits and insider pricing. It offers a trusted partnership rooted in Service. With over 2000 styles in stock and ready to ship, they make it seamless to deliver timeless style and substance to every client. Apply to become a partner@jporred living.com this podcast is sponsored by the Crate and Barrel Trade program designers. If you haven't joined yet, it's time to check them out. You'll get access to beautiful, high quality furniture and decor from three design driven brands, Kraton Barrel, CB2 and Kraton Kids right at your fingertips. Plus a dedicated concierge team to support your projects from concept to flawless installation. Members also get an exclusive 20% discount with no minimum purchase. Join today@ CrateAndBarrel.com trade and start enjoying all the perks. And we're back. First up, Fred, of course, tariffs.
- [03:22]
Fred Nichol
I'm sorry listeners. We tried. We tried. Trade policy chaos continued last week when President Trump threatened to place a 50% tariff on the EU on June 1 if a trade deal wasn't reached. A few days later, the US reversed course, delaying the new levy until July 9, same as it ever was.
- [03:40]
Dennis Scully
Is it me or were things so calm, everybody was starting to recover?
- [03:45]
Fred Nichol
And then, yeah, I mean, I think this news sort of speaks to the kind of sensory overload load of the tariff saga, which is that 50% on the European Union is a really high number and would certainly spill a lot of ink around the world if it hadn't been immediately preceded by 145% on China. And so these headlines get rolled out. I think everyone is a little bit numb to it. I certainly am. Especially because of course, the number was rolled back only days later and postponed until July 9th. I do feel obligated to say that if there is a 50% tariff on the EU that actually goes through, that is hugely significant in the design industry. We import a lot of stuff from Europe. There's a lot of companies, not least of which are friends at the Floss BNB Italia group. There's a lot of companies that will be certainly very affected by 50% tariff. But it feels almost silly to get deep into the weeds on it because I'm not sure anyone thinks it's really going to stick. I don't know. What's your read on it?
- [04:45]
Dennis Scully
Well, as you say, I think there was a whole group that was paying such close attention to the China tariffs and then another group that said, oh well, that's China, that doesn't really affect us. And then suddenly 50% on Europe and suddenly you're talking about Fortuny and Dadar and Pierre Frey and suddenly everyone goes, yes, those are all my vendors actually, that would suddenly be impacted. So I think there was a whole swath of designers and people in the industry who perhaps weren't paying as much attention to the issues in China and Vietnam, but suddenly rolled out of bed the wrong way when 50% on Europe was was announced, but then as you say, so quickly rolled back or delayed at least for the time being. Until July. But meanwhile, there is this straight 10% tariff on everything. And even with the reduced tariffs, there's still this 30% tariff on China. Yes.
- [05:40]
Fred Nichol
Yeah. Well, I mean, I think it's silly to get too deep into the weeds, as I said, because we don't know what's gonna happen with Europe. But we do know that Even though the 145% tariff was rolled back relatively recently, it's still at 30%. That still is having a real effect, especially an effect on businesses in our industry. But if you're a small company and you're really reliant on one factory in China, you can't move out of it. That really does have a significant impact on your business, even if it is only 30%. I do think it's worth pointing out that a lot of the industry groups have been talking about how these 30% tariffs on China, which are in effect right now, have been infecting their business. A lot of them have.90%, according to this one survey by the International Housewares association, have had to delay product shipments. 27% have had to reduce their workforces. So this is having a real impact on the economy. And while I do think the rollback of 145% prevented the most extreme version of whatever crisis those tariffs would have caused, you are seeing prices go up. I know Home Depot has said we're not raising prices, and there's all this kerfuffle around Walmart. What you don't see is that some companies just simply have to raise their prices because they have no. And then Home Depot will just pull their goods off the digital shelves and just simply won't show them the idea that Home Depot isn't raising prices. It's a little bit of a misnomer. Companies are raising their prices or they're taking a hit. Even though these numbers are a little bit out of the headlines, for obvious reasons, they are having an impact. And I'm really curious to see what the inflation numbers look like for next month and the month after that and to see how all these home goods retailers, how they're. How it shows up in their earnings reports next quarter. Because I think we've all kind of fooled ourself into thinking it's over, but I don't think it's over.
- [07:28]
Dennis Scully
Well, I think you're so right. And I think it's the reason that the Federal Reserve has taken the position that they've taken, which is that we just don't know enough yet to know whether to lower rates or whether to be worried about inflation yet or not. I think the next few months we're going to see both the inflationary impact and to your point, I think we're also just going to see how much this is really impacting businesses. Just keep talking about it here on.
- [07:54]
Fred Nichol
The Thursday show and we'll keep on apologizing for talking about it.
- [07:58]
Dennis Scully
Moving on, we're going to talk about Burke Decor. More than two years after the site first fell into financial and legal trouble leading to its shutdown just weeks ago, the company's founder is back with a new home goods site called Studio Per Diem. Luckily, our crack reporter Fred Nicholaus is on the trail. Fred, what have you found out?
- [08:20]
Fred Nichol
I've found out that it's really fun to dig through Ohio State business records. That is now my new hobby. Yeah, you know, Burke Decor is a company that we've talked about a lot on the Thursday show. Just a brief recap. You know, it was a home goods e commerce site that started in the late 2000s, enjoyed some success. But then in 2023 or so it started to stop delivering orders, including to a lot of interior designers, and stopped giving refunds. It got sued by a bunch of people, including FedEx. It was eventually sued by the Ohio State Attorn General. Just last month, the site was shut down and the state tax commissioner put a sign on the door of one of their retail shops saying that they were prohibited from making sales. I think we actually talked about it at the show on the time. It seemed like that was the end of the Berk Decor saga. But guess what? Not so much. We got a tip last week or a couple weeks ago that Aaron Burke, the founder of the business, had allegedly started this new site called Studio Per Diem, which was in many ways very similar to Burke Decor selling home goods just under a different name and obviously a different URL. I wrote an article trying to unpack the complicated web of e commerce businesses that Erin Burke has and maybe why she would start a new business even though her old business was more or less sued out of existence.
