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Business of Home Podcast
The Thursday Show: Inside Chairish's $85 million deal. Plus: Is ChatGPT getting good at design?
01:08:18
Host Dennis Scully and BOH executive editor Fred Nicolaus discuss the biggest news in the design world. Later, the founders of Chairish, Anna and Gregg Brockway, discuss their company's acquisition by Auction Technology Group.
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- [00:07]
Dennis Scully
This is Business of Home. I'm Dennis Scully and welcome to the Thursday Show. Later on, I'll be talking to Greg and Anna Brockway of Cherish, which was acquired this week. But first we're going to catch up on the news, including wayfair's surprising quarter, HGTV's cancellation spree and how good ChatGPT is getting at design. To do all that, I'm joined by Business of Home's executive editor, Fred Nikolaus. Hi, Fred.
- [00:34]
Fred Nikolaus
Hi, Dennis. How's it going?
- [00:35]
Dennis Scully
Great. How are you doing?
- [00:37]
Fred Nikolaus
I'm doing good. I feel like this is the first week in a long time where neither of us is getting back from some exotic trip to Copenhagen or Las Vegas. What a dull life we've led this past week.
- [00:49]
Dennis Scully
We've seen nothing, we've done nothing. I don't know what we're gonna talk about, frankly.
- [00:52]
Fred Nikolaus
Yeah, it's not like there's anything big in the news or anything.
- [00:54]
Dennis Scully
No, no, nothing going on.
- [00:57]
Fred Nikolaus
Well, let's quickly look back on Monday's episode. An interview with Salvis and Graham, the British Design d. Another great British design firm. This one was particularly good, I thought. What'd you think of it, Dennis?
- [01:08]
Dennis Scully
I agree. I was so thrilled to talk with them. They've got a new book out that they boldly entitled A New English Style. They're like putting it down that they are going to reinvent English style. But a really fun conversation, very thoughtful about the development of their business and how they thought early on about what they wanted their business to be after. Both of them having worked for very big figures in our industry and had to come out from under those shadows and find their own way. It's a really interesting conversation.
- [01:45]
Fred Nikolaus
Yeah, it was very candid. I mean, they talked about how for the first few years of their business they were not saying no to projects. Yeah, lots of interesting little tips. I liked how they talked about how because projects take so long to get published, how they would do product collaborations to sort of stay in the media. Just very thoughtful approach to their business. They're very charming people, as most British designers are, but also lots of little business takeaways. So something for everyone.
- [02:12]
Dennis Scully
Yeah, no, I agree. There's a lot to learn from them and interestingly, they're planning on expanding their presence quite a bit in the States in the coming year. So we will certainly be hearing more about them as they descend onto more multi line showrooms in the US Descend, I'm sure.
- [02:31]
Fred Nikolaus
Yes, we'll be descending on multi line showrooms. Look out.
- [02:35]
Dennis Scully
Yeah, you will be hearing more about them, I assure you. But by all means, enjoy that. Listen, we're going to take a quick break and then we'll get into the news. This podcast is sponsored by Ernesta. Instantly transform your client's home and deliver on their personal vision with Ernesta's high quality custom size rugs. Featuring a wide selection of premium materials and timeless designs, each of Ernesta's custom size rugs is cut to order and delivered in as little as two to four weeks. And with Ernesta's exclusive trade member benefits, you get exclusive discounts, dedicated support and unlimited samples. To learn more about Ernesta's trade program, visit ernesta.com boh and now on with the show. And we're back. Fred, I know there's lots of tariff news to get into, but we're not going to, right? Tell me we're not going to.
- [03:41]
Fred Nikolaus
We're going to give the audience a break and importantly, we're going to give ourselves a break from talking about. About tariffs. There has been, as there always is, a ton of news over the past week. Just today we found out that apparently President Trump is going to double tariffs on India to 50%, which you know, is going to make difference for a lot of people who are listening to the show. But I just feel like we need to wait until it settles a bit. Hopefully by next week we'll have a little more clarity and then rest assured, we will spend 15 minutes.
- [04:09]
Dennis Scully
Terrence Talk will be back.
- [04:11]
Fred Nikolaus
Yes, exactly. But for now, just sit tight, stay tuned and we'll come back and unpack it next week.
- [04:16]
Dennis Scully
In the meantime, Fred, we've got lots of acquisitions to talk about.
- [04:20]
Fred Nikolaus
Yes, tariffs aren't the only news this week kicked off with two major deals. Yesterday the news broke that Cherish was acquired by Auction technology Group for $85 million. On the same day we learned that workplace furniture brand Steelcase, a huge name, was purchased by Hnicorp, a less huge name in a deal valued at $2.2 billion. Let's start with Cherish. Now, I know you know Anna and Greg, the founders of Cherish, are going to be on the show later. So I don't want to take too much away from that conversation, but how did this strike you? We just, we just found out this about this a couple of days ago.
- [04:51]
Dennis Scully
It was interesting because it reminded me that we had had them in the early days of the BOH podcast. We'd had them to the old business of home offices back in 2019 when the business was just about six years in and it was so interesting to see all of the challenges that this business has had to face. Shortly after our conversation back in 2019, Covid would come, and then the housing crisis and tariffs. It's a business that has faced a lot of challenges, and I think this acquisition reflects that.
- [05:24]
Fred Nikolaus
Yeah, never a dull moment in Cherish's world, or indeed ours. It's interesting just to start with the money, which is $85 million. It's an interesting figure because at least according to the press release, Cherish last year made something like just over 50 million in revenue. When you look at an M and a transaction like this, you're thinking, okay, well, how much more than their annual revenue are they making on this deal? This is roughly a 1.5 multiple. That puts it in this weird Rorschach Y territory. It's not like they made out with 10x revenue. This is not like acquiring a crazy AI startup. But it's not like a fire sale. Well, they acquired it for pennies under the couch. So it's this interesting thing where if you look at this one way, you can say, man, it is really hard to make this business work. On the other hand, you can look at it and say, Cherish is one of the few that did make it work over the course of the past decade, and they're getting a not insignificant exit. I don't know. I'm sure you've talked to people about this. What are you hearing out there?
- [06:26]
Dennis Scully
Well, I think that's such a great point. And the business of home podcast, it got started talking to so many of the disruptors in the industry. And as you and I have remarked on many times, many of those disruptors are no longer here.
- [06:40]
Fred Nikolaus
They were themselves disrupted.
- [06:41]
Dennis Scully
Right. And so to your point, yes, here's a company that. That. That made it through. I think this was perceived by many in the industry as a very respectable exit. As you say in the documents, we learn that last year's revenues were a little higher than 50 million. So an $85 million acquisition gives you that good framework. And again, if you look at some of the other companies in the industry, unfortunately, we often point to first dibs. And here's a company that went public with a valuation near a billion dollars. Today, the company's round about 95 billion in market cap. 95 million, but yeah, 95 million. Excuse me. No, no, exactly. And has almost that much in cash. So, I mean, first dibs is literally trading just for about the cash value that it has on hand. And that speaks to again, just how Challenging this has been?
