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Business of Home Podcast
The Thursday Show: Is the design industry ready for more tariffs? Plus: Ken Fulk's new LA shop
00:57:16
BOH executive editor Fred Nicolaus and host Dennis Scully discuss the biggest news in the industry. Later, designer Ken Fulk joins the show to talk about his new Southern California retail outpost.
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- [00:08]
Dennis Scully
This is Business of Home. I'm Dennis Scully and welcome to the Thursday Show. Later on, I'll be talking to designer Ken Falk on the opening of his new shop in la. But first we're going to catch up on the news, including Amazon's Ultra Cheap Marketplace, a check in on the housing market and how tariffs might impact the home industry. To do all that, I'm joined by Business of Homes executive editor Fred Nichols. Hi, Fred.
- [00:33]
Fred Nichols
Hi, Dennis. How's it going?
- [00:35]
Ken Falk
Great.
- [00:35]
Dennis Scully
How you doing?
- [00:36]
Fred Nichols
I'm doing okay. I think I've caught my yearly cold. I don't know if listeners can hear that, but hopefully it lends my insight on ugly chic a certain gravitas. This week you have a cold as well.
- [00:47]
Dennis Scully
I'm led to believe anytime I'm getting ready for a trip, that cold is right there with me as my travel companion. So yes, but what a trip.
- [00:55]
Fred Nichols
What a trip. Why don't we tease where you're headed next week? It's not just headed home for Thanksgiving. It's headed to sunny California to take a look at a certain new gallery.
- [01:04]
Dennis Scully
That's right. By the time this show comes out, I'll be getting on a plane and heading onto multiple planes actually to get to Newport Beach, California and check out the new RH Newport Beach. What is it? A 90,000 square foot gallery with the first of its kind, the first ever standalone waterworks location. 3,000 square foot waterworks location inside. So it's gonna be pretty exciting.
- [01:32]
Fred Nichols
I think we need to do like a remote piece where you call in live to the station from on the scene with the trench coat and the wind blowing in your hair. Here I am. Anyway, let's look back quickly. On Monday's episode, an interview with interior designer Tom Stringer. Very thoughtful conversation. I really like this one.
- [01:48]
Dennis Scully
A very thoughtful conversation. And I was so grateful to him for speaking to us about so many different topics that we're keenly interested. The long term strategy and succession planning for his firm was very interesting to hear. He's someone who's really taken that subject seriously and has elevated partners and has really created a structure where he's tried to retain employees for the long term by offering various incentives for them. It was really good conversation. What did you think?
- [02:24]
Fred Nichols
Well, you knew what I'm going to focus on Dennis. It was his unique client vetting method which is a mix of the high and the low. We talked about how he wants to make sure his clients have some sort of philanthropic goals, which I think is very admirable. He wants to make sure they have a genuine connection. Then the third item is, is the client comfortable swearing around him? Which I think is actually kind of brilliant, because if you're comfortable enough to drop a few F bombs, I think that indicates that you have a level of comfort and ease that maybe will help with the more difficult mom of the design process. I know you're not a big cursor, Dennis. What'd you think of that?
- [03:01]
Dennis Scully
Well, you know, in my house, Fred, we weren't allowed to use the F bomb, so I felt very differently about it. But I thought that was completely charming that this was a way that the client revealed how comfortable they feel around him. And a lot of what he's looking for is just that he's looking for people that he can have a drink with and have a good time. And so the F bomb, the F bomb litmus test was just a way to say, oh, yes, this person does feel comfortable with me. Great, let's. Let's work together.
- [03:32]
Fred Nichols
Exactly. Exactly.
- [03:34]
Dennis Scully
All right, we're going to get into the news in just a moment, but first, a quick break. This podcast is sponsored by Anthem plus Showering only from Kohler. Anthem plus invites you to transport your body and mind with every shower. It combines water, steam, light, and sound in a fully immersive sensory experience with custom settings to match any mood and enhance any routine. Discover how you can personalize your escape with Anthem smart showering@kohler.com showers. This podcast is also sponsored by Claphs, the world leader in sauna luxury. For thousands of years, sauna bathing has provided the heat we crave. With Claph saunas, you can select the exact levels of temperature and humidity to create a wide range of soothing atmospheres, from a classic Finnish sauna to a gentler, soft steam experience. When you step into a Claffs sauna, you're in control. To learn more about the leaders in sauna luxury and their exclusive trade programs, visit claffsusa.com that's klafs USA.com and we're back. First up, Fred, Amazon debuts a factory direct marketplace.
