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Business of Home Podcast
The Thursday Show: Is home the new fashion? Plus: Matouk's CEO on how tariffs are impacting his US factory
00:59:20
Host Dennis Scully and BOH executive editor Fred Nicolaus discuss the biggest news in the design world. Later, Matouk CEO George Matouk joins the show to talk about the impact tariffs are having on his U.S. manufacturing facility.
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- [00:08]
A
This is Business of home. I'm Dennis Scully and welcome to the Thursday Show. Later on, I'll be speaking to the CEO of Mattook about the impact of tariffs on his U.S. manufacturing business. But first, we're going to catch up on the news, including fall trends from Pinterest, stolen images on Wayfair, and a look at whether home is the new fashion. To do all that, I'm joined by Business of Homes executive editor Fred Nicklaus. Hi, Fred.
- [00:36]
B
Hi, Dennis. How's it going?
- [00:38]
A
Great. How you doing?
- [00:39]
B
Oh, I'm doing good. You know, Labor Day has passed. I'm packing up all my white jeans, my ivory boucle pants that I have. It's another summer in the books.
- [00:50]
A
Does it make you sad when summer ends? Does that hit you hard, Fred?
- [00:54]
B
It did until I became a parent of young children and then it became my favorite. Then it was all exactly. The parents out there know what I'm talking about. How you doing? I know that the lovely Mrs. Cully had a bit of a medical procedure and is now recovering. You're playing a nurse very capably, no doubt.
- [01:11]
A
Yes, indeed I am. Upstairs, downstairs, short order. Cook, whatever it takes, Fred.
- [01:17]
B
But he does it all.
- [01:19]
A
I was relieved we didn't have a show last week so I could take a little time to take care of the patient. It was just as well, but she's coming along very well and I appreciate all of the people who have reached out and sent nice notes and, and some lovely gifts. So I appreciate that very much.
- [01:34]
B
Well, best wishes to the lovely Mrs. Scully. As you mentioned, we didn't have a show on Monday, so there's nothing to look back on. Only Monday's episode to look forward to. But it's going to be a great one. A recurring guest who's going to explain everything that's going on in furniture. I won't say who it is, but stay tuned. It's going to be a good one.
- [01:50]
A
Absolutely. Looking forward to that. Always, always good when that guest joins us on the show.
- [01:56]
B
Very subtle indeed.
- [01:58]
A
Stay tuned for that. In the meantime, we'll take a quick break and we'll get into the foreign. This podcast is sponsored by Serena and Lily. Serena and Lily's trade program offers designers exclusive access to their high quality collections, including customers own material, custom size upholstery and a dedicated support team for seamless end to end collaboration. Other trade member benefits include best pricing, fast complementary swatches, competitive lead times and extended returns throughout the year. Serena and Lily's trade members receive additional discounts and free white glove delivery offers on their Benchmade furniture and decor. Visit serenaandlilly.com the Thursday show to become a member today. This podcast is sponsored by Hartman and Forbes, a founder led house nearing three decades of creating hand woven natural window coverings for the world's most discerning designers. Each bespoke shade is woven to size using carefully selected natural fibers, bringing the exquisite beauty of nature indoors. Their collection also spans textured wall coverings and heritage Belgian linens, all crafted to transform interiors into spaces of Sanctuary. Visit hartmanforbes.com to learn more and locate your nearest luxury showroom. And we're back. Believe it or not, Fred, we've got more tariff news.
- [03:37]
B
Imagine that. Last week a federal appeals court ruled that most of the president's sweeping tariffs are in fact illegal, setting up an epic Supreme Court case that will determine the fate of Trump's trade policy. Another twist just when we need one.
- [03:54]
A
Well, indeed. And people are getting all kinds of excited about what might happen here, Fred, but we should talk about what's, what's really going on. Yes, let's try.
- [04:03]
B
So a lot of the president's tariff policies are enacted under something called ipa. Were you familiar with ieepa, Dennis?
- [04:11]
A
Constantly referring to IEPA in my previous life, Fred. Absolutely, exactly.
- [04:16]
B
But it's sort of an emergency power that was claimed by the president to allow him to enact these tariffs on countries. But it's a little bit of an unorthodox use of that power. And so there's been all kinds of lawsuits against these tariffs and they've gone worked their way up through the court system. And the most recent ruling is a federal circuit. So the U.S. court of Appeals, a very high level court, has ruled that the president's usage of IIPA is not legal. However, they've paused this ruling until October. So essentially what that means is the tariffs are still on. All the money that is being collected at the border is still being collected. But now the case is going to go to the Supreme Court, who is almost certainly going to rule on this over the next month and determine once and for all, hypothetically whether these tariffs are in fact legal or not. What have you heard about this latest twist in the tariff story? Dennis?
- [05:06]
A
Well, as I say, people got pretty excited for a hot minute until they read a little bit further and said that, yes, it's likely to go to the Supreme Court. And so far, the Supreme Court has ruled an awful lot in the executive branch's favor from what we've seen. So I don't know if people were getting too hopeful about that. Your sense?
- [05:27]
B
Certainly many legal scholars have said that these tariffs are unorthodox and possibly illegal. So it's possible that the Supreme Court will nullify them. But I don't know anyone who is betting the tariffs will get undone in October. That does not seem to be a bet that anyone I speak to is making right now.