- [07:38]
Fred Nikolaus
Yeah. I mean, I feel like early on in the 2000s or even the 2010s, there was this idea that E commerce is going to grow so much, we can just take that framework and apply it to anything. It worked for Amazon. Why can't it work for antiques? And that was a good idea. But I just think it's proven that so many of these marketplaces, I don't even remember all the antiques online things that have gone out of business over the past. They all have these funny names. So many of them have gone away. I think it's a tough business. Every sale is tough. Getting the word out is tough. The stock is inconsistent. It's just difficult. I think it's like this is maybe not the exit that Ana and Greg had dreamed of when they first started the company, but it's respectable and a testament to hustling it out over the decade that they're getting an exit and that they have managed to build this respectable business. Briefly, I'm just curious what you think of Auction Technology Group. This is not a name I think we've ever said out loud on the Business of Own podcast. They are a big roll up in England. They own, probably most notably to American designers, live auctioneers, which is an obsession with most people I talk to every day. So it's kind of interesting to imagine live auctioneers and Cherish in the same portfolio. What do you think that'll mean for customers who use both?
- [08:47]
Dennis Scully
Well, I think it'll be interesting to see. Now, Cherish was very quick to say that they're not going to change the format and it's not going to become an auction site and that what potentially could be exciting is a lot of new product being made available. There's certainly a lot of fans of live auctioneers, as you say. I've spoken to many a designer who's working through that addiction problem.
- [09:09]
Fred Nikolaus
It's a recovery program for it. Yeah.
- [09:12]
Dennis Scully
Nate Berkus might have told me that there was an intervention with his family where they had to pull him away from the screen. But I think it's interesting to see this company find Cherish appealing and I can understand why. And that inventory, it will be interesting to see if they find some great synergies and make a lot more product and offering available to the designers here in the States.
- [09:41]
Fred Nikolaus
I'm interested to see if this has any effect on First Dib stock price. So far it doesn't seem to have moved the needle. I'm sure they're looking at this deal with the same kind of Rorschachi could be good, could be bad framework as we are. But this is an interesting development and stay tuned for Anna and Greg to talk about it in a little more depth in just a few minutes.
- [10:00]
Dennis Scully
Next up, we were going to talk about HNI and Steelcase, equally relevant names.
- [10:05]
Fred Nikolaus
For residential interior designers. I mean, this was a huge deal. So HNI Corp. Is this Iowa based enormous office furniture company. They bought Steelcase, which is another enormous office furniture company, of course based in Michigan. And these are not companies that are on, are the first go to for most residential interior designers. But this is a big transaction, $2.2 billion. It's a publicly traded company. They paid some percentage the listed price. It was a lot of money changing hands here. What's the most relevant frame here? Is this about Return to Office? Is this about Steelcase? What do people need to know?
- [10:43]
Dennis Scully
Well, exactly, it's a great point. I think this does tell us a lot about Return to Office. I think everybody, many wrongly assumed that we were forever going to be working from home. And J.P. morgan and Amazon and many other companies have said, no, we're the last ones.
- [11:04]
Fred Nikolaus
Dennis, you and I are the last ones.
- [11:06]
Dennis Scully
We're the holdouts. Fred and I know we've got some shiny new office, but you and I are not spending a lot of time there so far. Maybe that'll change. But interestingly, was also a lot of conversation around. So is this an opportunity to return to office? Do these companies just finally need to consolidate and have all of these overlapping distribution channels be brought together in a more constructive way? Is this a testimony of where some of these companies are right now?
- [11:38]
Fred Nikolaus
Yeah, I don't know. I mean, as you well know, I'm a huge expert on the office furniture business. So I know all about this. I mostly rely on other people. There's this great writer, Rob Kirkbride, who writes a lot about the office furniture business. So follow him on LinkedIn. He has a lot to say and I'm largely cribbing what he said. But he pointed out that Steelcase had maybe, I don't know, stagnated a little bit, hadn't really adapted. This is a company that probably made its bones buying 20,000 cubicles for GE or making 20,000 cubicles for GE rather huge cubicle systems that they sold to giant corporations. And I think that the future of work is a lot more about modularity and people working in a hybrid way. And I don't think people would necessarily accuse Steelcase of being on the forefront of that. HNI was at one point an upstart company. And the fact that this giant, venerable office furniture company is being purchased is maybe a blow to the ego of Steelcase. That's one way to look at it. And maybe they were a little bit behind the curve, but more consolidation in that world. I'm sure our friends at Rarefy will have a new, you know, a new person. What was it? The commercial furniture mafia? Well, this two families, the capos came together. The capos came together and put, put together a, you know, a new branch of the commercial furniture mafia. So look at, look out there.
- [12:55]
Dennis Scully
Well, what I think is interesting though, in the case of both of these companies, the, the acquiring stock did not act well after the news came out.
- [13:05]
Fred Nikolaus
Auction Technology dropped. HNI dropped. Yeah, the market doesn't seem to love this.
- [13:10]
Dennis Scully
No, I mean, and in fairness to Auction Technology, or in fairness to Cherish or whoever I need to be fair to at the moment. Fred, Auction Technology also came out and announced that they were going to miss their numbers and they had some other issues and margins were going to be lower. So they had their own sort of set of challenges. But in the case of hni, it certainly wasn't well received so far. And I wonder what that tells us about just how challenging this office market still is. So I think to your point, more consolidation is probably coming. I saw that Bo Stump remarked about that, saying, yeah, this Steelcase deal looks like that will be one of many coming soon.
- [13:51]
Fred Nikolaus
Yeah, all these deals are suddenly happening at once. It's kind of crazy. It's like someone shot a starter pistol and everyone's signing on the dotted line. So more news for us.
- [13:59]
Dennis Scully
Exactly. More to talk about on the Thursday show. In the meantime, we're going to move on and talk about Wayfair's earnings and I want to stress earnings here. Okay, Fred, for the second time in its history, Wayfair has turned a profit. The company's quarterly earnings report revealed that it pulled in a net income of $15 million. Its first bottom line in the black since COVID Big news.
- [14:23]
Fred Nikolaus
Yeah. And we should just explain like why this is big news. So as you just said, Wayfair, which is this, you know, does billions and billions of dollars of sales every quarter, has really never made money. They did briefly during the COVID home boom. This is the first time they've done it in a 20 plus year history under normalish conditions. So that is significant, even if it is a measly $15 million. So that is big news. And the stock really jumped on this, the other reason why this is really remarkable is that it's hard to know why this happened because they're reporting on a quarter, it's what, the worst housing market in 30 years, 50 years, 100 years. Housing is still terrible. And most companies of Wayfair is ill follow the housing market. It's not like consumer confidence was raging during this period either. So there was a lot of head scratching on the earnings call of wait, is the furniture business really better than we thought it was? What do you know that we don't? It was a fascinating call.
- [15:21]
Dennis Scully
It was a fascinating call. And as you say, so many analysts were saying, wait, so can we go back to why? Why did this happen? And interestingly, one of the answers that I thought was the most interesting. And this is what you often forget about the enormity of Wayfair and what a tech Dr. Company this is. This whole massive team, literally hundreds of engineers were busily working on some tech upgrade that they'd been doing for years. And that team has finally finished with that work. And so they've been able to refocus on the AI features on the site and lots of customer acquisition focus. And there were. There were just a lot of things that the team was able to work on in this last quarter that they hadn't been. And. And that actually just led to some more revenue perhaps.