- [05:07]
Fred Nichols
Yes. Last week, the e commerce giant officially launched the Amazon haul store, H A U L, which boasts a selection of products for $20 or less, including some home goods like pillows priced as low as $3. I bought 100. What about you?
- [05:23]
Dennis Scully
And the oceans wept, Fred, is all I can say to $3 pillows. But we'll get into it.
- [05:30]
Fred Nichols
If you have the choice between one Rebecca Atwood pillow or 50 hall pillows, I'm going to point you in the Direction of Rebecca Atwood. Yes. So we talked about this a little bit before. What this is sort of a reaction to is the popularity of these shopping sites like Temu, I think is probably the most direct comparison. Shein is another one for fashion. What they do is they bas basically connect factories, largely in China, directly with US consumers. So there's no real middleman. Everything ships directly from the factory and the prices are absurdly cheap. Now, the rumor was that this competitor that Amazon is launching to those sites, you know, which is, of course, it's called hall, was going to have a $20 sofa. It does not have a $20 sofa. I don't know if I should be happy or disappointed. What was your reaction exactly?
- [06:12]
Dennis Scully
I found myself relieved that there wasn't a $20 sofa, and I just don't think such a thing should exist. Although I did see on the previous site $20 dog beds that were sort of positioned as sofas. But that's as far as I'm willing to go on that.
- [06:29]
Fred Nichols
What did you think of this site? I'm curious. It just launched. It's mobile only. Did you give it a spin? In all seriousness, I certainly have not bought any 299 pillows, but I did look at it for a minute. What'd you think?
- [06:40]
Dennis Scully
No, no. And I looked at it too, and it's interesting because it comes at a time where we're talking so much about China supply chains and in fact, we're going to be talking about that more in detail shortly. But a lot of companies have come along that have created meaningful competition for Amazon at these very low price points. And so this is in part obviously a response to that. Interestingly enough, Amazon's really big competitor is Walmart in this space and with so many of those items. And Walmart has really been doing quite quite well. And so Amazon has a lot of catching up to do if they're really going to take this seriously, and I don't know that they are.
- [07:27]
Fred Nichols
Yeah, it's interesting. I mean, when we first talked about this, I think the natural reaction is, oh, my gosh, Amazon's selling even cheaper stuff. This is end times, what's going on here. But now, actually looking at it, maybe this is a little bit too much of a hot take, but I didn't feel super impressed by it. It didn't seem like there was a ton of really great stuff on it. There's a tendency to think, oh, when Amazon does a thing, of course it's going to work and it's going to take over the world. But I'm not entirely sure this will really unseat the likes of Temu and Shein or, you know, dig in on Walmart. I mean, I know they just launched it a week ago, it's hard to say, but I didn't feel super blown away by it. Maybe others will feel differently.
- [08:04]
Dennis Scully
No, I agree. And I don't, and I don't say this in a nose in the air kind of way though that is usually my position about a great many things as we know. But I looked at all of this merchandise and I mean they're saying that there are 300 million different items available. And I looked at most of them thinking why does this even need to exist? And I'm sorry that it does. And I hope that this doesn't catch on because all of this just looked like it was headed for a landfill somewhere soon. And so I hate to encourage people to rush out and buy all these really inexpensive things just because it's so much easier to do now that Amazon has put it on the app.
- [08:46]
Fred Nichols
Yeah, I think, look, the way you get these crazy cheap prices is not through sustainable manufacturing and great labor practices. The same critiques have been leveled against Temu and Shein. I'm sure they will be if hall continues on. I will say Amazon, I've been talking about this a lot with people recently. Amazon has so fundamentally changed the home industry in ways that are still becoming clear. It just changed consumers expectations around speed and accessibility of price. We've talked about it before, we'll talk about it again. My fear with this kind of stuff is that it changed people's expectations around oh yeah, you can get a pillow for $299. So why on earth would I pay $150? But I will say that I don't know, it didn't seem like a compelling consumer product. So I'm hopeful that there's still a market for reasonably priced pillows out there. Don't have to be 150, but 299 is a little bit suspicious in my book.