- [09:41]
Dennis Scully
What did you learn sifting through it? It's so interesting seeing the new site. And I think there's just one sole Instagram post from this new company that just, yes, it's a brand new day. As if, oh, we put all those bad memories behind us.
- [09:56]
Fred Nichol
Yeah, I mean, it's complicated. And I would urge listeners to check out the article that we published about it. It should be online today. It's in the weeds because the thing that we kind of never really reported about Burke decor was. Even though it was this one site that sold a lot of home goods, Erin Burke had a lot of different businesses set up along the way. She had two other e commerce sites, one for baby goods and one for rugs. Berk decor became an importer for these two companies. A Japanese company called puebco and a Danish company called oyoi that sell home goods. She had this kind of little web of businesses that all kind of worked together, Nothing illegal about it, when it was all kind of hunky dory on the level. There's nothing wrong with having a bunch of e commerce businesses. And it was a smart strategy to have all these different groups. But it makes it sort of complicated to pick apart what's actually going on. Because at least based on my reporting, what happened was is that even though Burke decor, they've shuttered the site and it's being sued by a million different people, I believe that Erin Burke still has access to this inventory that she imported from puebco and oyoi. And so again, this is my speculation based on reporting and talking to people, but that this site is set up to generate cash from that inventory, whether that's legal or not. Given that berk decor, the primary site, is under investigation by the attorney general and has been served a notice of its suspension of its vendor's license. Whether it's legal just to start a new business to sell the same inventory, I don't totally know. That's a little bit of an open question. But it's certainly a little bit, I guess shady is the technical term I would use to describe what that is. I know it's very in the weeds. That's the tricky thing with this stuff is it's one LLC handing it off to another one. It's very complicated when you start digging into it.
- [11:42]
Dennis Scully
Well, it certainly is a complicated web. And as you say, the creditors owed a lot of money. And you can't really tell in this whole mix if the creditor is happy enough to let another site to clear some inventory happen in the hopes that maybe they recoup some of their money. But it is a reminder that we often don't know what's going on behind the scenes with a lot of these e commerce companies. And I don't know, Fred, I think we've talked about this in the past what the best advice we want to give people about e commerce companies in general.
- [12:16]
Fred Nichol
Yeah, I mean, it's funny because when I started looking into the Burk decor story, I was a young naive 2023 and I was a young I really do like you know this sounds like a dumb thing to say, but I like E commerce. I think it's like a great way to start a new business and it's a great way to get product to people quickly. And I don't think designers should be discouraged from finding new sources online. But digging into the weeds of the story has really, I guess opened up my eyes to it really is relatively easy to spin up a very good looking e commerce site without a lot of actual business on the back end. You know, you can fill it with vendors relatively easily and there's really not a whole lot of substance on the other end. It may be kind of like a shell LLC running it. This whole thing has just made me feel very buyer beware about unfamiliar e commerce sites. I think designers would be well served just to you see a great price for something that you know you're going to like. Just double check the fine print that you know you're buying it from a reputable source. Don't buy it from the site that's selling it for $15 cheaper that you've never heard of that has a somewhat shady Contact Us page. Because that way madness lies. You can end up in a lot of trou trouble buying from one of these sites and I do think it's more important than ever to do your due diligence.
- [13:31]
Dennis Scully
Moving on. Sadly we have to report Fred, that HD Buttercup is closing.
- [13:35]
Fred Nichol
Yeah, sad. One the Southern California based furniture retailer is ending its two decade long run citing challenges brought on by tariffs and recent economic uncertainty. There's the T word again. Now the company is liquidating its LA and Costa Mesa showrooms and searching for a potential buyer. Maybe they'll find one, but at least for the time being, this appears to be the end of the road for HG Buttercup. Very interesting company.
- [13:55]
Dennis Scully
A very interesting company. As I think we were discussing right before the show, I have some fond memories of being there for the opening. When I was working for Domino magazine, we threw a big party there. Lots of who's who from Hollywood and elsewhere showed up and at the time this was a really big deal. Evan Cole, coming from the ABC carpet and home business and was really thought to be a cutting edge retailer and people were excited about this operation.
- [14:23]
Fred Nichol
Yeah, I mean to be clear, I've never been to HD Buttercup, but it's been described to me by a lot of LA design people as like a great destination, a great retailer. They also had this kind of Like Design center, light business, where various people would install their own showrooms. You know, when Fred Siegel Home was relaunched by Keith Granite, they put the Fred Siegel Home showroom in one of the HD Buttercup buildings. So, you know, it was an entity in Southern California that certainly I was familiar with and seemed to be a big presence for Southern California decorators. It's interesting. You know, they said in the press release that this was related to tariffs and economic uncertainty. I certainly buy that as an explanation, but it's also been around for a long time. I don't know if you had any insight into what's really going on here, what might really be going on here.
- [15:05]
Dennis Scully
Well, I also think that it's just hard to keep brands like this going when you come out of the gate with so much enthusiasm and excitement. And it's the cool new thing, it's hard to stay the cool new thing for 20 years. So I think a lot of it is who was really minding the shop and what focus was really being given to this business. I think your point about it was the kind of brand that others wanted to partner with to make them look cooler, hipper. And I don't know if it is still perceived to be that way. So that may be as much as anything, why it has just run out of steam at this point.