- [16:11]
Fred Nikolaus
I guess I buy that, but it's like, okay, so our database is better. We suddenly made like 500 million more dollars. It was odd. It was interesting.
- [16:19]
Dennis Scully
Paragould came up in the conversation, which, as you know, it almost never does. But certainly Paragould's new store opening could not yet have contributed in a meaningful.
- [16:30]
Fred Nikolaus
Way to equipping $1 billion out of the first month of Perigold users. Exactly.
- [16:35]
Dennis Scully
When you.
- [16:35]
Fred Nikolaus
It was all because of a pod that the president made.
- [16:39]
Dennis Scully
Yeah, Rebecca Gins was on the show and suddenly. But what's interesting is that if you look at Wayfair's stock price and Wayfair had really been in free fall and if you see what the stock has done since the Liberation Day announcements, It's up about 300% since then. And so somebody knew that some better than expected numbers were coming and has been buying up that stock. Cause that stock has had a massive run and there's no other stock in that category that has run like that. So listen, I give Wayfair a hard time religiously because they don't make money and they've burned through about $3 billion, but finally they've made 15 million on 3 billion in revenue. So I have to say well done, well done Wayfair. And listen, and maybe this is a sign of meaningful things to come. I mean I had some conversations in Vegas with some furniture people who said listen, you can joke all you want about Paragould but I'm telling you if they build out 20, 30, 40 Paragould stores, that's going to be a huge player in this market because they've got the logistics, they've got the delivery program and now they've got all these computer engineers who are freed up. So a lot of people that I spoke to said Paragould look for that to be a retail force.
- [18:02]
Fred Nikolaus
That's really interesting and I'm sure multi line showroom owners will need to think about that a little bit because that's basically what. That's a version of what Paragould does. Or Paragould does a version of that, I should say. Yeah, it's fascinating. I'll just end my thoughts here by saying we normally tell people listen to the rh, listen to the Restoration hardware earnings calls because they're so fascinating and because they have a carnival esque environment. Wayfairs calls do not have that. They're much more buttoned up, they're a lot nerdier. But this one was very interesting. Niraj was talking about how influencers are starting to make a difference for their business, how they want to get into that more. He talked a little bit about AI. He talked about how one of the other thesis is here, just to briefly wrap this up, is that as all these mom and pop furniture stores that we keep talking about go out of business, someone's got to be getting that business, I think. Knock knock, it's Wayfair, it's Home Goods and it's Amazon. He talked about how this may just simply be them picking up the market share even though the overall market isn't doing well, they're gobbling up more of it. I don't know. The next call will, will be fascinating to be sure.
- [19:02]
Dennis Scully
I agree. I mean and to your point, this is a company that is trying a lot of different things. They're investing heavily in technology and they are. Maybe, maybe Fred. They're turning a corner. We'll see. But we gotta move on now Fred, because we're going to talk about ChatGPT.
- [19:20]
Fred Nikolaus
Yes we are. In 2023, a number of flashy new AI startups hit the market, promising to transform the design industry. In the years since, those tools have mostly stagnated. ChatGPT hasn't and I wrote 3000 words.
- [19:33]
Dennis Scully
About it and Fred wrote a lengthy article about it. And aren't you lucky industry that you get to read it? Should we break it down for people?
- [19:44]
Fred Nikolaus
Fred, ChatGPT can't write those 3,000 word articles. It would make him a mere tight, economical 600. And who wants that? Yeah, let's kind of dig in this a little bit. So we've actually talked about this on the show before, but around 2023 there was this huge surge of companies coming online, these very entrepreneury startups that were like reimagine home or home designs, AI or interior AI. And what they basically did was they took an AI generative AI engine, they slapped kind of a website in front of it. And what you could do is you could upload a picture of your living room or your bedroom and say, I want this in a Scandinavian style, or I want this in a Hollywood glam style. And it would generate a rendering that looked kind of like your living room reimagined in that style. And so I wrote about that at the time and was like, is this really going to matter? Are these sites good? Are they not good? What do they do? And this piece, this 3,000 words, was sort of a look at how most of these sites really have not gotten that much better.
- [20:43]
Dennis Scully
But what has gotten better?
- [20:45]
Fred Nikolaus
Well, yeah, exactly. ChatGPT has gotten better. And I don't think I have to explain what ChatGPT is really, but as most people know, it's a chatbot that wasn't really specifically designed with interior design in mind. It's for all kinds of things. But. But it has incrementally over the past few years gotten much, much better at interior design. And now what you can do is you can upload a picture of your living room or your bedroom and say, critique this like an interior designer. And it will give you reasonable feedback based on seeing that image. It can generate its own renderings. You can kind of go back and forth with it and have what I have found in my experiments to be a relatively substantive conversation about design. And it gives helpful suggestions. And so I was kind of at the beginning I thought like, okay, well maybe some of these tools will capture people's imagination. And they do have, you know, they do still exist and they're still in business. But like, what I've largely seen is that they're pivoting to be now more for like real estate brokers because they're not better at having like a design conversation. But you can do things like uploading like 50 images and all doing them in the same style. They're good at that kind of thing. Thing. So what these startups have all done is instead of trying to get better at the core interior design thing, they're just looking for new customers and trying to formulate the product in a different way. They're not really trying, at least in my opinion, trying to compete with designers While tools like ChatGPT have gotten so much better. I don't know. Have you played around with it recently, Dennis? Would you agree that it's improved at this kind of thing?
- [22:15]
Dennis Scully
I have. I'm always sort of fooling around, testing it, uploading some images, having it make some suggestions, and also just sort of see what level it's at. I was always so taken with MoDC back in the day and that technology and what they were capable of doing. And it's amazing how much easier it all is and far better with ChatGPT. And again, the sort of back and forth that you can have with.
- [22:47]
Fred Nikolaus
Yeah, the weird thing about it, I find, is that when you're going back and forth, it weirdly scratches the itch of talking to a human. I don't mean you convince yourself of thinking I'm talking to a person or that you believe it's alive or whatever, but it really, it feels conversational. And in a way, there's something nice about being able to be like, here's my ugly living room, not worrying, like, it's Bunny Williams on the other side of this conversation and she's going to judge my. My ratty rug. There's something that is sort of appealing about that. If you come to the interior design process a little intimidated. I mean, there's tons of flaws. It has problems. It will sometimes sort of change the architectural shape of a room in a way that's not very helpful. It'll invent products. Several times when I was experimenting, it would tell me to buy this anthropology chair that doesn't exist. You absolutely could not use it to replace an interior designer. I'm not saying that, but there's no question that it has gotten way, way better at sort of like the core interior design thing, which is interesting.
- [23:46]
Dennis Scully
It is remarkable how far it's come. That being said, and I think this is one of the big takeaways from your piece designers. How much should they worry?