- [05:43]
A
Well, it's interesting because in addition to the tariffs being undone is this whole issue of perhaps the tariffs being reimbursed and all sorts of speculation about not only would they be reimbursed, but apparently there's a possibility that they would need to be reimbursed with interest. It's been interesting to for all of the skepticism one way or the other, what has been interesting is to see the bond market somewhat respond to all of this. You could see the yield on the 30 year bond rise with a little bit of nervousness about what's going to happen with all this money. So I mean that was the first sign that we really saw in any meaningful way of all of this making financial markets which heretofore have been rallying to new highs and all this speculation of things are in great shape. So you did see a little bit of nervousness after this ruling came out.
- [06:40]
B
As you watch the bond markets, I watch Instagram, I don't know if you know that familiar with that platform, but I really have seen an uptick in commentary about the tariffs from interior designers recently. Just today I think San Francisco interior designer Tinika Triggs posted this letter, sort of an open letter to President Trump, talking about how the tariffs had cost her, I think 30% of her revenue is what she said. And it feels like everyday that goes by the effect of these tariffs is a little more real showing up a little bit more in people's day to day lives. If they get undone, then that's another twist and turn. But I think for the time being it's a little bit as you were and keep watching the news.
- [07:15]
A
But in the meantime, there's another component in all of this, the de minimis exemption, which we should talk about as well. Fred?
- [07:24]
B
Yes, this is my favorite exemption, the de minimis exemption. You just sound so sophisticated when you say the de minimis exemption. What the de minimis exemption is is wrinkle in U.S. trade law that allows packages under $800 in value to come into the country free of tariffs. And recently as in last week, it was officially ended. And so now every package coming to the U.S. whether it's $8 or $8,000, is now subject to tariffs. And the elimination of this exemption has caused all kinds of chaos. I think something like two dozen countries have suspended shipments to the US or certain kinds of shipments to the US because part of the problem is just that there's so many packages that come in under 800 do with last year's 1.4 billion packages entered the US under the diminutive exemption. And so it's not even so much collecting the money or not collecting the money, it's the logistics of dealing with it has created a lot of chaos at the post office.
- [08:19]
A
It's interesting because just before we came on air I actually received an email from the Royal Mail in Britain saying that a package was on its way to me. I ordered some small items from an artist, illustrator, designer Polly Fern in Britain whose work quite crazy about. And there were a few gift items that heretofore would just have come into the United States without any kind of tax on them whatsoever. But now they will at some point be halted and they'll be either inspected or the contents will be defined and there'll be some sort of tariff applied to them. We'll find out how it all goes, but it will certainly slow the process down and add additional costs. And there were, as you say, 1.4 billion packages coming into the US that before all of this we're able to just go through without any additional fees or a slowdown in the process. So I think it's going to have a huge impact the likes of which we can't even possibly measure yet because we're going to have to see.
- [09:28]
B
Yeah, and I mean I think much of the conversation around the de minimis exemption is around fashion because so much of these businesses like Shein and Temu have been basically they've been built on the backs of the de minimis exemption. It's Chinese factories or factories in Asia that sell directly to U.S. consumers. And they're able to ship their goods tariff free because they're under $800. And so there's a whole ecosystem. We talked about Amazon hall and its famous $20 sofa that's based around the de minimis exemption. And so mostly this is impacting fashion companies and companies that sell small goods. Home products are usually more expensive, they're bulkier. And you know, we're already subject not as many home products snuck under the de minimis exemption. But that's not to say all. Certainly a lot of them do. I think it's going to have lots of knock on effects in terms of the speed of delivery. And logistics will experience a snarl because of this. And I certainly know some interior designers have experienced this in their lives as well. So I suspect this will get worked out over time. And what it'll just mean is higher costs. But in the meantime, it's creating just logistical challenges that are slowing down the system. So if you've got any prints coming over from England, like Dennis here, you know, don't count on them arriving overnight.
- [10:41]
A
Don't even get me started on all my Hogan sneakers coming over from Italy, Fred. Which now, unfortunately, you know, I'm gonna have to hold off.
- [10:48]
B
Are they sponsoring the podcast? They gotta get on.
- [10:51]
A
They need to be. Yeah, I wanna read that copy. I look forward to that. Coming. Moving on, we're gonna talk about Pinterest. Labor Day has come and gone as we just mentioned, which means it's time for fall trends. Pinterest just released its report on what users are searching for this season. Turns out they're looking for cubicle's chic statement tile and, wait for it, Art deco decor. Yes. Who knew. Who knew that Gen Z would be interested in all of this?
- [11:20]
B
Fred? Yeah, this is interesting. I mean, before we get into it, why not take a little detour? Do you believe in fall trend reports? Is this something you ascribe to? I find myself always so skeptical of these things, but I worry that I'm too much of a cynic. What do you think?
- [11:34]
A
I believe in almost no trend report whatsoever. So that's where I come down.
- [11:39]
B
Well, I'll say this. Trend reports are often an excuse for a company, whatever it is, to drum up a little bit of publicity they send out. Oh, this is trending. And then gullible magazines such as ourselves publish articles about it. But I think, at least in Pinterest's case, they are reporting what users are actually searching for. And as you pointed out, it's sort of interesting. One other thing that came out of this study is that Gen Z now accounts for more than 50% of Pinterest users, which is. That's interesting. At the very least, we can take this as a little bit of a bellwether as to what the youth is interested in these days. I guess just to sort of break it down, this idea of cubicle chic trending up 1,000%, work office makeovers up 2,600%. It was interesting to me. I was kind of curious, why now? Why is Return to Office Stuff trending now? It seems like that moment has already happened.
- [12:31]
A
We're not back in the office, Fred, so it's Hard for us to have a good read on this. But I think that there is is this big uptick in people returning to the office, and I think for many, it's a huge adjustment. You fixed up your home, you fixed up your zoom background at home, and now you have to figure out how to create that same look and feel in your cubicle. I think that that's part of what's been going on for people. There's also this trend, and so many office design firms have talked about this, still needing to do more to lure people back five days a week by creating a fun and making it playful and warm. So this whole issue around cubicle chic has everything to do with helping people to want to show up consistently.