- [15:46]
Fred Nichol
Yeah, it's tough. It's one of the interesting things about retail is that oftentimes when someone gets into it, their kind of key advantage is that they're a cool kid on the block with a new look that feels very fresh and probably associated with associations with the cool people of the day. But that, over time, obviously fades as we all sadly become uncool. Not that I'm there, of course, I'm still, well in my cool years, but it does happen to people and retailers, and it's hard to hold onto that. And then you're just another store and you're competing on brutal margins and you're fighting off RH and you're fighting off Bob's Discount Furniture, and it becomes a little bit more of a grind. I think very few people really have the appetite to. To build up a specialty retailer and preserve it over time and keep innovating, keep doing new things. Look at ABC Carpet at home. It's like they went through a bankruptcy in 2018 or 2019. It's hard for one of those types of businesses to retain the cachet that it had in its heyday. Maybe someone will buy it and reignite it. Who knows? Could happen.
- [16:48]
Dennis Scully
Yeah, Listen, I would love to think that there's a great merchant out there who wants to take this name and bring back some of what was so interesting and fun and what made it such a destination. But there aren't a lot of great merchants out there, so we'll have to see. Up next, we're going to talk about recent acquisitions. There have been a lot of brands changing hands in the home industry recently. Last week we spoke with David Netto about acquiring Woodard Weave. This week, Lauren Hudson of the Wells Companies is joining us to talk about acquiring Vermilion needlepoint rugs. Across the pond, British home decor company Designers Guild was scooped up by UK furniture retailer Dunelm. The question is, Fred, what's going on here?
- [17:30]
Fred Nichol
What's in the water? It appears to be M and A season in the design industry once again, at least on a certain scale. As you said, you're going to be talking to Lauren Hudson of the Wells Company Shortly for the interview portion of the segment. Without getting too deeply into those details, I thought it might be interesting just to talk about this because especially Woodard Weave and Vermillion needlepoint rugs seem to be similar kinds of businesses. You have these companies started by baby boomers that served a role in the design industry, a very specialized product. In both cases, they seem to have specialized in runners. Apparently runners are hot right now, but they started to fade a little bit as the founders started to age and move away from the business. And now they've both been snapped up by people who are hopefully bringing some new energy into it. I thought it might be interesting to talk about that phenomenon.
- [18:23]
Dennis Scully
Well, I think it is interesting to talk about that because I think there's a lot of these family run or sole proprietor run companies that are out there in our industry. Many of them might be in your local multiline showroom and they don't always have a clear succession plan. And many of them might have been, as David articulated, might have been losing steam from a marketing perspective. In the case of Woodard, that was once a great name. That was out there a lot more than it has been in recent years, which is the opportunity for David to bring it back in a meaningful way, which I think he will. And I think in the case of Vermillion, very similar story. It's a really unique story to tell the whole process there. And I just think that over the years some of these companies have just lost a little bit of steam.
- [19:21]
Fred Nichol
Yeah, it's interesting. We were just talking about HD Buttercup and how hard it is to keep A brand cool over 20 years. That applies whether it's a retailer or a rug brand. I think think you get to a certain point in running a business yourself and you're like, haven't we proved ourselves? Aren't we cool? Do we really have to get out there and beat the bushes? I also think we haven't talked about this in a while, but we are fully in this thing called the Silver Tsunami, which is the aging of the baby boomer generation into retirement age. And it's a huge demographic, it's a huge generation in the US And a lot of those people have built up really cool design industry businesses that are are big enough to want to keep going, but difficult to sell. There aren't that many buyers in the industry. This is something that we talk about sometimes in the private equity conversation, which is that even though no one particularly likes private equity, as a buyer, they're often the people who have the money and want to buy these businesses. But for a company that's smaller and a little bit more boutique y, it's hard for them to catch the eye of a PE firm. And maybe the founders don't want to sell the pe, but that just ultimately means that these businesses are more likely to fade away than they are to keep going. I just think it's cool to celebrate these instances of having the next generation coming along to take them over and revitalize them. With the sad caveat that I think that there are a lot of these companies that were baby boomer founded that never quite got to the massive sellable scale that are going to start fading away in the next few years.
- [20:51]
Dennis Scully
I agree. That's why I was so glad when we were talking with Mike Gracie and Jen Gracie about their family business. Already the next generation is waiting in the wings to take that business on. And that's so exciting. So many of these little companies which are part of what we celebrate in the design industry so much, and what makes the design industry so special are companies that really will need some support in the coming years. And I don't know to your point, I don't think private equity is coming to the rescue of many of these small brands. So I, I'm thrilled to see David Netto and Lauren step in. And it's great that we have people who are that interested and willing to take the leap because it's not going to be a quick book, it's not going to be a quick turnaround for some of these things. Exactly right.
- [21:42]
Fred Nichol
Get rich quick schemes, Acquire Vermillion Needlepoint yes, exactly. But you're so right. It's like you need to have. If you don't have that next generation waiting in the wings, it does become a tricky proposition. So I'm hopeful that there's more David Nettows and more Lauren Hudson's out there who can buy up all these companies.
- [22:00]
Dennis Scully
Yeah, I definitely think there is the need for some more deals. So I hope that we will see them and I look forward to talking about them. In the meantime, Fred, we're going to talk about design criticism.
- [22:11]
Fred Nichol
Finally, in a piece for World of Interiors this week, David Lipton argues that the interior design world could do with with bolder commentators who refuse to beat about the bush. Unfortunately, I do a lot of beating about the bush. No one who starts a podcast can credibly say they don't beat about the bush. Interesting article. Did you read this one?
- [22:32]
Dennis Scully
It was an interesting article. I was as much excited about the concept of the article as I was about some of the points being made. But I think that you and I have talked about this in the past, and certainly when we had Dan Rosen on the show not too long ago, we got into the discussion about the industry desperately needing to have more of a sense of humor and desperately needing some people who can just poke fun or sometimes just make us laugh at ourselves in the design industry a little bit, which I think the industry could benefit from. But I thought it was great to see this raised.