- [23:56]
Fred Nikolaus
I mean, this always feels like the same question. It's like a little bit, but not a lot is kind of always the answer. I mean, I think, as we know, interior design isn't really about showing Pretty renderings and giving really simple advice. It's about making a project happen, which is very much in the real world and feels rooted in something that cannot be done by ChatGPT as it exists now. I think, like, in the near term, there's just so little danger because so much of what a designer does is rooted in, like, making things happen in the physical world. So I really would not worry about that, but I would worry a little bit about, like, you have the homeowner who's like, okay, I have this one little problem I want to deal with. And maybe in the past, they would have called a designer and that would have been kind of like a gateway drug. They would have seen how awesome it is to work with this person that would have blossomed into, like, a more, you know, a bigger relationship and turned into a great client. And now I do wonder if that kind of person is maybe going to use AI to solve their little problem and never really reach out to a real designer. You know, for someone who wants to work with, like, Heidi Kelly or Bunny Williams or whatever, whatever, they're going to go for the real thing, that's undeniable. But I think that the gateway drug aspect, I do wonder about that a little bit. I guess time will tell.
- [25:10]
Dennis Scully
Okay. Okay. So it sounds like you're shifting a little bit there and thinking, yes, maybe it is something for the design industry to worry about a little bit.
- [25:19]
Fred Nikolaus
It's something for the design industry to think about.
- [25:21]
Dennis Scully
I think that's to think about, to be mindful of. Yes, there you go. That's a more positive spin. Listen, AI is ultimately coming for all of us. Let's not pretend. But sure. But for now, just keep an eye on it.
- [25:32]
Fred Nikolaus
All right? Right.
- [25:33]
Dennis Scully
We're going to move on now, Fred, to talk about hgtv, the popular home renovation network appears to be on a cancellation spree. Accessing a total of seven shows in recent weeks. Fred, last week you explored what this says about the state of the design media, and what did you find?
- [25:51]
Fred Nikolaus
I found that it's not good. The state of design media is not good? No. Not to be glib, but, yeah, it was kind of crazy because we've been talking about HGTV a little bit more. More than usual recently and going like, how are things going over there? I sort of feel like we have found. I mean, over the past month, they've canceled seven shows and networks cancel shows, but seven in a row is a lot. And it's almost turned into this media moment. Like the stars are coming out and Having to issue statements about how we still believe in hgtv, it really has turned into kind of like a publicity storm. I don't know. Have you been following it?
- [26:27]
Dennis Scully
It's forced me to read People magazine, Fred, which writes about these shows quite a bit. And so I've been spending a lot of time reading about the cancellations through that. But I do think that all of this is coming at a time where there is such a dramatic shift in the landscape and we should talk about it and break down all of the reasons why this is happening. Happening?
- [26:51]
Fred Nikolaus
Yeah, I mean, I think, like, there's a few things. One, and I know we're supposed to be taking a break from tariffs this week, but like, tariffs weirdly kind of play into tariffs. It's strange, but like, it's not just tariffs, but like inflation overall on construction projects actually do kind of matter because, like, you know, as we all know, construction and building and renovation has gotten so much more expensive. At the same time, real estate shows like, we're going to flip this house have, you know, stayed more or less the same cost. And so that's why HGTV is sort of of like pivoted away from renovation design towards real estate, or at least that's part of it. And that's maybe the reason why they're canceling a lot of these shows, which are largely renovation shows. So that's one thing, but kind of the other bigger story behind that is like, why do they even need to save money in the first place? And it's because it's kind of staggering when you look at these numbers. So fewer people are watching HGTV than they were even 10 years ago. From 2017 to this year or last year, I guess they've lost like half of their audience. I was blown away.
- [27:51]
Dennis Scully
Well, and again, we've talked about this cord cutting phenomenon for years and the rise of Netflix and the rise of all of these streaming services and how many people got rid of their cable package. And yes, naturally it leads to so many less people watching HGTV and watching all of these shows. And then there's also been this huge consolidation in the industry which we should talk about. About.
- [28:19]
Fred Nikolaus
Yeah, well, I mean, you know, this gets into. Into the weeds on some corporate wheelings and dealings. But HGTV's parent company, or used to parent company, used to be called Warner Bros. Discovery, which was a merger of Warner Brothers, the studio, and Discovery, all the cable channels. And the thought at the time was to put them together and really win at streaming, you know, but that kind of didn't really happen. And recently those two companies split apart. And on one side you have Warner Brothers, on the other side you have Discovery, which, you know, Discovery is a bunch of cable channels and a few other assets. And HGTV is in that bucket. When they split the companies apart, they gave all of this considerable amount of debt and they said, we're going to put it all on Discovery. The CEO of Discovery now is this famous cost cutting guy who is tasked with getting rid of this debt and trying to manage these cable channels which are shedding their audience month to month. Even more worryingly, it's like HGTV doesn't have a lot of young viewers. It's like I forget the numbers exactly. But it's like there certainly is not a new generation discovering the channel the way that there was 10 or 15 years ago. And so that puts it in a really tight spot. And that's, I think, why you're seeing these cuts.
- [29:28]
Dennis Scully
I agree. And so everyone is consuming programming like this in such a different way. They're off of cable and they're online consuming it in their. Whether they're watching TikTok videos, whether they're on YouTube, whether they're finding it in other ways. And that's what the whole television industry has been grappling with for years. And you're seeing it happen so much more rapidly now because as you say, these shows were very expensive. I mean, imagine $500,000 to produce an episode of one of these home reno shows. And you have to wonder too, how much interest has there been in these shows in the last few years when we're in the midst of a housing crisis and a housing affordability crisis, and the home furnishings industry has been struggling so much, how many people are demanding more programming around fixing up your house? So that's also been a factor. So I mean, it really makes you wonder whether these kinds of programs will even be around in the next decade or what that will look like.
- [30:37]
Fred Nikolaus
Yeah, it's funny, I mean, they've been around for like since the 90s, really. And so it's tempting to think like this is going to happen forever. Like of course there will be renovation shows forever, but it's really, it's been a relatively short lived phenomenon. And it's possible that they're just this genre that we've all grown so accustomed to just won't exist in 10 or 15 years. That's possible. And I talked to a few people for this story and most of them were like, yeah, HGTV is going to exist in some format for the next 30 years. I don't know if it does. I don't think it'll look anything like it does now because the cable numbers are only going to go down from here and it's going to have to reinvent itself. Almost like, I don't know, I could see a version of HGTV where it's almost like a talent agency where it connects with the star and then plugs them into, okay, we'll put your show on YouTube and then we'll get you on TikTok. But it being a cable channel, I think the days are not shortly numbered, but they are numbered. And I guess what that speaks to for me is, well, what does this mean for designers? And I know designers have a love hate relationship with hgtv, but it has kind of been a pathway to help people build careers or build a certain kind of career. And I think that the reality now is there is no paycheck or celebrity to be gained through this medium for much longer. I think at this point you really have to be getting the word out yourself. I think most people already knew that. But this really drives the point home. It's all about TikTok. It's about YouTube, it's about Instagram reels. Start there.