- [13:20]
B
Maybe a neon word on the wall will get the young people back in. It's funny, actually. And an editor here was talking about how they were talking to somebody at Steelcase or something and how young people who were kind of coming into the office. Imagine if you got hired as a 21 year old in 2020, you never went into the office, and then four years later, you're coming in for the first time in your professional life. And she was saying that this office design company was saying that these people were like, really excited by cubicles. They're like, oh, it's a mini little house you get to design. The bane of the office is becoming this cool little chic design moment. So maybe that's why it's popping on Pinterest. The other thing that jumped out at me from these findings is just that vintage stuff seems to be really, really popping. And I guess vintage is, is kind of always cool, but it is, you know, vintage tiles, vintage style, everything was up like 1000%. What'd you make of that?
- [14:12]
A
Yeah, I thought this was really interesting. And we've talked in the past about how behind the home industry in general feels to the fashion industry when it comes to vintage and resale. And we've seen the popularity of Facebook Marketplace explode and some of the other sites. But the home industry feels hugely behind the curve. So I'm not surprised to see a generation that is so used to buying things secondhand, so used to thrifting, wanting this in the home as well. And I love being a huge art deco fan. I love that they picked that particular period. But I think great that that's what they're jumping into.
- [14:59]
B
You know, Gen Z in particular has come up in an age when they just have such easy access to the entirety of visual history. You grow up with Instagram and one era is right next to the other. It's all kind of contextless. Everything is sort of a beautiful grab bag you can pull from. I think of the words of Gary Friedman, as I often do, where he talks about how taste comes from the dead, where it's like, people die, their collections go into estate sales and they trickle down into the retail market. But I wonder whether the Internet kind of breaks that a little bit. And kids growing up today just experience the past as this one big, big mass that they kind of dip in and out of as they see fit. What do you think of that, Dennis?
- [15:41]
A
Well, I mean, I love the idea of estate sales leading to trends. And maybe there's this huge array of estate sales that are offering up art.
- [15:53]
B
Deco, but those people died a long time ago. That's the thing. That's the conclusion.
- [15:59]
A
I mean, I feel like the 1920s movie star who had apartments filled with art deco furniture. Yes. I feel like they passed on long ago. So I don't even know to our point, what is the dotted line that is leading them back to these particular styles? Again, I love it. And I in my youth fantasized about my apartment was going to be all art deco and I used to collect vintage radios and I used to have all of these beautiful art pieces. But then I got married and, you know, your spouse wants something else.
- [16:30]
B
Those vintage radios end up in the basement. Yeah, exactly.
- [16:34]
A
You gotta make compromises. I mean, again, I don't know the dotted line that's leading them back to art deco or to these wonderful vintage tiles that they're using. But I just want to caution them that those tiles on a kitchen backsplash, they might tire of pretty soon. So just go easy is all I'm saying. Moving on. Fred, we're going to talk about Wayfair because this week you wrote about the strange phenomenon of high end British design popping up on Wayfair, but not quite in the way that you might imagine. It's not really high end British design, Right?
- [17:10]
B
Yeah. This is kind of a funny one. So maybe the best way to tell it is simply chronologically, like a few months ago, there was this image that was taken from a Nikki Kehoe product, the very well known design brand podcast alumni. And it was popping up on Wayfair and a couple designers pointed out to me that it was stolen from Nikki Kehoe's site. And, and I think Wayfair, actually to their credit, sort of promptly took it down. But it got me looking at Wayfair a little bit more and I started to notice all these really beautiful, very British design images that were popping up when I was browsing Wayfair or of course you get served Instagram ads and they bring them to you. And I was talking about this with other people and they were saying, yeah, it kind of looks like World of Interiors on Wayfair right now. And so I started kind of looking at them more closely. And what I realized was that in a lot of cases, lo and behold, these are not real products, but these are. They are real products, but they're kind of somewhat shadowy, fly by night vendors just simply stealing an image, whole cloth from a British vendor like Sophie Conran. That was one of the big ones. Christopher Farr, Buchanan Studio, another podcast alum, and just putting these images up on Wayfair listings on the US site. So I kind of dived deep into that mystery and tried to figure out what exactly is going on here and.
- [18:25]
A
What is going on here. And they're showing these images and are they selling a completely different product?
- [18:33]
B
I don't know what's going on here, Dennis. So, I mean, no, in all sincerity, like, I talked about this with a lot of people and none of them had like a totally satisfying explanation for what exactly is going on. As best as I could tell, I think this is just as simple as British design is popular in the US Right now. These companies take these images, it's easy to put them up. It's hard, you know, the companies don't always notice them. Getting them taken down is an administrative hurdle and it lures people in to their little world and they click around and maybe buy something else. As far as I can tell, it didn't seem like many people were actually buying these products because they had very few reviews, if any. So this is just a little bit of a puzzler. I'm hoping a listener can call in now, explain to us what exactly is going on here because, you know, intellectual property theft in E commerce is not new. We've talked about it before, but usually it's like you'll take someone's image, you'll Photoshop your own product into it. This just copying the photograph, putting it up on Wayfair and hoping someone clicks to buy.