- [23:10]
Fred Nichol
Yeah. And certainly a lot of people popped up on World of Interiors, Instagram. There was a lot of like, yes, we need this and here's why we don't need this. And it's clearly a. It's a live conversation and I'm glad that they raised it. And it's interesting, though. I mean, I sort of feel like laughing at ourselves and criticism are two different things. I do think the industry probably needs funny people. And I actually think it's gotten more a sense of humor over the past decade or so. It's a little less self serious than it might have used to be, but it doesn't really have a critic. We don't have a critic who's like, here's why the COVID of Eldacor is bad or here's why this project is wonderful. And I feel like we've had this conversation several times before. But I'm curious, where do you stand on at the moment? Do you think we need leaving humor aside, do you think we need someone to come in and judge rooms the way that an art critic might judge an exhibition?
- [23:59]
Dennis Scully
Well, first of all, I never want to leave humor aside, so I'll start there. But I do feel your point is well taken. I think we need to not be afraid to hold something up and say, this is good work and let me tell you why, and then look at it relative to some of the other things that we even veering into.
- [24:22]
Fred Nichol
The idea that there should be criticism is clearly uncomfortable. I don't think anyone in the industry struggles with holding up good work and saying why it's good. That happens all the time. It's more pointing out that something is bad that doesn't happen.
- [24:33]
Dennis Scully
No, no, but that's what I'm saying. I want to hold up something that's good and then make a comparison to something that is less so and talk about why that is. But I want to establish some kind of an absolute. And it's hard because it's taste driven, but I do think there needs to be some kind of a. Oh, okay, yeah, we get it. This is great and this is important. And it's hard who's going to be the arbiter of what's good and what's not. And I think sometimes this comes up and you, being the big Substack supporter that you are, I feel as if David Michon in For Scale talks about this a lot. I think some of the other people that we've talked about on the show are trying to get more into this and seeing Substack as a safe space to do it. I think that was part of what we were all hoping for when Substack first sort of burst onto the seam. Can people not have to worry about advertising or not have to worry about some. Some corporate overlord stopping them from saying what they really want to say about a project?
- [25:45]
Fred Nichol
Yeah, well, I mean, I think that's the challenge, right? Because World of Interiors can say, well, we want more design criticism. But I guarantee you that World of Interiors is not going to publish like a lengthy criticism of one of Ken Folk's projects because there's no incentive in the traditional design media publishing structure that would support that. Because it's all. First of all, you're judging a designer who. You want to submit projects to your magazine. Second of all, that designer is using products in their project that probably belong to advertisers of your magazine. There's very little incentive for publications as we know them to start publishing criticism of designer's work. I would also argue it's kind of like there's something fundamentally different between interior design and fine art, because the end result of A room is the product of not only the designer, but also the homeowner. It's also like, you can only judge it so much by looking at a picture. You would never judge a gallery exhibit by looking at pictures of the gallery exhibit. So. So there's all these structural problems with it that make it difficult. There's economic problems that make it difficult. And so I think that any criticism that really comes out is going to have to happen on something like Substack. It's going to have to happen outside the industry a little bit. It'd be fascinating if I don't suspect that they will. But if the New Yorker or New York magazine, someone who's outside the industry, isn't reliant on X sponsor to fund their next issue, could field a critic who could really go and look at projects and offer a real critical eye. But I just feel like the economics and the logistics just don't quite line up. And I'm not holding my breath to get that great critical voice we all think we need.
- [27:17]
Dennis Scully
Well, I'm hoping that I'm going to bump into David Lipton from the World of Interiors when I'm over in London. There we go, and hear from him, the feedback that he got and what they're planning to do with this. They invited people to write in, and I'm eager to see if they follow it up. The interesting thing, this coming from World of Interiors, which is one of those magazines that every designer will tell you is their favorite magazine, and yet you ask the average person to look through World of Interiors, and they're like, what is this stuff? Are these even rooms? What if. What's going on here? So, I mean, I think it would be so interesting to see them present that criticism. But also, I think your point about. You mentioned the New Yorker, and I'm thinking about Paul Goldberger back in the day. What is the difference between saying this building looks horrible and this living room looks poorly designed?
- [28:07]
Fred Nichol
Well, I mean, I agree with that, but I think the difference is Paul Goldberger can look at a skyscraper and perceive it in its totality and probably go inside the building as well. Whereas, like, you know, imagine telling a homeowner, I want to invite this critic in to judge your drapes. You know, that's a. That's a different proposition entirely. So, like I said, there are logistical challenges as well as economic ones. But if someone can figure it out, we will get you on the podcast, we will get that critic on the podcast first thing to talk with them about their work. If someone can crack the code.
- [28:35]
Dennis Scully
Fred and I are eager to discuss it. So write in, call in whatever you need to do, but we want this conversation to continue. All right, that's it for the news. But there's plenty more to check out on businessofhome.com including the latest showroom openings and advice on building a successful company culture. We'll be back in a minute. Minute. But first, a quick break. Crate and Barrel wants to remind you to join the Crate and Barrel trade program. Your design projects deserve seamless execution. That's where their trade program excels. From initial concept to install, Crate and Barrel's knowledgeable team provides concierge level assistance, product expertise and white glove delivery. Plus, members Enjoy an exclusive 20% discount with no minimum purchase on beautiful, high quality furniture and decor from Crate and Barrel, CB2 and Kraton Kids. For unmatched support and members only savings, join today@ CrateAndBerrel.com Trade this season embraces the art of outdoor living. From sunlit porches to al fresco gatherings, Jaipur Living's curated collection of indoor outdoor rugs brings effortless style to every open air moment. Designed to endure, crafted to elevate, these are the finishing touches for a summer well lived. Explore the collection@jpor living.com or followeypor living on Instagram. And we're back. I'm joined now by Lauren Hudson, who is the president and CEO of the Wells Company. Lauren joining us from London. Thanks so much for being here.
- [30:22]
Lauren Hudson
Thank you. Thank you for having me.
- [30:24]
Dennis Scully
I'm delighted to have you on the show and to have an excuse. We've got an exciting acquisition to talk about.