- [32:03]
Dennis Scully
For me, it's interesting that this comes at a time of some HGTV nostalgia and people missing those old shows and they're popping up on social media feeds with, oh, remember these crazy shows kind of thing. But I think that speaks to even more of the fact that they seem outdated and just a thing of the past. And all of the new ways of consuming content have just taken over. And I think we'll continue to. So we'll keep watching it, but on hgtv, probably not for too much longer. All right, that's it for the news. But there's plenty more to check out on businessofhome.com including a roundup of the latest new hires and how a community college is training the next generation of upholsterers. We'll be back in a minute, but first, a quick break. We're taking a quick break to remind you about Ernesta. Looking to transform your client's space? Try Ernesta's custom size rugs made to fit their unique measurements right down to the very end. Allow them to sink their feet into the softest wools or live carefree with a durable, easy to clean, family friendly rug all ready to be delivered in as little as two to four weeks. Learn more about Ernesta's trade program@ernesta.com Boh that's ernesta.com Bohemia and we're back. I'm joined now by the founders of Cherish, Ana and Greg Brockway, who have some big news to share. Ana, Greg, so nice to have you back.
- [33:46]
Anna Brockway
Thanks for having us.
- [33:47]
Greg Brockway
It's nice to see you again, Dennis.
- [33:49]
Dennis Scully
Do you know it's been six years since you were in the business of home offices. When we last had you on the Show 2019, can you believe that?
- [33:58]
Anna Brockway
Oh, my gosh, I remember that day. It was exciting. Thanks for having us again. It's kind of becoming a six year anniversary.
- [34:05]
Dennis Scully
Well, I don't know how we waited this long to have a conversation with you both. Before we jump into the big news of the day, I want to just give a quick explainer about Cherish for those that might not be familiar with the whole online marketplace that the two of you have built over the last this many years. What is it, 12 years now?
- [34:28]
Anna Brockway
12 years, yes.
- [34:29]
Dennis Scully
Yeah.
- [34:29]
Greg Brockway
Oh, it's been quite a journey. Yes. So Cherish came out of a personal experience. Ana and I, we moved four times in three years. We always had things that we couldn't quite fit in the new home. And we were always looking for things that were hard to find. And so we decided that the world needed a better, easier way to buy and sell home furnishings. And here we are. We launched Cherish. Initially, it had, you know, a limited number of items, mostly from our most recent move. People liked it, people were buying, people were selling. And it, and it really, it's been a terrific, it was a terrific start and it's continued strong ever since. Certainly the last 10 years have seen some big challenges, but overall it's been a terrific journey. And we're, you know, we're happy with the progress we've made with the team and the community we work with.
- [35:16]
Anna Brockway
And also over time, our buying audience has changed. And so we still have tons of, of just ladies and guys who love to decorate their homes. But increasingly our business is done with the trade and interior designers. So that's kind of an important part, I think, of our trajectory story.
- [35:33]
Dennis Scully
And as Greg was pointing out, so little did you know, there were a whole host of challenges that were going to be thrown at you. So we were sitting together back in 2019, naively having no idea of what was about to happen to the world. We were feeling so good and optimistic. And then Covid came and created all sorts of craziness for the industry. Tell me a little bit of what that looked like for you and how you experienced that and then coming out of it. And here we are with today's new challenges with tariffs and a whole host of other issues.
- [36:11]
Greg Brockway
But tell us, our Covid experience was initially terrifying and then it was remarkably positive. There was a huge silver lining in this global tragedy that was happening where everyone was nesting and refurnishing their home and lots of good things were happening that kept us and our team very busy. And then of course, we all lived through the interest rate rising, mortgage rates rising, home sales shutting down. And it changed from a terrific tailwind to a huge headwind, which has been a challenge for us and the whole industry. So I think you alluded to tariffs. So the challenges just keep coming. And I thought we were going to try not to talk about tariffs this week.
- [36:50]
Dennis Scully
Dennis no, I know, I know we were going to try not to talk about it on the show, but it always creeps in. And of course, I mean, as you say, the housing market challenge and listen, I mean, I really can't remember a time where we faced as many challenges all at once like this over these many years. And the furniture industry has, has just gone through so much. And so I'm wondering if, and we should say so we're having you on to talk about this great big news. Hey, guess what? Cherish is being acquired by atg and we should talk about Auction Technology Group. A lot of listeners probably know them as the Live Auctioneer site, but they have several other big auction sites as well. And this is big news. So take me through some of the details around this.
- [37:42]
Greg Brockway
First, who is atg? I mean, this is a public company headquartered in London. It's a company that I've known for several years and they've grown to be a global leader made up of several online marketplaces for curated auctions. They power many of the most trusted platforms here in the States. We know them best as Live Auctioneers, which is a service that many of our sellers are active, active users of. So some terrific opportunities there. And in Europe, they're better known as either Lattissimo, which is a Hamburg based auction marketplace in Europe, or as the Sale Room, which is a business headquartered in London. So it's a brand and a service which is very complementary to Cherish or has many complementary brands that our community is probably more familiar with. And the opportunity is what can happen when you put these things together? How can we make buying and selling easier and better for everyone? And those are the things that got us excited about taking this step and selling the Business, basically entrusting our baby to the leadership team at atg. This is a business our team has put a tremendous amount of energy and love into over the last 10 plus years. And I think we're builders. We like to put things together and sometimes that means we acquire the pieces that we don't have. And here it's a case where we, we're selling what we have to create something bigger and better for our team and our community. And I have a lot of confidence that the brands are going to go on to do even more exciting things.
- [39:12]
Dennis Scully
Well, and with that in mind, Greg, tell me a little bit about how conversations got going to make this deal possible and why you thought the timing was right to do this now.
- [39:24]
Greg Brockway
So the short answer is we've made a lot of progress. So one of our, we talked about the tailwinds turning into headwinds. And so at that point we said, hey, hey, we're not good at predicting how quickly the industry's going to grow or shrink. Let's just get profitable and make sure that we can comfortably sustain ourselves. And so we shifted our energy towards reaching profitability. And I'm proud that the team has now delivered five consecutive quarters of EBITDA profitability and businesses on a much sounder footing. But when you cross a milestone like that, when you reach an important goal, you say, okay, how do we go bigger? How do we do more? And so we started a strategic review process and we started talking to people. What are the things that we don't have that we could use or who out there could help us go, even get bigger and go faster? And so through that process, we met the team. It's a very talented team at atg. And again, the opportunities to put the businesses together and deliver more value for our community of buyers and sellers and give more opportunities for the team to grow. And it was a very natural extension of our mission and our goal and made a lot of sense.
- [40:34]
Dennis Scully
And did it feel like so often there's the question of, so are the founders going to stick around for a while and help build this out, or is it an indication that, okay, they're wrapping up their time? I know you've had several startups in the past, Greg, that you've sold successfully. I mean, how are you feeling longer term for yourself and what you're imagining for the two of you?
- [41:02]
Greg Brockway
No, an and I are not leaving the field completely. We are helping with the transition. We're going to make sure things are set up correctly to be successful and we will become active advisors for several more years. So, no, we definitely want to make sure that this new chapter is a successful one, and we'll do whatever we can to make that happen happen.