- [09:36]
Dennis Scully
No, I agree. And I thought that you did a great job on the last show of outlining some of the labor concerns and some of the things that we should be talking about in the context of all of this. As I say, and it sounds like you feel the same way, it's not super impressive. I hope it doesn't catch on in a meaningful way. And so I'm hoping that this is just a blip and we move on. And let's not even introduce that $20 sofa. Okay, deal. Amazon.
- [10:06]
Fred Nichols
Great.
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Dennis Scully
Moving on. We're going to do a housing check in. It's been months of uncertainty in the housing market, but this week we saw a few bright spots. US Homebuilder conf rose to a seven month high in November. And the single family home sector seems to be having a record year when it comes to new deals. The question is, Fred, does any of this point to a turnaround?
- [10:30]
Fred Nichols
I've probably said this before, but for me, homebuilder confidence is one of the funniest metrics that we track. It's one of the few industries that is allowed to have people describe, how are you feeling? Look, this is an interesting statistic. The numbers are getting to reasonable highs. 7 month high is nothing to sniff at. It comes at a time in which, as we seemingly talk about every week, the housing market is still sort of frozen, especially for existing homes. And I think the problem is with an existing home sale, it's like both the seller and the buyer have to be comfortable with an elevated mortgage rate, whereas a home builder, it only takes the buyer to accept that and then you can move along. So there's a little bit more flexibility and we need more homes. So I guess these numbers, if not a signal of glory days, are here, certainly good news. What do you think, Dennis?
- [11:20]
Dennis Scully
Well, I mean, I agree with everything you said. It has been a very challenging time for the past several years and it looks like this year will once again go down as the worst year since 1995 when it comes to existing home sales. And that is challenging. What's interesting about the optimism in these home builder sentiment numbers is this notion that this new administration is likely to bring with it. So the market hopes a great deal of deregulation and the Trump administration was talking about possibly making more federal land available for development and also getting rid of a great deal of the regulations that have been perhaps preventing a lot of building in certain areas. Though, truth be told, as we know about regulations and housing, most of them tend to be highly concentrated locally. And so there's not a lot that the federal government can do to actually make it easier for you to build a home in Malibu. But you do talk to a lot of people in the industry and they all universally point to it is pretty darn hard to get a home built, even if you have all of the resources and the land and everything else. So I think a lot of people are just feeling optimistic that if nothing else, we will look at a lot of these regulations and maybe make some meaningful changes.
- [12:49]
Fred Nichols
What do you think is harder getting a rocket to Mars or building a home in Malibu? What's the bigger challenge?
- [12:55]
Dennis Scully
Yeah, well, exactly. I think Elon Musk makes rockets slip pretty easy. And you talk to the designers who want to build in Malibu, and they're like, no, this is harder. And that's unfortunate. And I get it. And the regulation part and all the paperwork has. Has really inhibited a lot of development. I understand that.
- [13:14]
Fred Nichols
Yeah. And I mean, I think, like, another thing is kind of going on here, which is that regardless of how you feel about the incoming administration, either yay or nay, I think a lot of people are just relieved that the election is over. You know, I think there's a lot of people thinking, okay, now is the time to move ahead with this project, you know, whatever their political leanings are.
- [13:30]
Dennis Scully
No, absolutely. I mean, what's also interesting, in the past few years, we've seen a pretty dramatic shift. You know, new homes used to just be one in six homes available the market, and they're now about one in three. It's a very meaningful shift towards these home builders. And home builders have actually been quite clever in getting around some of the challenges of higher mortgage rates by actually buying down the interest payments for the first few years for people that use a home builder. And that's helped ease some people into new homes in a way that they might not have felt as comfortable with, with the rates as high as they are. So home builders are playing a much bigger role in what's happening in housing today, and that is significant. We talked about the merger and acquisition activity going on. There's actually been quite a few meaningful acquisitions of home builders, in some cases by some pretty clever Japanese firms that have a much more efficient way of building homes and creating 3D models and actually building the homes in a factory and then bringing them in. So there's a lot of room for innovation in the housing market, and I think we're going to see more of that, too. Along with this optimism, we'll see if it all pans out and if everyone who's predicting a rosy spring summer 25 really gets to see the sales pick up as much as they are. But there's some green shoots at least.