- [30:29]
Lauren Hudson
So very exciting.
- [30:30]
Dennis Scully
Let's start by breaking down this Wells company because there's quite a few entities under the vast corporate umbrella to this, right, this empire that you run in the interiors world. An empire that I feel has largely been built on you stepping in and acquiring companies that may otherwise have been going away. Starting with, I feel like the very interior design firm you hired to help you with your own home back in 2009. Is that right?
- [31:02]
Lauren Hudson
Yeah, exactly. Wells Design is an old interior design firm in Houston and was one of the first founded by Herbert Wells, who was very well known. He passed the business on to Jerry John Marr, who was also incredibly talented. And we started working with Jerry on our own home, which oddly enough, some of the first design schemes that he brought to me for our living room and other rooms in the home were all largely classic cloth and rose coming. So it was really Jerry and Wells design that introduced me to classic Cloth and rose coming. And then all these many years later, here we are. So I. I really wanted to change industries. I was schoolteacher in my 20s. I taught in the inner city public school in Houston. And. And then in my 30s, I worked at Arthur Andersen as a recruiter. And in my 40s, I was a housewife and a mom. And then I wanted to. I wanted to go back to work, and I did. I didn't have. I didn't want to go back to corporate America. I really wanted to learn the interior design industry, learn the business. And so I began kind of working with Jerry part time, and then I ended up working with him full time. And then that ended up leading to us acquiring the business when he wanted to slow down. And it was one of those deals where I was like, what a shame. Wells Design is such an institution in Houston. It would be a shame for all of that to just disappear. And so I thought of it as a great opportunity to learn the industry, which is really what I've ended up doing by starting the showroom and things like that.
- [32:53]
Dennis Scully
So you acquire the design firm, and then how does the showroom business present itself to you? When does that opportunity come about?
- [33:00]
Lauren Hudson
Well, do you know, this is like, here I am sitting at Robert Keim in London. It came about on a trip that I went on with Jerry to London. And Jerry is an illustrator and was represented by a gallery here in London. And he was having an opening, and so he showed me London through a designer's eye. And he took me down Pimlico Road. We went down Kings Road, and it was my first trip to London. I'd never been. That was 2016. And I fell so in love with London that by the time I left, I looked at Jerry and I said, I think I'm going to start a showroom I love, and I want it to be like an English showroom. And Jerry was like, that's a terrible idea.
- [33:50]
Dennis Scully
He says, it's actually a pretty challenging business. You might want to learn a little bit more before you jump in.
- [33:56]
Lauren Hudson
Exactly. That's a terrible idea. It's a really. It's a terrible business model.
- [34:01]
Dennis Scully
I immediately threw cold water on that notion.
- [34:03]
Lauren Hudson
What is wrong with you? I want no part of that.
- [34:06]
Dennis Scully
What have I not shown you here that makes you want to jump in?
- [34:10]
Lauren Hudson
But that was in May of 2016, and I opened my first showroom in February of 2017.
- [34:18]
Dennis Scully
Did not listen to him for a moment. You said, no. Naysayers aside, I'm just plowing ahead. And so what was the show so 2017.
- [34:30]
Lauren Hudson
What's the so well, you know, I spent a few years at Arthur Anderson being a recruiter and I swear I put the showroom together as a recruiter. It was cold calling and calling brands that I really liked. And I started off calling brands that, that Herbert Wells and Jerry John Marr, that Wells Design used quite a bit that weren't currently represented in Texas. And then that kind of turned to calling brands that I really loved, a lot of which were English. And then there you are. It was a cute little showroom and I loved it. And we were still doing design work at the time also. And so it was a showroom in front of our design office basically, and then ended up making friends with the showroom across the hall that was called Eloise Abbott. And our showroom when we opened it was called Wells Design Showroom. And so Eloise Abbott was an old, old showroom in Texas and they represented fortuny and some great brands at the time. And we ended up merging and acquiring the Eloise Abbott showroom, which kind of immediately gave us a Dallas location. And I'd been to Dallas a handful of times. I didn't really, other than a few college friends, I didn't really know anybody in Dallas, didn't have any Dallas industry connections. And then once we acquired Eloise Abbott and turned it into Wells Abbott, then I had a Dallas location. And I was like, well, I guess I got to figure this out. And so we did. We managed to figure that out, but it took a few years and the rest is history. That was in June of 2017. And then we kind of closed it at the end of the year to do a big, our first renovation on the space in Dallas. And we've just been building the showroom ever since. For me, it's been a really fun business to build. But Jerry may have had a point.
- [36:30]
Dennis Scully
So what did you later realize Jerry was trying to tell you by trying to dissuade you from getting into the showroom business?
- [36:38]
Lauren Hudson
Well, it's a tough business. The multi line showroom business is particularly tough, I think. And the margins are slim, the commitments are thin. It's 100% relationship driven. It's a handshake. There's no contracts in place. The only contracts that are in place are the rental contracts that you have with your landlord that you know you're not getting out of. And so, you know, it's a major commitment that you're making as a business professional. But it is, I think it's a critical business in our Industry. Without multi Line showroom rooms, there are no avenues for launching new creative experimentations, creative collections. It's really the sole avenue to entering this creative field. And it's a labor of love, I think, but I love it. And I know other showroom owners that I really, really respect who are also multi line showroom owners. Owners, you know, feel the same way.
- [37:44]
Dennis Scully
No, no, I agree. And it is so important, and I'm so glad to hear you say that, because it is such an important part of the industry that I never want us to lose and it is challenging. But let's talk about Rose Cumming in Classic Cloth, which we teased earlier. So you're introduced to them through this designer in your own home.