- [41:25]
Dennis Scully
So the sustainability story, we're always hoping that that story becomes even more meaningful to people. Do you have a sense that that is really taking hold more?
- [41:38]
Greg Brockway
Well, I'm always looking for silver linings, Dennis. And yes, even in this crazy tariff environment we've been living through, there is a silver lining because vintage is tariff free. The vintage product that we have already located here in the US has and will continue to be tariff free regardless of what happen between the US And Europe. So that has been a real positive for us as a business. Unfortunately, it has made it challenging for the broader design industry. But in that regard, we're getting a slightly bigger piece of the smaller pie, and it's introducing people to how good it is to buy vintage.
- [42:17]
Anna Brockway
You were asking about the sustainability message, and it's so funny because my life before this was in the fashion space, and I worked with Levi's on all these sustainable programs to reduce water usage. And what I learned when I was doing all that in the fashion space was that sustainability is important, but it's rarely the first driver in terms of purchase decision making. In other words, style first, quality, of course, right price, and then jump ball goes to sustainability. I mean, there is a segment of people who it really drives 100% of their decision making. But for most people, it is kind of that final. I'm on the fence. I'm looking at two separate things. The right thing to do is to go for the sustainable option. Then we find the. That's what all of our research is. And that's consistent with my experience in fashion as well.
- [43:03]
Dennis Scully
It does. I mean, what our examination of the research suggests is that for some reason in Europe, it seems to be much more meaningful to people than it is in the States. And so we haven't sort of caught up with whatever that mindset is that, to your point, makes sustainability a greater priority for some of our trading partners. But coming, coming back to the tariff discussion, what I'm curious about is, so I get it if people are selling things from their home or what have you here in the States, but you also obviously have this big European operation, and I'm assuming lots of that inventory is coming into the state. So how does that come through and how do you deal with that?
- [43:46]
Anna Brockway
So I think when we were dealing with Europe, one of the really important things as all these tariffs were changing was, you know, that's obviously something unfortunately we can't control. But what was really important and that we, I think uniquely provide versus our competition is full clarity for people who are shopping with us on European product about what their potential exposure is. Because the worst thing that can happen is you buy something, it shows up and you get this huge tariff bill you didn't know about. So what we were uniquely able to do and still are isolated is to tell you with confidence what we think the landing cost, when you check out, we give you that scenario. And the good news is with the recent reduction in tariffs or threatened tariffs now implemented, they're actually lower than what was threatened. And so we are actually giving refunds to some people who bought during that time period to reflect that the reality was less than what it could have been. So. So first advantage is of course, having most of our inventory already here. And then the second advantage is if you do fall in love with something from Europe, you know kind of what the maximum exposure is and what you're going to get. And we're not going to be surprising you. And I think particularly for designers who need things approved by clients and nobody likes to surprise Bill, that's been really a point of differentiation and quite helpful.
- [45:05]
Dennis Scully
Yeah, I mean, and that's a great point. And one of the challenges that so many designers have been raising is this price uncertainty. And we keep waiting for this to show up meaningfully in the economy. The confusion around all of this, the sort of inability to make big decisions about investments, has that shown up at your doorsteps in a meaningful way?
- [45:31]
Greg Brockway
Well, I think we're fortunate that the bigger slice of a smaller pie, meaning vintage, is relatively more attractive, has been a positive for our business. Business. Do we worry about how long that is going to be sustainable and what the future holds? Absolutely. Uncertainty is the buzzword that I think we and everyone else is experiencing. And we are hearing about it from our community of trade buyers too, where projects may not feel quite as plentiful or as easy to land as they have been. And what does this mean for the future? But as we were saying before, because. Because we really are mostly here in the U.S. have product here in the U.S. when we do source out of the U.S. it comes from Europe, which is not the most highly tariffed place. So what we're seeing is pricing is going up more significantly for newly made product and that's making the vintage look relatively more attractive. Introducing more people to the sustainable planet friendly way of furnishing your home in a stylish manner. All those good things, but also smart.
- [46:33]
Anna Brockway
From a pricing standpoint because to Greg's point, for all the newly made stuff that's being being manufactured in Asia, the tariffs there are far more significant than what we're seeing even in Europe. And so tariffs aren't helpful to the European business, but compared to buying newly made, it's still cheaper.
- [46:50]
Dennis Scully
What are you seeing with regards to online adoption? So I often I talk to more established designers and they say, oh my young team, they spend all their time on the computer and that's the only thing that they look at and everything's being done online. And then I talk to other people and they say, oh, we've got this great website but our clients aren't taking advantage of it and we wish that more people were coming to us. Greg, what's your sense of adoption levels in our industry?
- [47:21]
Greg Brockway
One of the macro metrics that we pay attention to is what does online penetration look like? And that's business school speak for what is the portion of an industry that is purchased online? And for home furnishing, it's still relatively small. When you compare home furnishings to fashion or other categories, home furnishings has a long way to go to catch up with the other industries. So I think online will continue to grow faster than the total industry for the foreseeable future for sure. In terms of how do people like to buy? People want it all, they want it online. They'd like to be able to visit in person, they would like to be able to sometimes do both. So I think omnichannel is the buzzword that you hear a lot about when you ask retailers what's happening. That's the way customers shop they like to have online and in person. We see that most dramatically when we do physical events. We do an occasional pop up. The one you're most familiar with probably is what we've done with Bergdorf. And there we definitely see the halo effect of more people seeing Cherish and the products that we have. So that is helpful in that we sell a great volume of product through Bergdorf directly, but it also is we see more people coming from the broader New York area to the Cherish website.
- [48:41]
Anna Brockway
And I think that the answer to that question is really unique for one of a kind product because when you put yourself in the position of a typical retailer who has a set range of sofa styles in a variety of fabrics, physical retail as a starting point, place that then is followed up online or you can see where you can maximize that square footage in a very clear way with one of a kind product. Whatever you have in the store isn't what you have online. So it plays a really different role. And so I actually think that because of the lack of inventory depth that comes with one of a kind product, the endless aisle of digital is where it's at. And then we use physical retail, to Greg's point point, as a way of raising awareness for the brand and introducing people to really the fabulous sellers that we have on the site, which make the site kind of what it is and how unique and wonderful their inventory is. And sometimes that connects right there in the store, but often they come back online and discover that product from either that seller online or from one of the many other sellers that we have online. So I think the answer is really unique. Unique because of the nature of our one of a kind. And we deal all in singles.
- [49:55]
Dennis Scully
Yeah, no, that makes sense. I'm wondering what your sense, Greg, about. So we look at this $85 million acquisition for you, right. Which interestingly, and this sadly, speaks to the hard times that FirstDibs has fallen on since coming public. First dibs valuation is not that much higher. I believe it's in the $95 million range. So, I mean, it suggests that this has been a challenging market environment for a lot of these online marketplaces. Do you get a sense that things are turning, that we're seeing more positive signs of business conditions? What's your take?