- [19:33]
A
Well, and in some cases, as you, as you pointed out in the article, I mean, with, with the case of Sophie Conram, for example, an image from her own living room. Yes. Wasn't even like it was some remote locale. It was she has her own furniture collection and she was showing it in her own home and then suddenly she was getting Contacted by people who were saying, oh, I found your product for so much less online, which is part of the complexity of all of this, is that suddenly these products appear to be available for far less money. And then you have to explain, well, no, that's not our product at all. And we have no relation. We don't even know what that is. And yes, it is the Wild west out there.
- [20:16]
B
Yeah. And it's even more complicated because in some cases there are manufacturers who list multiple products across different sites under different names and. And it's different prices on Cathy Kuo's side and different prices on Wayfair and blah, blah, blah. And that complexity is what, dupe.com, i'm going to bring back that name, that horrible name. That's your editorializing. But that's the complexity that they're exploiting, is that people feel like they distrust furniture pricing. They think they can always get it cheaper. So they see a price, they're like, oh, that must be legitimate. It's on Wayfair. And then nobody's happy. So, yeah, it is kind of the Wild West. And one of the things I just kind of wanted to get into with this article and this conversation is that, that it's a little, frankly, unfair. Because if you look at my Instagram ads were full of all these beautiful images and they led me to Wayfair.com and of course, Wayfair can say rightfully, like, hey, this is the vendors. We're not doing this. But at the end of the day, Wayfair does benefit from having this beautiful stolen imagery on its site. I don't know, it's a real pickle.
- [21:14]
A
Well, so when you say it's not fair, not fair to Wayfair, or not fair, who's it not fair to?
- [21:20]
B
It's not fair to the people whose images are being stolen. Because I feel like what ends up happening is that, that Wayfair has this kind of get out of jail free card by saying, look, we don't have legal responsibility for this. This is the vendors, our performance marketing. What shows up on Instagram is automated, but at the end of the day, they do benefit from having these beautiful images associated with them. So the platforms, not just wayfair, but Amazon, eBay, Home Depot, everything, all of them should take a little bit more responsibility for trying to ferret out stolen images. Is applying AI, using all this wonderful technology they're spending millions on and try and spend it on solving this problem, because it is kind of a problem, you know?
- [21:58]
A
Well, and as we've talked about on the show before and we're certainly going to talk about again because image sharing just became such a part of the culture, it's hard to rein it back in. And we didn't create perhaps enough structure and enough rules around all of it from the very beginning. And once we moved on from taking pictures of our lunch to actually posting pictures of other people's work, we didn't rein it in soon enough, sadly. So we are going to definitely be talking about this more in the future. In the meantime, we've got to move on because we've got a hot take from Martina Montadori of Cabana Fred Only.
- [22:39]
B
Hot takes on the Thursday show in business of fashion. Last week Martina wrote an essay titled Is Home the New Fashion? That's about whether home is the new fashion. Martina writes, not so long ago a fashionable person's status in society was mainly measured by the clothes that hung in their wardrobes. But today the wardrobes themselves, whether custom or a vintage find from a flea market, can make as much of a social statement as the clothes they contain. Do they? Dennis? Does that wardrobe make as much of a statement as the clothes they contain? What do you think of this whole issue?
- [23:12]
A
Well, so let's get into what this whole article seems to really be about because we were talking earlier about the home industry often being a little bit behind the fashion industry. And certainly I would say in the case of one's ability to identify brands or in the same way in the home as we do in fashion, I think we're quite a ways away from that, wouldn't you say? Oh my gosh, is that a B and B Italia sofa that you're sitting on? Right. I mean, yeah.
- [23:47]
B
I mean there's a couple different dimensions to this. I would totally agree with that. And I think to some degree like in the world that Martina Montadori exists in, which is this beautiful magazine Cabana, very high end home products. I would imagine there is more name recognition and more visual recognition around home products and probably there is a shifting sense of momentum that is very real that home brands have a little bit more cache and recognition than they used to, certainly before COVID But yeah, if you do the experiment that I often like to do, which is ask a random person in your life to name fashion brands until they run out, then ask them to name home brands until they run out. One list will be a lot longer than the other. I think there's a good reason for that. I I think home during COVID and for reasons we talk about all the time has come a long way and there is more, but I think we're just still very, very far from the point where everyone can just immediately identify a B&B italiasofa or such and such product. So I think we're kind of on our way there, but I don't think it's so far along that we've reached a problem with it yet. Martina kind of leaves it open ended at the end of her essay.
- [24:56]
A
Yeah. And I think she leaves it open ended and she really questions whether we want to be on that track, whether we want home to become like fashion. I mean, interestingly enough, I think that having looked at a lot of studies in the past where people seem to have far greater ease in putting an outfit together than they do in putting a room together, I think we're quite a ways away from just the same sort of comfort level that we have with fashion in home. And I hope that pieces in the home have a different kind of significance and a different kind of feeling to them than perhaps your fashion wardrobe. But I don't know. Says someone who's actually quite emotionally attached to his fashion wardrobe. So I don't know. Sort of talking out of both sides of my mouth there, Fred. I'm not sure where I'm coming down.
- [25:51]
B
Well, I'm good at neither of those things. I can neither pull an outfit together nor a room. I actually think, like, honestly, I feel like home could even be a little bit more like fashion. I feel like brands need to make products that are instantly recognizable and need to get people really excited about them. And I am a little bit more foot on the gas pedal when it comes to stuff like that. So I maybe take the other side of this here, although I'm definitely not a fan of the luxury logos on upholstery. But I think that coming up with a signature look for a home product is a real challenge and very, very few people have been able to pull it off. And I think that making home cool to me is an admirable goal.