- [38:03]
Lauren Hudson
Yeah. And then suddenly fell in love with those lines immediately. And then when I went to work for Jerry for Wells Design, we used Classic Cloth and Rose Coming in lots of projects. And then as I did my own design work again, it was always first stop, first go to. And so when Dustin Fournier, the former owners of Classic Cloth and Rose Coming, found themselves in, you know, whatever, whatever, we call that a bit of a.
- [38:35]
Dennis Scully
Whatever hot water they were in, a.
- [38:38]
Lauren Hudson
Bit of a pickle, we ended up finding that we had an avenue toward acquiring them. And initially we were like, well, let's wait around and see who ends up acquiring Classic Cloth and Rose Coming and then maybe we can go after them for the showroom, see if they want to join our showroom. And then my husband and I looked at each other and said, why wouldn't we just go do it? And so we did. And we ended up, you know, obviously making the most ridiculous offer. And so we, so we, we got the lines.
- [39:12]
Dennis Scully
And so you feel your offer was the most ridiculous, therefore you were the winner.
- [39:17]
Lauren Hudson
We were, we were the winners. And, you know, but it was, it was such a dream come true for me because they are the fabric lines that I just love dearly. And at the same time that we acquired the brands, we also acquired the warehouses where the inventory was already. So we've got our warehouses in Kansas. And then we rehired the team that had already been working with Rose Cumming in Classic Cloth to a large extent, and the textile designer, Betty Tuva, who had been with Classic Cloth and Rose Coming for quite some time with Desen Fournier. She had moved back home to Africa, to Kenya. And I tracked her down in Kenya and said, betty, you showed up in.
- [40:05]
Dennis Scully
Your Range Rover and said, you have to come back, you have to return.
- [40:10]
Lauren Hudson
I have an offer you can't refuse. You're moving to Houston and. Yeah, and so she did. And she is such a technical genius and wizard. And I think anyone who's in the fabric business, there's so much technically to understand about weaving and printing and how to make fabrics. It's not just having great taste, and it's. It's very technical. And the relationships with all the mills and the printers and understanding how to. How to get from A to Z is very, very technically challenging. And without somebody who's really skilled at doing that, somebody who has really great relationships with the mills, who understands that part of our industry, I don't know how it gets done. So Betty is very integral to the success that we've seen since taking ownership of Rose and Classic. And I view Wells Design, I view Rosen Classic as being companies that I have the privilege of being a good steward to. And they were beautiful companies, great companies when I acquired them. And hopefully they'll leave my hands better companies and hopefully go to another generation of great stewards.
- [41:38]
Dennis Scully
And is that what you imagine? That ultimately someone will come along and do much what you did, recognize the value and what's so special about them and want to carry it on when you've exhausted yourself from all of this?
- [41:51]
Lauren Hudson
Potentially, yeah. Potentially, yeah. And it could be. Or it could go on and. And continue as a company and pass through to new leadership. Potentially. I don't know. I don't really know what the exit is. Probably another question I should have been asking myself.
- [42:09]
Dennis Scully
Well, I'm curious. As you've assembled. I mean, sure, there are lots of questions. You're thinking, I should have thought of that sooner, but here you are. One can imagine there being all sorts of wonderful synergies, or at least all sorts of learning opportunities coming at the industry from these various facets. Having the design firm, having the showrooms and the fabric brands themselves. Have you actually found that helpful? Have you learned from the many different sides of the business that you're in?
- [42:39]
Lauren Hudson
I really have. And we continue to do a little bit of design work. And I feel like doing that design work makes me a better textile owner, it makes me a better showroom owner, because you really understand just how it all comes together. And so I think the synergies in this industry are really exciting and inspiring. And so I find myself just driven by that because I'm just driven by pursuing things that I truly love. And I think when you do that, especially in this creative field, when we're building a new collection for Classic cloth and Rose coming, for instance, we're very careful to only pursue what we truly love. And what is. Is what is truly a match for the legacy of each brand. Rose Coming has a profile, it has a color palette, it has a sensibility. Same with classic cloth. And we're very true to those and also true to just what we love. And I think that's a great part of this business. The synergies that come from working with. And then, of course, as a showroom owner, working with so many other great fabric and furniture and lighting lines that I really respect and really love, watching how those companies conduct business and learning from that and then mixing all that together to form what certainly from a showroom perspective, has become a bit of a look for us. There's kind of the Wells Abbott style, and Wells Design has a style. Classic cloth and Rose Coming both have styles. And now with Vermillion, who I know we're going to talk about, there's a style there, too. There's a sensibility, there's a legacy, there's a story. And that, for me, is really compelling.
- [44:35]
Dennis Scully
So you mentioned Vermilion, and so let's get right into that conversation, because here you are yet again, stepping in and acquiring a company that might have otherwise gone away, it looks like. So. So let's talk about Vermilion, and let's tell people what Vermilion is. It needlepoint rugs. Is that basically what the business is?
- [44:57]
Lauren Hudson
Exactly. It's a. It's a specific kind of needlepoint called Grosse Point or Portuguese needlepoint. So Anne Brandow is a wonderful, wonderful woman, the former owner of Vermilion. She was one of the first brands to join my showroom, and she was stationed in Brazil with her husband years ago as expats. And she became friends with a wonderful woman down there who made these beautiful needlepoint rugs. And eventually, Ann and her husband were transferred to London. So as she transferred to London with her, at that point, you know, very, very good friend, she said, what if I, you know, take these rugs and sell them in London and see what happens? And one thing led to another, and she sold them in London and then sold them in the United States. And what was so important for Ann was, number one, her friendship with, you know, with her friend that was, you know, kind of the original. The original creator of this collective of stitchers. But all the stitchers are women, and they're not. These are rugs that are hand stitched. They're not made on looms. And so. So the canvases and the yarns basically are. They're like they're literally sent off into the homes of these women, female stitchers, who are able to stitch in the home and they literally stitch on their laps and they're able to maintain their home life and also make a living and contribute to the household in a financial way, which is really empowering. And so that was always, you know, Ann's motivation. You know, of course, making beautiful rugs. But for her in particular, it was really being an ambassador and a protector of this collective of female stitchers. And that to me is a really, you know, wonderful story as well. You don't see that everywhere in the rug industry.