- [15:00]
Fred Nichols
Absolutely.
- [15:01]
Dennis Scully
Moving on, Fred, we're going to get into the exciting subject of tariffs. That's right. For this week's feature, Fred, you wrote about about the potential new round of tariffs from the incoming Trump administration. What can you tell us?
- [15:15]
Fred Nichols
What can't I tell you about tariffs, then? That's the bigger question in all seriousness, it's difficult to talk about this because I've never heard more conversation in the home industry about something that has not happened yet because we don't know what these tariffs are going to be. It's very difficult because on the campaign trail, of course, Trump is a huge fan of tariffs and in his first administration levied a bunch of them against, specifically against China. Trump has talked about a 60 to 100% tariff on everything coming out of China and 10 to 20% tariffs from the rest of the world. But it's very difficult to know. Well, is that sort of political rhetoric? Is that a policy that's going to be enacted? People just don't know. So there's a lot of uncertainty and everybody's reacting to it in a different way. And so I talked to everybody and wrote a long article about it and.
- [16:01]
Dennis Scully
Wrote a long article. But you had some good conversations, it looks like. And it sounds like many people are thinking that these tariffs are coming in a meaningful way, one way or another. Yes.
- [16:13]
Fred Nichols
Yeah. I mean, I think last time, even though there was a lot of rhetoric around tariffs, I still think it caught people by surprise. You know, it was like, for a lot of categories, 25% of stuff coming out of China. And I feel like this time people are very dedicated to taking it seriously. I mean, the president does have unilateral control over most kinds of tariffs, so it doesn't have to pass through Congress. Whatever Trump wants to do basically can get pushed through. And because he's been talking about it so much, I think people are just. They don't know what the number is going to be, but they're assuming it's going to happen. So they're trying to plan accordingly as much as one can for a number that is not totally clear.
- [16:49]
Dennis Scully
Yeah, it was interesting not to take away from the piece, but it was interesting to see that Satya Tiwari at Syria was ordering a lot of extra inventory. It sounded like.
- [17:01]
Fred Nichols
Well, yeah, I think like Satya was saying, I want to keep three more months in production on the water coming over our way. There's a lot of complications here, too, because, of course, Trump takes office on January 20th. Presumably he could start living tariffs soon after that. But that's also around the time of the lunar new year, so that will slow down production for a lot of Chinese factories. So there's this very, like, hard deadline that everyone has to consider. Do I want to bring in a ton of stuff? And, you know, some people are. The trick there is that it comes at a higher Cost because shipping rates are going up in relation to all of this development. And so there's a lot of variables to consider. Some people just think it's not really going to be as much as 60 to 100%. There'll be carve outs. The administration will put up some tariff, but will be okay. Some categories like motion furniture and lighting, the components, there's just not a supply chain anywhere else. So those people have to kind of just hope for the best bringing stuff in.
- [17:55]
Dennis Scully
Which is so interesting that you say that, Fred. And we talked about motion furniture somewhat jokingly, but seriously a couple of weeks back and I've noticed that our house is showing quite a bit of motion furniture. Our old friend from LoveSac apparently is showing quite a lot of motion furniture. And RH I expect that I will see some motion furniture on the floor in Newport beach because they're showing it in their modern catalog and there's quite a bit of motion furniture that's suddenly being shown.
- [18:25]
Fred Nichols
Yeah, I mean, I think, look, it's not just motion furniture and I'm not saying that all motion furniture is made in China, but there are just some things that are difficult to get out of the country. So some people told me, look, we got through the first round of tariffs by sharing costs. The factory agreed to take a lower margin, we took a lower margin. We cost engineered, we got a slightly better. It didn't raise prices for the consumers as much as some people were expecting. The problem is that if you add 60 to 100% on top of that, there's no margin you can shift around to make up the difference. A lot of people are just, if you can't get out of China, they're accepting the reality that, look, I'm stuck here, my competitors are going to be stuck here, prices are going to go up and consumers are just going to have to deal with it.
- [19:07]
Dennis Scully
We've been talking for some time about reshoring and bringing a lot of this production back. Did many of the people that you speak to think that that was a realistic long term goal of bringing a lot of this production back home?