- [26:34]
A
This made me think of a post that I saw from our friend Dan Rosen recently. There was an Eames chair, an ottoman, and then above it was a Noguchi paper Japanese lantern. And Dan Rosen said, I don't know where they got the idea for this. This is so innovative. I've never seen this before. And I think that that my fear to your point is that some of these pieces become so recognizable that they become a turnoff for people because we feel that we've seen them again and again and particularly as we've talked about recently with Instagram, making us feel that we're being served up these same images, these same looks over and over again. And often that's the knock about our friends at RH as well, that they're serving up this same kind of look and feel again and again. So it's, I don't know, it's a double edged sword. And the recognizability is great, but also, is that what you want?
- [27:35]
B
I'll say this, I thought that was hilarious. I would imagine most Americans would look at that Instagram story and be like, what is he talking about? Like, what's that chair? You know, what's that lamp? I think it's a cliche within a very like rarefied world. And I think we happen to be in that world and so we noticed that. But I think if you pulled people off the street, almost no one would understand what Dan was talking about, as funny as it was. I agree there is a danger, but I think we're just a long way to go. But the fact that we've got Eames, R.H. and Dan Rosen into the same item I think is a win. We're doing well on the Thursday show here.
- [28:09]
A
Exactly. We've done our job on the Thursday show. 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 industry hires and leadership advice from design business coach Gail Doe. Adobe we'll be back in a minute, but first a quick break. Hartman and Forbes takes a boutique approach to crafting hand woven natural window coverings offering a level of customization and artistry rarely found in today's market. From adjusting color and thread composition to widening a warp edge or matching a room detail, weave design can be tailored to tailored to your vision. The result is a one of a kind hand woven creation supported by exceptional personalized service. Discover what's possible and register for your trade account at hartmanforbes.com at Serena and Lilly their frame's your fabric. Members of Serena and Lily's trade program enjoy bespoke sizing and service perfectly tailored to any project. Use any one of their 17 design shops as an extension of your workspace or collaborate remotely with their dedicated support team for high touch service and endless inspiration. Join Serena and Lily's trade program for exclusive pricing, complimentary swatches, competitive lead times and extended returns@serenaandlily.com the thursdayshow and we're back. I'm joined now by George Mattook, the CEO of his family business, Mattook, the luxury bed and bath linen company. George, great to have you.
- [30:01]
C
It's great to be here. Thanks, Dennis.
- [30:03]
A
Thanks so much for making the time. I'm eager to jump in and discuss the op ed piece that you wrote for the Wall Street Journal about tariffs. But before we get into all of that, I want to to tell people a little bit about Mattook, your. Your family business that's been around since 1929, if I recall.
- [30:23]
C
That's correct. My grandfather started the company in 1929. He was an immigrant from Damascus, Syria, and learned about the textile business on his way to the United States via Italy. And he started the company when he got here. And I joined the company in 1997 after finishing an MBA at Columbia University. And I'm the CEO and my wife Mindy is the creative director, and she does all the incredible stuff and I do all the boring things you can do in Microsoft Excel.
- [30:54]
A
Got it. Okay. Well, I understand Excel is going to get a lot easier thanks to AI, so I hope that that's going to make your job easier soon.
- [31:00]
C
Oh, wow.
- [31:01]
B
Yeah. Okay.
- [31:02]
C
Four day work week for me coming up.
- [31:04]
A
Good. I wish that for you, George. So tell me about the business. Give us an idea of the scale of your business, who you selling to, and what your product offerings are.
- [31:17]
C
Okay. So as you know, we're manufacturer and importer of luxury bed and bath linens. We have a factory in Fall River, Massachusetts, where I am today. We employ 300 people here. And our customers, like a lot of home furnishings people, are in multiple channels. We sell directly through mattook.com we have a flagship retail store in Manhattan we call the House of Mattook. And we also sell to independent retailers around the country. We sell directly to interior designers, national accounts, primarily Bloomingdale's and then a series of luxury hotels.
- [32:01]
A
As you and I have talked about in the past, a lot of this kind of manufacturing, this business, the American textile industry largely went overseas. At various times in American history, you made a conscious decision to try and make fall rivers work for you. Tell me a little bit about that.
- [32:24]
C
So, as you mentioned, the textile industry has been dismantling itself in the United States for decades. And we are not creating fabric. We're not a mill. So we're an assembly operation. And the fabrics that we depend on are produced overseas, primarily in Italy, Portugal, and India. We bring them here to cut and sew. And what we found early on was that we could run the manufacturing operation here profitably and with a certain competitive advantage as we gained access to the world's greatest materials that we produce with our partners overseas. And bed linens require a lot of fabric and maybe less labor than traditional textile categories such as apparel do. So that calculation enabled us to be competitive with overseas manufacturing in the luxury space. And further, we're able to use that manufacturing to create all kinds of customization capabilities, which we're known for and can deliver in a more meaningful way than our competitors, who have to ask other people to make their products for them. So all of that put together has made for, you know, a great growth story for Mattuc. In the late 1990s, we had 30 people in our manufacturing plant here. Now, as I mentioned before, we have over 200. It's much more sophisticated. It's a more modern and enlightened facility. We pay living wages and have great benefits. And so, yeah, we're really proud to have been able to build this thing over time and use it to the benefit of our customers.
- [34:10]
A
And coming into this year, how has business been for you for the past few years? I get the sense it's been pretty good.
- [34:17]
C
Overall, it's been good. As with most home furnishings companies, we exploded in demand during the beginning of the pandemic, 2021 into 2022, and then the business slowed down quite a bit as people started spending money on other things. There was a big inventory adjustment, but thankfully, we were able to hold onto our gains from that period. And then in 2024 and now into 2025, as we kind of rebuilt our strategies and resources for the next stage of growth, we've resumed growth again, and I would call it very comfortable 10 to 12% type of revenue growth. Nothing astronomical, but definitely robust enough to keep everybody busy.