- [46:57]
Dennis Scully
Well, so you mentioned Ann Brandow, who's running the business for many, many years. Did she come to you at some point and say, listen, I'm really thinking of winding things down or stepping aside? What was the conversation there?
- [47:12]
Lauren Hudson
Well, I actually approached her a few years ago just not wanting to make any assumptions, but at some point we're all going to slow down. And so I just wanted her to know that if the time came and if that was something that was interesting to her, that, that, you know, I would like to explore it. And Vermilion Rugs is her baby. And so she came around and approached me and we discussed it closer to the beginning of the year. And for her and, and for us, the most important thing was making sure that the business opportunity for these women continued. And they're just beautiful, beautiful routes. Rugs that are super special in, they're very niche in terms of, you know, rugs are everywhere. I mean, our showrooms are surrounded by rug, other rug showrooms, you know, so rugs are, it's a very competitive part of our business. But not every rug is, is a hand stitched rug. So, so that's, that's really, I think, what makes the rugs very special.
- [48:19]
Dennis Scully
Do you have any theories, I'm curious why the rug part of the industry blew up in the way that it has in recent years. And everybody wanted to tell me that they were working on a rug collection and that everybody wanted to capture more of this market. What happened? What happened? Because don't you think that it's just blown up into such a huge part of the industry and so many companies are asking for more square footage. Footage. To your point about multi line showrooms, they're asking for more square footage for their rug collections in so many places. And I'm curious about that.
- [48:58]
Lauren Hudson
I don't know. I don't know. Yeah, I was listening to your interview with David Netto and I think what he's doing with Woodard weave is so cool. And Woodward weave, I would say that was actually one of Herbert Wells favorite lines. Is that right? Yeah. And that whole the Americana nature of those designs, I think what rug companies like Vermilion, Woodard Weave, you know, some others that are very niche, they're. They're not trying to do it all. They're not. They're not rug companies, per se. You know, Woodard weave does. Does Americana really well. You know, Vermilion does Portuguese needlepoint really well. And. And so maybe that's the differentiator.
- [49:40]
Dennis Scully
Yeah. No, I'm thrilled with what. What David is doing, and I'm excited. And it's a reminder of some of these great, great companies that, as David and I discussed, people often didn't even realize they were seeing it so many times and not realizing that's who it was and what it was. And as you say, vermillion is so special and unique. And I'm so thrilled that you have preserved this craft and this look. And it looks like a lot of stair runners and other things that you've shown as well can be.
- [50:15]
Lauren Hudson
And that's all attributed, really, to Ann. You know, Ann really promoted the stair run, you know, turning vermilion rugs into stair runners. They're actually very, very hardy, very strong. And, you know, the. The wool that the. That the needlepoint is done in is just beautiful, beautiful wool, which is the original performance fabric, let's face it.
- [50:37]
Dennis Scully
Listen, I love you for saying that. I talk about that all the time.
- [50:40]
Lauren Hudson
Yeah.
- [50:41]
Dennis Scully
Performance fabric's actually been around for a long time. It's called wool.
- [50:44]
Lauren Hudson
Exactly. Pretty.
- [50:45]
Fred Nichol
It's pretty great.
- [50:46]
Lauren Hudson
Exactly. We've got several vermilion rugs in our house. Yeah. And they've been defaced in more ways than you can count.
- [50:55]
Dennis Scully
She has children. That's what she means. She means she has children. Children and dogs. Exactly. Are the best. You know, don't show me the rub test. Show me the children and dog tests.
- [51:04]
Lauren Hudson
Show me how to set up.
- [51:06]
Dennis Scully
Yeah, exactly. And, you know, you see these rugs that have stood that test of time, and then you find out what they're missing. It's wool. No. For sure. Well, so I didn't even think about you going head to head with David Netto. Good luck with that, Lauren. I don't know. I don't know.
- [51:21]
Lauren Hudson
I think it's great. I love it.
- [51:23]
Dennis Scully
Well, listen, I think the industry, if that's the kind of rivalry that we need, I'm all for it. I'm all for Preserving these great brands and the showroom business. So you've just recently expanded the showroom business to NYC and the New York Design Center?
- [51:39]
Lauren Hudson
I mean, well, I mean, who doesn't love Jim Druckmann?
- [51:43]
Dennis Scully
I mean, there you go.
- [51:44]
Lauren Hudson
Just such a dear. Yeah, the New York expansion has been really, really fun for us. And when we, when we expanded to Chicago, we went, we went full tilt to Chicago. It was a lot. So when we thought about expanding to New York, I was like, we're going to do this completely opposite to how we did it in Chicago. So I never want to do that again.
- [52:08]
Dennis Scully
We have learned some things from how we did.
- [52:10]
Lauren Hudson
It was really, really hard. I mean, I, I love the Mart and, and I love all the brands that I represent, but trying to get all that off the ground at the same time was really, really hard. So when we started looking at New York, it was. Every decision we make about expanding in the showroom is driven by Rose Coming and Classic Cloth. So if Rose Coming and Classic Cloth have a need in a particular territory, then that is where we tend to fetch focus. And so that was the case in the, in the New York area. And, you know, the New York market is so important and it was a market where I wanted to feel more connected. So we've gone in with Classic Cloth and Rose Coming and then we have, we have several other brands that are with us in our other showrooms that have joined us in New York. And we're, we're taking this opportunity to find our market, market to get our staffing right, to understand the, the New York market. It's a very, it's a very important market, obviously. And, and so you just want to get it right. And so we've been, we've been able to be very nimble and, and it's been really nice to have such a supportive. I mean, the, the building has been so supportive of us, as was the Mart in Chicago. But, you know, both, I love both those landlords and I know, I know.