- [19:22]
Fred Nichols
Well, it's complicated because it depends on what category you're talking about. There is a good amount of US upholstery manufacturing and we spoke to a couple people for the piece. Caroline, the producer on the show, did some research for it. And some people said that during the original tariffs in 2018 and in Covid following which of course increased demand, there was more domestic manufacturing and it improved these people's businesses. It be dismissive to say that it has no effect and manufacturing is never coming back. I also think that, like, several people told me, like, look, a 60% tariffs on China, that's going to make them look at domestic manufacturing. I think the complicated part, though, is that there's very little manufacturing that is solely domestic. You know, even people who make upholstery almost exclusively here, a lot of them import fabric from China. Like, the components come from China. So no matter what is difficult to get out of this concept of, you know, we import something from overseas. I also think that, like, when everything went offshore in the 90s and the 2000s, a lot of labor left the marketplace. There's not as much specialized labor in the US as there was historically in the furniture industry. So people, yeah, say that'll increase domestic production and that's something to celebrate, but it's not coming back overnight. Some people said it might take. If you really wanted to bring all this production back to the US it would take a decade and you'd have to accept that prices in that decade would be going up.
- [20:39]
Dennis Scully
Yeah. No, no. I mean, as you and I have talked about it, it took years for all of that production to go overseas, and it would take many years for it all to come back. And I don't think many people want that to happen. In certain categories, it was striking to hear the president of Hickory Chair talk about how much he manufactures case goods in the US which is an exception because.
- [21:01]
Fred Nichols
Right.
- [21:01]
Dennis Scully
I mean, that's usually what's being made overseas especially. So it'll be interesting to see. I mean, again, we don't know how this is going to play out. Yeah, it's a lot of speculation, but it sounded again, like a lot of people that you spoke to said, oh, no, this is coming one way or another.
- [21:19]
Fred Nichols
People are making moves. And I couldn't get everything on the record, but there were rumors about people really trying to pull aggressively out of China. Not all of them may end up in the us Many of them will go to Vietnam and Mexico. But this is for real. I think it will have unforeseen effects on the supply chain, and it will likely raise prices, but it will also likely increased domestic production. So those are the things I'm going to be watching out for when we see real numbers. That's really the proof and the pudding on this one.
- [21:44]
Dennis Scully
Exactly. Well, good news. We won't have to wait long. January 20th. I'm sure we'll start to see a lot more happening there. In the meantime, we're going to move on to the pretty ugly trend.
- [21:56]
Fred Nichols
Finally, a trend for me. Well, for El Decor. Last week, writer Julia Cancio reported on the latest design trend taking over the Internet. A French concept known as jolie lade, or pretty ugly. That's pretty slash ugly, not very ugly. The term took off after author and design expert Virginia Chamley made a video breaking down the approach. Let's hear it. I am all about an ugly, chic moment in interior design, and you should be, too. Here's what I mean. As I write about in my substack today, I really love the idea of imperfection in interiors. And I think interior designer Jim Walrud summed it up very well when he told Architectural Digest in 2015, I like things that bother me. Dennis, do you like things that bother you?
- [22:37]
Dennis Scully
Not at all, Fred. Not only do I not like things that bother me, but an ugly, chic moment. No. Again, I say no, I'll pass.
- [22:46]
Fred Nichols
You know, what's interesting is like, I actually, I read this and I thought, yeah, that's really smart. Like, I like this idea. And I looked at the Instagram post from El Decor, and there were so many designers were coming in really hard on this, really disagreeing with it. I think it was because one, an example of this phenomenon was this sort of weird statue of, like, a toe popping off of it.
- [23:04]
Dennis Scully
That was horrible.
- [23:05]
Fred Nichols
Toes are very triggering. I think I have to defend this phenomenon. I think one thing that the writer Julia can see pointed out very cleverly, I think, is that we are in this age of algorithmic flattening. Everything looks the same. There's like two aesthetics. It's brown or rainbow explosion. Everything just kind of fits in the same mold. And you need something a little jarring to grab people's attention. And there is, you know, it seems weird to say there's beauty and ugliness because that's maybe a little bit of an oxymoron. But there is something attention grabbing about something that's just a little bit ugly. I think the problem was that they just chose things for the story that were maybe more than just a little bit ugly. I don't know.