- [35:02]
A
And then April of this year came this Liberation Day announcement from the president about various tariffs on different countries. And I'm wondering how you experienced that and what started to happen in your world.
- [35:19]
C
Well, I never, never imagined there would be punitive tariffs on doing business in countries that were considered our allies at the time. And that was a misjudgment myself of what was the strategy of the Trump administration. So I have to take responsibility for that. I thought we were talking about punitive tariffs in China, other hostile countries. I just never imagined in. In places like the EU or the Philippines, India, countries where we'd been building positive relationships or trade areas like that for decades, that we would be kind of going to war industrially with them. And so that was a big shock when that happened, when everything was postponed for 90 days and we went to a 10% universal tariff rate. It was something that we, we were able to absorb. I mean, it was costing us tons of money, but it was something we felt like we could absorb and not disturb the marketplace until we knew what would happen long term. And that's where our second miscalculation came in. Because we assumed that in August the worst thing that would happen would be that those 10% reciprocal tariffs would stay in place. We did not imagine things getting this much worse. And so we've been going through another period of restrategizing from a pricing point of view to respond to this because the financial penalties are too great now for us to continue to absorb.
- [36:53]
A
Right. So I mean, specifically the outsized tariffs against India, which are about 50% if I understand correctly.
- [37:03]
C
Yes, yeah, that's correct. So India is the most intense area of concern for us because there was a 25% additional reciprocal tariff and then another 25% penalty tariff on top of that, making for a 50% additional tariff on top of tariffs that we were already paying according to the H TS code of around like 8 to 10% on everything we're doing there and what we'd buy in India's fabric for a manufacturing facility here. So it's really punishing to us to have to pay tariffs like that on material that we're buying to create jobs here in our factory. And then further, we have a large supply system in India for our hotel bed linens and that's a very price competitive market. And the tariffs are causing us a lot of concern for that as well.
- [37:58]
A
And as far as how the tariffs actually show up for you, there seems to be some confusion out there about who is paying the tariffs or when the tariffs actually occur. Help me understand, when a container or shipment, you tell me how it comes into the country for you when it arrives. Is that when you're having to come up with the money for whatever the tariffs are at the moment?
- [38:24]
C
Yeah, that's correct. It's pretty straightforward. A shipment arrives at a port of entry, let's say the port of New York. If it's a boat shipment, our customs broker receives that shipment files of paperwork with the government saying what's the value of what we're bringing in and what are the various tariff codes that are associated to those products? And then we have to pay the government in, I don't know, 10 or 15 days, the tariffs on those products fully paid by the importer at the time of entry into the United States. So 100% borne by us and so.
- [38:58]
A
None of the companies that you're working with that are suppliers to you, have any of them come to you and said, oh, listen, we understand there are these tariffs. We'll meet you halfway or we'll adjust prices for you. Has that happened?
- [39:14]
C
We have amazing suppliers that have worked with us, and certainly some have offered a certain amount of collaboration here. But we're not talking about halfway. We're talking about 2% or 3%, maybe at the most 5%, nowhere near what the penalty is that we're paying to the government. And this is a big misperception that was put forward by the Trump administration. It's like, because in the textile industry, which is intensely competitive because textiles are made in every country in the world, they all want to sell in the United States. So producers in industry like this operate at extremely low margins. There is no ability for suppliers to absorb these tariffs in any significant way.
- [40:03]
A
And at 50%, the tariffs in India, for example, I mean, unsustainable, I'm assuming. I'm imagining you can move things around, adjust margins or what have you to your point for a little while, but you can't do that for very long.
- [40:19]
C
Yeah, that's right. And we will find a way to survive. You know, the company survived the Great Depression and the financial crisis and Covid and all of this other stuff. But, but you. We have to change the price of our products in order to incorporate this humongous additional tax that's been put on us by the government. And that has different levels of impact in different ways. And some people might say, like, oh, yeah, you know, you're matuk and you sell a luxury product, your customers can afford a pricing increase. And for the most part, that might be true. But there are other parts of our business, particularly the commercial business, hotel and other commercial customers, that are extremely price competitive.
- [41:03]
A
Right.
- [41:04]
C
And, and it is not easy to pass on price increases in business relationships that we've in some cases spent years building. So it, so it's, so it's challenging for us to increase prices according to the channel that we're operating in.
- [41:23]
A
The notion that the tariffs are in part designed to bring more manufacturing and more of the supply chain back to the U.S. is it your feeling that there are products in the US that you could be sourcing that are, are in any way comparable to the Italian linens, the Indian materials? I mean, what's your sense of that?
- [41:50]
C
I think that idea is untenable. We are only buying things and producing things in different parts of the world because they're impossible to produce here, otherwise we'd be making them here. And so it makes sense for us to partner with. With experts around the world to make great products that consumers want to buy. And the more successful we are in that way, the more it benefits our US Employees as we can use those profits to grow the brand, to make investments in our plant. We're planning to put a huge solar system into place next year that would make our entire operation net zero from an electric point of view. Next year. I mean, these are things that require capital, and our successful imported products help to subsidize that. Not to mention we're 100% dependent on imported fabric for a manufacturing operation, because there are no mills in the United States that make the kind of fabrics that we need, and there never will be because there are no customers other than Mattook here.
- [43:06]
A
Basically, you're the only one that wants it.