- [53:34]
Dennis Scully
You'Ve got some other more challenging landlords.
- [53:37]
Lauren Hudson
I'm chock full of landlords.
- [53:38]
Dennis Scully
I know, I know, I know. Houston, we get it. We get it. No.
- [53:45]
Lauren Hudson
Yeah, but no, we're all. We're expanding in here. We've extended our lease in Houston. It's all.
- [53:50]
Dennis Scully
Despite the challenges, despite the floods and the floors and the list. Listen, people are making it work. Despite. Right. No, and I commend you for that and exciting to have you in New York. And as you say, you can take it a little slower and see how it goes. And I'm certain that when the time comes, Mr. Druckmann will make more room for you when you're ready.
- [54:19]
Lauren Hudson
Exactly.
- [54:20]
Dennis Scully
And will you be bringing Vermilion into the showroom at some point in the.
- [54:25]
Lauren Hudson
Yes, it has officially moved. And so it's hanging in our showroom at 200 Lex now and then also hanging in our other showrooms. For Vermillion. I really want to get things under control and right before we start trying to do too much. So for now, we're keeping distribution for Vermilion Limited to Wells Abbott and, you know, to our own showrooms where we have a little more room for experimentation and, you know, we can. You know, I'm not going to fire myself.
- [55:05]
Dennis Scully
It sounds like that supply chain is interesting and multifaceted. So I think. Right. You want a little time to get to understand that better.
- [55:13]
Lauren Hudson
Let's understand this. And. And then I also am excited about potentially doing. Introducing some new patterns and some new designs and maybe freshening things up a little bit in that. In that sense. And it's just hard to do when you're dealing with third parties who are. Who may not be as patient. So we'll experiment on ourselves and get it to a point where it may be something that other showrooms want to take. But. But we'll take our time on that.
- [55:46]
Dennis Scully
Yeah, well, eager to hear what you do with it and eager to come and see it. So I'm glad that it's here in New York. I'll have to pop by when I get back. I will see you in London next week.
- [55:59]
Lauren Hudson
Yes, absolutely. Wow. House. Cannot wait for that. Not to be missed, America.
- [56:06]
Dennis Scully
Indeed. So I will see you soon. But thank you so much for making the time this morning.
- [56:10]
Lauren Hudson
Thank you so much, Dennis. It was a pleasure. Pleasure.
- [56:19]
Dennis Scully
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, what caught your eye?
- [56:27]
Fred Nichol
A couple things caught my eye this week. First of all, Ken Folk caught my eye. There was a great, fun profile piece in the New York Times looking at Ken Folk. And I mean, first of all, it's an opportunity to just look at some great pictures of his project. So it's. It's worth a read for that. But second of all, I just think Ken Folk is such an interesting designer. He's like. He's on the west coast and he has that kind of like, San Francisco, like, think big. Just try things kind of energy about him. But his actual look is, feels very old school and glamorous in a way. So he's sort of an interesting kind of mashup of factors. And it's, it's no surprise to me that he's been incredibly successful in this day and age. So it's interesting to read it about what he's up to and how he works. So I recommend that. Second of all, I saw just before we hopped on the recording that our friends over at Frederick, the Schumacher Run magazine, although they are very independent, but Frederick has apparently signed a distribution deal to be in Hudson News, London's legendary Waterstones and Barnes and Nobles across the country. So big magazine distribution for Frederick, which is cool to see.
- [57:28]
Dennis Scully
Yeah, no, absolutely. That is very exciting for them. Good for them.
- [57:31]
Fred Nichol
Exactly what caught your eye this week, Dennis?
- [57:33]
Dennis Scully
Well, you know, Fred, people so often ask me what's your favorite show? What's the favorite interview that you've done on the BOH podcast? And I'm always very diplomatic about my response. I love them all. But truthfully, one of the favorite conversations that I had was the day that Amanda Hesser and Meryl Stubbs, the two founders of Food52, stopped by the old business of home offices that weren't too soundproof back in the day. This was back in 2019 and they had just received this great big funding round from the Chenin Group. Right. They were hundred million dollar valuation and it was, it was such an exciting time and we ended up having this great fun conversation talking about, talking about this amazing moment in time and, and then we, we start this week by learning that Amanda Hesser is finally stepping down in her role from Food52. What I imagine comes as a relief for Amanda, it's been, it's been an intense time for years as we've talked about and you've reported on quite a bit over the time. Food 52 got, got a lot of resources put behind it. Then it went off the, in a lot of directions and, and has had to scale a lot of that back. But I wish Amanda Hesser. Well, it's as I say, I'm sure it's an emotional time for her and, and a bit of a relief. But it was an incredible business that she and Meryl built.
- [59:03]
Fred Nichol
Yeah, very cool. I'm very interested to see what she'll, she'll do next. I noticed that she like everyone cools on stud sack these days, so I'm sure she'll be busy there. But, but absolutely seconded on everything. You just said.
- [59:14]
Dennis Scully
And finally, Fred, as we talked about, I am headed back to London.
- [59:18]
Fred Nichol
Stuff your suitcase with pocket squares.
- [59:21]
Dennis Scully
Yes. The opening of wow House is next week, so the gala's on Monday. And then wow House at the Chelsea Harbour Design Center. Think Kips Bay, but in a design center. What? How do they do that? Yes. It's pretty incredible. A lot of designers will be on hand, and I'm looking forward to. To that. So I'll be in London and you and Caitlin will actually be holding me on the fort for next week's show. I will not be here.
- [59:48]
Fred Nichol
So stay tuned.
- [59:49]
Dennis Scully
So, yeah, stay tuned for that. 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 at podcast at businessofhome. Com. This episode was produced by Fred Nicholas and Caroline Burke, Edited by Michael Cataneda. I'm Dennis Scully. Have a great weekend, and we'll be back with you on Monday.