- [50:42]
Greg Brockway
Well, great question. Now that we're part of a public company, I have to be careful about what I say about, about other public companies as well as ourselves. But what I could say about valuation and marketplaces is they really care about growth and they really care about profitability. And the companies that get the highest valuations are the companies that deliver both of those to their investors. And I think in that regard, our progress in terms of growth and in terms of reaching and sustaining profitability has made Cherish a very attractive, attractive asset for atg. So I think it speaks well to what the team is, our valuation, while in this world of unicorns, it's not that, but it's a very strong and respectable outcome for the team and the investors who've helped us to get here.
- [51:36]
Dennis Scully
No, no, it makes sense. I'm wondering what your sense is about whether we're. I keep looking for green shoots. I keep hanging on home builders sentiment numbers. And I'm trying to be encouraged about Wayfair turning profitable again in the most recent quarter, which is something they've only done one other time during COVID So I'm trying to think, okay, and interestingly, to the point about showing up in person, I have to believe that part of that is they've built a paragould store in Houston and they've got another one coming soon. They've got a location outside of Chicago for Wayfair and they've got more of those coming. It seems like to your point, Greg, about Omnichannel, it seems like even the die hard online companies are waking up to yes, I do need to physically show up in some big markets in a big way. And I wonder again if that's a positive sign of things to come or.
- [52:31]
Greg Brockway
What your sense is the dynamic, very, very large industry, very, very fragmented industry. I think consolidation is one of the things that is certain to continue in and around our space. Sometimes that's people, people going out of business, unfortunately. Sometimes it's companies coming together to find more efficient and effective ways of reaching a broader audience, which is what we're doing here to try and deliver more value to buyers and to sellers. Is that a green shoot or is that just an ongoing dynamic of what's happening? I'm not sure. I think there's a lot of reasons to be optimistic that we're not going to continue at the record low level of home sales, which is really the leading indicator of home furnishings growth. But I also don't see any reason to think it's going to get worse from where we are today. And I think there are reasons to believe it's going to get better. I've gotten out of the business of trying to forecast when mortgage rates are going to start coming down. That would have been, I would have been wrong so many times by now. It's, it's a little bit embarrassing, but I do think they're unlikely to stay where they are. And in the meantime, while people are waiting for them to go down, I do think people are acclimating to a higher baseline level and it will just begin to pick up regardless of what the broader interest rate environment does. So is that a green shoot or is that.
- [54:00]
Dennis Scully
Well, no, exactly. And I think part of the reason, and you tell me, but, but I mean, part of the reason that I'm guessing you were able to get to that EBITDA profitability that you referred to earlier is that you did what you had to do to navigate through some pretty challenging times and whatever that meant, restructuring wise within your own organization and finding greater cost efficiencies in the same way wayfair has been doing quarter after quarter. I mean, they kept losing money and saying, but we're cutting costs for cutting costs. And finally they seem to have found that number where it doesn't look like sales increased dramatically, but they increased enough where it finally.
- [54:38]
Anna Brockway
Yeah, I mean, I would say for us, Dennis, to answer that a little bit more specifically, it's what you just said. So getting more, you know, higher expectations for return on ad spend, that kind of stuff, the cost cutting that goes with that. But also I think for us, it's gotten, made us focus even more on who are most profitable buying segments and really put an emphasis on the trade. And that's been an important part of our story here, here, which is the percentage of our business that's being done with the trade has grown and grown and grown during this time period. And as anybody who operates in the high end space knows, if you don't have the trade, you don't have business. And so I would say that, I wouldn't say we woke up to it. It's always been important. But I think just putting an increasing emphasis on that component of our business has really been helpful.
- [55:25]
Greg Brockway
And the other sort of lever that we've pulled very aggressively is automation. So we're a marketplace, we're a matching marketplace. Right? We have listings from all over the world and we have buyers from all over the United States and Europe and actually the rest of the world too. And our job is to help those buyers find what they're looking for, regardless of whether that piece is where that piece is and get that piece quickly, safely and as cheaply as possible from the seller to the buyer. That is partly a manual process, but really it's a systems integration process. It's enabling, enabling buyers to find very quickly what they're looking for and try and inspire them with things from our community of often trade that we like to bring in and help celebrate the beautiful things that we have. But it's partly through improved search and discovery. And then on the seller side and the shipping side, gosh, that was one of the really hard things we've had to figure out. How do we do that at scale, quickly and relatively cost effectively? That is a very hard problem to solve too. And we don't do it with people, we do it with smart systems talking to lots of different shoppers. Because the right answer across town in New York is different from New York to London or London anyway. It's never the same answer. It also depends how big and fragile the piece is. The permutations are very big and wide and it's easy to get wrong. And fortunately we, we think we do it as well as anybody, if not better.
- [56:53]
Dennis Scully
Well, so, Greg, are you opening the door for me to have an AI conversation with you and for you to tell me all the magical ways that you're incorporating AI and how all the efficiencies that you found. Go ahead, Dennis.
- [57:05]
Greg Brockway
I thought we were. I thought we were going to avoid tariffs or getting tariffs and AI into the same conversation.
- [57:10]
Dennis Scully
Much rather talk about AI than tariffs. Come on.
- [57:13]
Greg Brockway
Is it transformative and game changing? Absolutely. Is it, Is it something we think can make our business better? Absolutely. Are we using it in every possible way yet? No, we're figuring it out like everybody else. It's helping us to get our imagery in the right place more quickly and more cost effectively. It's helping us address customer service issues quickly and effectively. It doesn't mean you can't talk to a person. We think that's going to continue to be really important. But there are some, some simple questions that can get answered more quickly and more consistently by AI. And the discovery process. I mentioned the discovery and the discovery and personalization is another area where I think AI can really play and is increasingly playing an important role. Because, Dennis, what you're looking for today may be related to what you're looking for tomorrow, in two weeks from now and a month from now, because we start to understand, understand what kind of a stylish guy you are. And for other people, it's very different look and feel of what they're looking for. And we can help bring that to life because the more listings you have, the more likely you have something that you're looking for. But, boy, the harder it is for you to find it. Because when we had 35 items that came from our house, you could see everything in five minutes. Now that we've got a million and a half items on the site, five minutes is hard. But we want to make that five minutes absolutely as valuable and productive as possible. So we're paying very close attention to it.
- [58:44]
Dennis Scully
Sure. Hugely transformative. And I wonder, getting back to this notion of this acquisition allowing for the next growth stage for Cherish, what are you hoping that you might be able to do with this big publicly traded British company behind you now, I think.
- [59:06]
Anna Brockway
For shoppers of going to, you know, mean a lot more selection. The other thing, I guess I would say is on the seller side, which I think has enormous opportunities. So we know that a lot of our dealers who sell on Cherish buy on live auctioneers. And one of the things I consistently hear across our dealer community is I got into this Because I love buying and selling and, you know, finding beautiful things, but the data management part of it is such a bear. And so the extent to which we can help people move from sourcing to listing quickly and kind of take the friction out of that process, I think will be really powerful.
- [59:41]
Dennis Scully
And in terms of people wondering what big changes they're likely to see on Cherish in the near future, because people get anxious when they hear a company's being acquired and they speculate wildly about what changes might or might not be coming right now.