- [43:09]
C
Yeah, yeah, yeah. So we're not going to ask. We don't expect fabric mills to appear out of thin air to supply us. It's ridiculous. And to be honest with you, Dennis, and this is something people don't talk about, is that the world doesn't need additional factories in any industry that it doesn't need need. All that does is increase capacity, which reduces profits and puts companies out of business. So I find the whole idea of this crazy. And then there's the other side of it, which is that any manufacturer, and there still are many in the United States, knows that it's virtually. It's very difficult to find people to work in our factories. There is a labor shortage already. So the idea that we should be building new factories that the world doesn't need and that nobody wants to work in makes no sense at all.
- [44:01]
A
Well, and I'm glad you mentioned that, because I was going to ask you. There's this perception that the labor market has shifted somewhat and that it's easier to find labor or that labor doesn't feel like it has quite the upper hand, perhaps that it had during the. During COVID What's your sense of that?
- [44:21]
C
My feeling is that that is true in the overall labor market, that conditions have shifted a little bit. There are more people looking for work now than probably anytime in the last few years. But that does not alleviate the challenge of finding people who are looking for work and are willing to work in an industrial environment. It's a small subset of. Of available labor that's willing to do that or have the skills to do that. So the challenges that all of the manufacturers face, and it continues now is finding people that have the right skills and have the will to work in an industrial environment. It's just challenging in 21st century America.
- [45:06]
A
And do you think that we've made a mistake in this country? We've talked a little bit about this issue on the show. With regards to the upholstery business, for example, or some of the business. The president recently seems to have shifted his attention to North Carolina and the furniture makers there somewhat less so South Carolina, he said. But definitely North Carolina is very focused on.
- [45:32]
C
Go figure.
- [45:34]
A
But again, this idea of, of have we done a good enough job of making an upholstery or a furniture making job, or to your point, the people that would come and work for you in Fall river seem like a desirable enough job?
- [45:51]
C
Well, I think that that's a legitimate point to consider, which is that you can't run a sweatshop and then complain that people don't want to work there. So manufacturers like Mattiuk, I think, have an obligation to create enlightenment, desirable and productive and efficient, but also humanistic workplaces that people want to work. So if you came to Mattuc, I think you would find that it's different than Mattuc looked like 20 years ago, and it's different than most factories look like now. But that's only part of the challenge. The other challenge is really, okay, well, once you have all of that, who wants to work in your factory? And are there enough people in your community to do that? And factories from the beginning of time have been meccas for employment for first generation immigrants. And we're welcoming fewer first generation immigrants into this country at the same time. And that compounds our labor problems as well.
- [46:55]
A
I'm wondering, George. So the Wall Street Journal op ed piece comes out. How tariffs hurt my American, American factory. You and I spoke before we came on the air. Lots of support in the comments section of the Wall Street Journal. Perhaps feels a little bit unusual for you to experience that. I'm wondering, though, if some of your peers, some of your colleagues in the industry have seen this, have reacted to this, if you've had communications recently with them and what you feel the community is saying about all of this.
- [47:29]
C
Well, first I should say that the Wall Street Journal is an amazing publication. And even though Mindy and I laugh about the fact that we're in agreement with the Wall Street Journal's editorial page much more now than we ever would have imagined, it is a fact that they have been very supportive of free trade and critical of the trade war. And so I was planning to write a post on LinkedIn about the situation at just gotten to the point where I felt like I had to say something. And I wrote the post and I shared it with Mindy, and we agreed that actually there were things that I was saying that maybe a wider audience or different audience would want to read about. And so I reached out to the Journal and I submitted it, and they seemed interested and helped edit it a little bit. And, yeah, before I knew it, it was published. It was all pretty cool. And there's been a lot of support today since it was published. And. And I try not to read the comments too closely because I'm afraid of what I would find there. But my understanding is that a majority of the comments are actually supportive of what I wrote. And that's, I think, validating, but also telling that there are a lot of people who feel the way that I feel about this and are not speaking up publicly about it. And I hope that that changes.
- [48:57]
A
I agree. And like you, I have found myself surprisingly in agreement with the Wall Street Journal editorial board in recent months, much more so than I can ever recall, which I think just sort of speaks to this sort of crazy time that we're in where so much is shifting and our perception of what different political parties stood for or even what sort of American capitalism stood for and was all about. And we certainly. Your family's business started in 1929. My family's business started in 1934. Smoot Hawley was something that was sort of so burned into the psyche of our grandparents and the founders of businesses that started anytime during the Great Depression that we thought this was a conversation we'd never really have to have again.
- [49:51]
C
I know it's interesting time that we're living in, and I actually think it's healthy in a lot of ways. Ways to question your assumptions and the things that you've believed for a long time. And because there are certain things that we probably came to think of as being unquestionable that should be questioned. And a vibrant dialogue, I think, is really important. And I would love to have a vibrant dialogue with people who are making trade policy in Washington, because I think that they need to hear from people like Matuk and other great manufacturers in our industry. But they also don't seem all that willing to listen. And that's part of the challenge in trying to get your point across.
- [50:39]
A
Yeah. Well, I mean, again, I commend you for getting it into the Wall Street Journal and getting that voice out there. And I think a lot of people will hear that, not to mention, George, the vast audience of the Business of Home podcast that will now.
- [50:54]
C
I mean, of course, of course my DMs are going to be overwhelmed after this, Dennis. I don't know what I'm going to do.
- [51:01]
A
You might need to go into witness protection because you'll just be so overwhelmed by it.
- [51:05]
C
But that is possible.
- [51:06]
A
But I know that a lot of people will be reaching out and listen, I think you're absolutely right that we have to keep an open mind. And I would love to think of the benefits of American manufacturers or more opportunities being created. We've grown a little bit concerned about what actually might happen to the workforce in the coming years with where technology seems to be headed. And so I would love to think that there were manufacturing options or other kinds of work that could be created. It certainly seems that we're going to need that.