- [59:59]
Anna Brockway
I mean, all the things I just described take time. So that's going to be time to defend, develop. I mean, the vision for the company is that the curation standards for Cherish stay the same. The brand voice and the brand distinction, which, you know, a lot of that comes from my heart, is still going to be there. I'm still staying involved with the company on that level. And I think that, you know, all of that will stay in place.
- [60:23]
Greg Brockway
Right now you mentioned anxiety, and I can totally understand how that is something when the big announcements like this happen, happen. I thought you were going to ask me about private equity, which is a source of much of the anxiety and what often happens. And that's not what this is about. We are selling and integrating.
- [60:41]
Anna Brockway
It's not a private equity company that's buying us.
- [60:43]
Greg Brockway
It's a publicly traded operating business that is in and around the industry with brands that people know and are familiar with. So I think from that regard, I just want to make sure people are not anxious about what it means. Like honestly said, we are enabling the recommerce industry. It's very consistent with the mission and why we started Cherish. We want to fix what still feels like a broken secondary market for design objects. Right? It's a huge industry. It's a huge opportunity. It's a problem that hasn't been fixed yet. And I think working with the ATG portfolio will help to take a really important next few steps forward to the solution.
- [61:19]
Anna Brockway
And then just to answer your question, also to Dennis, I think one of the things this opens up for us is scale. So as a small company of 100 and Greg, you can get me right on the number, but I think we're at about 140 people. The choices have been hard, right? Like, where do you focus your, you know, your engineering team? And for us, that's made you very choiceful, but also meant that there's a lot you can't get done. So as an example, when we launched buyer and seller communication, which has been transformative to our business business. That really meant that that was all we could focus on for a good quarter of our time. And that means that other important projects don't get addressed in the way that we want. And so it's just the idea of having more resources and a larger team so that we can walk into GUN more readily at the same time and go after multiple opportunities, including new ones that are afforded by this alliance is really exciting for us and power. So I'm excited for that.
- [62:16]
Dennis Scully
Yeah, well, I'm glad. And did John Paul offer you a little London apartment as part of the deal? I mean, was that part. I'm hoping that was part of the package for you.
- [62:26]
Anna Brockway
A little Mayfair when we were negotiating, Dennis, we should have asked for that.
- [62:31]
Dennis Scully
The Wall Street Journal is telling me that Americans are buying up London properties right, left and center. I'm hoping that. I was hoping that was part of your new life.
- [62:41]
Anna Brockway
We do have London in.
- [62:42]
Dennis Scully
I will say that well and listen again, remarkable that this company was launched 35 products, most of them yours on the original site. The two of you scheming this business and coming up with this and over the last 12 years are now selling it for $85 million. So I mean, pretty impressive, pretty remarkable. Let's hope for great things from Cherish in the future. But I'm sure you've got to be feeling pretty good about all you've done so far.
- [63:13]
Anna Brockway
That's nice of you to say, Dennis. Thank you.
- [63:14]
Dennis Scully
Yeah, it's been, I mean, and as we've described in a pretty, pretty challenging 12 year period, let's just say it.
- [63:21]
Anna Brockway
Hasn'T been boring ever, to be sure.
- [63:25]
Dennis Scully
But congratulations to you both and I really appreciate you making the time to tell me all about it.
- [63:30]
Anna Brockway
Thanks, Dennis.
- [63:30]
Greg Brockway
Thank you.
- [63:30]
Anna Brockway
Dennis means a lot to us. Thank you so much.
- [63:37]
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?
- [63:45]
Fred Nikolaus
Business of Homes Coming and Goings column caught my eyes this week. Dennis. Every week, or every month rather, I should say, we publish a roundup of all the big moves in the industry. And this week there was an interesting move, which was that this company called Standout for Good welcomed Jason Edelman as the chief operating officer of its home division. This is interesting to me just because Standout for Good was last at least on the Thursday show because they had acquired Lawson Fenning and somewhat of A surprise deal stand out for good is that, you know, the parent company of this faith or mission based, you know, apparel retailer called Altered State, among another, a few other, you know, sub brands of that. And they're definitely making a big play for home. It's like they've hired like, I don't know, five or six people out of Restoration Hardware recently. Jason Edelman used to be at rh. I used to be at Williams Sonoma. So like stand out for good is like clearly making a push for home. And I'm really interested to see what it's going to look like because right now, you know, it's like they have some Altered state home stuff. They bought Lawson Fenning, I don't know, are they going to come up with a new brand? Are they going to open a ton of stores? It just feels really unexpected and interesting to me and I'm hopeful that someday we can get them on the show. Maybe, maybe not. Maybe not immediately, but pretty soon we can get them on the show to talk about it because it's interesting to me. Did you see that one too?
- [65:04]
Dennis Scully
Dennis I did and I was so eager to talk with you about it, funny enough. And I am eager to learn more. But they are clearly making moves at standout for good, so we'll hopefully get them on the show at some point.
- [65:17]
Fred Nikolaus
Anyway. What caught your eye this week?
- [65:18]
Dennis Scully
Dennis A couple things caught my eye. First, I was delighted and surprised to receive receive a text from friend of the show John Edelman, who clearly had been listening to the Thursday show and our conversation about who's going to start accepting crypto in the home industry. And he said lookie here, Too Modern has made an announcement. So Too Modern is a an online modern furniture and lighting and home company and they have announced sure enough that they will be accepted accepting US dollar stablecoins as a means of payment on their site. So so we have our answer to to who's going to be taking crypto. And I was delighted to see that. I wonder if many others will follow.
- [66:04]
Fred Nikolaus
But Rabbit is just behind him.
- [66:06]
Dennis Scully
I'm sure anything saw that and he says wait, hold my beer. No doubt the other piece of news that I was so excited to see because I know they've been waiting for a home in New York, the Kips Bay Show House. At long last, Fred will be coming to New York this fall in in quite a sizable townhouse down at 20 West 12th street and it's, it's currently on the market for 16.5 mil and, and that looks like a steal for the eight bed, nine bathroom, 90, 300 square foot space. But Kips Bay has a home in New York and it will be coming soon.
- [66:48]
Fred Nikolaus
Yeah, sadly, sadly not the bubble house on 71st street, but sadly not Fred's choice. But this is such a relief because I know they were really, you know, they were sweating trying to find a house and it's the 50th anniversary. It's a big deal. You know, there were like these, you know, on social media, they were posting, please, like help us get something. And they, they got something. Now the next thing, thing I'm curious about is, you know, is the Upper east side crowd going to complain about having to go down to 12th Street? And, you know, I don't think Kips Bay has ever been below, I don't know, 3450th street, let alone below 14th Street. But I think it's going to be awesome. I welcome Kips Bay to, you know, the cool downtown world that I inhabit. And I'm really excited for this.
- [67:27]
Dennis Scully
Well, I will definitely have to lead my mother down to Westwell street because she's not hire an armed guard. But I'm very excited for them and I'm sure it's going to be a fantastic house. I really can't wait. That's always such an exciting time when it arrives. And last year, the business of home team all went together as a field trip. So I hope we get to do that again. I look forward to 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@podcastusinessofhome.com this episode was produced by Fred Nicholaus and Caroline Burke and edited by Michael Castaneda. I'm Dennis Scully. Have a great weekend and we'll be back with you on Monday.