- [51:42]
C
Yeah, I think sometimes you're surprised at the outcome of, of something that that happens and people assume the jobs are all going to be gone because of AI and you just don't know it. And this is a really resilient, innovative, incredible country. And there's a spirit here that really doesn't exist anywhere else. People always talk about American optimism when you're speaking with vendors around the world, that there is something really different about, about businesses in the United States and the people who grow up in this environment and set out to have an inspiring, successful career. And I believe in that. We're going to come out of all of this in a really great situation. Having said that, there is no reason to do damage to what so many companies have built without any regard for the consequences. That kind of destruction is not created or helpful. And I think we're going down a path right now that's just getting us nowhere. And it would be great if we could all get back to being creative and innovative and solving exciting problems, rather than responding to the tariff policy of the day or the hour.
- [53:05]
A
And when you saw the headlines about the court ruling that suggested that, that the President might have overstepped his authority and that these tariffs might be illegal in some form, were you hopeful that maybe this would be undone? Could you imagine getting some of the tariffs that you've paid back? I mean, did all of that run through your head?
- [53:29]
C
Well, I'm thankful that there are people that are actually trying to fight in this way that have taken this case to the trade courts and are having success. So I want to say that that that's brave and I appreciate that. And all of the businesses who are affected by this should be thankful. Having said that, I mean, we're not counting on anything. We know that the Supreme Court has tended to defer to the executive branch in ways that would have been unpredictable or unprecedented since the second Trump administration has started since. So we don't have our fingers crossed that everything's gonna work out okay and we're gonna get all this money refunded. To be honest with you, we're really more concerned with moving forward in a meaningful and productive way. We hope that that could all be possible without any court challenges and Supreme Court rulings.
- [54:27]
A
Yeah, well, I think that's everyone's hope, so we certainly are with you there. George, I wanna thank you so much for making the time to talk about this. I'm sorry for how all of this has shown up for your business and what it's meant. But I'm sure that everybody listening is hoping that this will quickly get resolved. Thank you again.
- [54:48]
C
Thank you. It's a pleasure to be here.
- [54:55]
A
And we're back. We're getting to the end of the show here, but before we go, we'd like to take a second to highlight anything going on in the industry that might have caught our eye. Fred, what caught your eye?
- [55:04]
B
The media caught my eye. As it often does this week, two things. First of all, I noticed that Sight Unseen, a great sort of design newsletter for the cool side of the design industry is where kind of I think of it, it's been around for like 17 years. I was kind of blown away by that. But they recently announced that they're going to be sort of revising the format and it sounded a little bit like reading the announcement that it's going to be a little bit more kind of sub stacky, a little bit more like personal, direct, kind of newslettery, which I think is cool. And you know, I love what Jill and Monica put together. So I'm excited to see what they do in their next iteration. So certainly check outside on seeing what they're up to in their next next chapter. I also noticed, and this is maybe more sad news, is that Architectural Digest used to have like a sub brand called Clever, which was like kind of their youth design leading site. I don't know what was the best way to describe clever. What was it, Dennis, what was clever exactly?
- [56:01]
A
What was clever? Was it sort of for the Apartment dweller? Was it for the younger generation?
- [56:08]
B
Right.
- [56:08]
A
That's what I sort of felt it.
- [56:09]
B
Was ad for kids. But honestly, I actually really liked Clever. I thought it was very smart and sharp and they had fun articles, but AD has kind of wound it down sort of unceremoniously. I think it's actually been, you know, I guess turned off for some time at this point. But I just noticed it recently because I went looking for a clever article and they pulled it down. And now, you know, now that content, I think is published on AD.com so I don't, you know, maybe this is another investigation I can do that delves deep into the history of clever. But I, you know, I was sad to see it go. I'm sure it makes sense from, from their perspective, but I really like clever. And so rip to clever.
- [56:44]
A
It was funny because when Clevver was first launched because people said RIP to AD like everyone was so upset that they were, that they were launching something like this and they thought this is sacre bleu. How did this happen? So sort of funny to see it quietly and sadly perhaps. Fred, go away.
- [57:01]
B
Yes. Well, what caught your eye this weekend?
- [57:03]
A
Well, as you know, I'm always on the lookout for a Charles Cohen real estate deal. And, and sure enough, there is another one as again, the effort to raise cash continues. This time he's selling a second building, 3 East 54th street, reportedly for $188 million, although he doesn't own the full control of this building. But it came at a time, Fred, where there were a couple of interesting announcements regarding sort of commercial real estate in New York, one of which was that Manhattan office leasing is on track to hit the highest volume Since. Wait for it, 2019. Yes. And you and I were talking just before we came on the air wondering what are some of the big cities where return to office is actually at sort of pre Covid levels? Well, you know what the big city is? It's New York. Turns out, it turns out in July of this year, there were actually more swipes into offices than, than in July of, of 2019. So New York is having a major comeback and there's a sense that a lot of big people, the big Norwegian Fund is investing in Manhattan real estate. A lot of people are, are looking at Manhattan as being on the comeback trail. So maybe Mr. Cohen will have an easier time offloading some of those buildings. But as we were talking about before with Cubicle Chic, you know, it sounds like you and I aren't going to enter the office, Fred, but it sounds like lots of people are.
- [58:40]
B
Well, yeah, about that. I'm comfortable here. I'm going to stay un cubicle unchic here in my home office.
- [58:49]
A
You're good where you are. I'm glad. 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 Nikolaus 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.