- [23:44]
Dennis Scully
Well, I mean, I think that the person who referenced embracing the imperfect. And so I do agree with you that it sounded like some of this was in response to the cookie cutter nature of a lot of what we're seeing these days, and dare I even say it's in response to all the ivory boucleing going on and sort of neutralizing that palette. But I do think in reading a little bit more about this too. And reading about the original meaning of this term. You know how sometimes you get to like someone even more and they start to become even more attractive to you or an object that you might not have liked at first. You're. Your spouse likes it a lot, and so you kind of make it work in the space and you come to like it over time. I mean, it sounded like some of this. Was that like something that might.
- [24:40]
Fred Nichols
Is this something like therapy? Dennis, here. You know how you're in your own house.
- [24:44]
Dennis Scully
You know how my wife moved that lamp into the living room and I said no, and then eventually I lost out as usual, and now I really like that lamp. Yeah, it's a lot like that.
- [24:55]
Fred Nichols
Well, I mean, I think that's true. I also think, like, you know, maybe on some level, a better word for this or a word that's less objectionable is unexpected rather than ugly. I do think that no one wants to see the same boring old thing. And I think that's something that grabs your attention and is really intriguing, interesting, maybe a little bit odd. All of those I'm a fan of. And I think in some ways the word pretty ugly just grabs your attention much, hence us talking about it. But I don't think that most designers would disagree that an unexpected or attention grabbing touch is not a nice thing to have in a room. Maybe not the bedroom, but a nice thing to have.
- [25:33]
Dennis Scully
Well, I think that designers often talk about making your eye move around the room.
- [25:38]
Fred Nichols
Yes.
- [25:39]
Dennis Scully
Yeah, right. And they don't want it to be flat or for your eye just to have nowhere to go. That's interesting. The question is, does it need to be something jarring and does it need to be something ugly? I vote for no. But we'll.
- [25:55]
Fred Nichols
A giant toe is going to make the eye move in a different direction. So that steers things in a very clever.
- [26:00]
Dennis Scully
Going to make me leave the room.
- [26:03]
Fred Nichols
We have to apologize to the designer, whoever that was. Maybe the client made him do it.
- [26:08]
Dennis Scully
Right. I'm sure that's what it was. All right, that's it for the news, but there's plenty more to check out on businessofhome.com including a look at Casper's next chapter and advice from Sean Lowe on the best approach to billing. We'll be back in a minute, but first, a quick break. We're taking a quick break from the show to remind you about claffs, the world leader in sauna luxury. The finest natural materials are essential for creating the claff's sauna experience. Carefully selected woods from around the world lend distinctive qualities to each claf's design, making every moment within your sauna exceptional. When it comes to material selection, there's no compromise. Clafs the Art of sauna since 1928. To learn more about the leaders in sauna luxury and their exclusive trade programs, visit klaffsusa.com that's klafs usa.com this podcast is also sponsored by Anthem plus smart showering only from Kohler with Anthem plus, you can control up to 12 water outlets, design custom lighting environments to match your mood, and create your ideal escape. With three levels of soothing steam set to music from your own playlists, every moment asks you to imagine when you take a shower, where does your shower take you? Explore Anthem+ smart showering@kohler.com Showers and we're back. I am joined today by interior designer and, wait for it, Ken, purveyor of the extraordinary Ken Falk. Right. I mean, who doesn't want an introduction like that?
- [28:07]
Ken Falk
It's as if I wrote it myself.
- [28:09]
Dennis Scully
Exactly, exactly. And now you're going to have to live up to it. So let's see if you can. But we're talking to Ken, who has, just for some reason that we can't fully understand yet, but he's going to tell us, has opened a retail location in West Hollywood. And it's terribly exciting. So tell us what's the story here, Ken?
- [28:32]
Ken Falk
We've had a studio in San Francisco for the entirety of my career. And about a decade ago, or maybe a bit more, we opened a studio in New York in Tribeca. And so we had had plans to open a studio in Los Angeles. And so we found a charming bungalow where our studio was going to be. And simultaneous. A few years ago, I had a longtime friend join me on this journey who became our CFO at my company. His career had consisted of being the CFO and president of some big major retailers, all multibillion dollar companies. And he was intrigued by my business and came on board. And the early days of his tenure really started talking about product and what we do and why we do it, you know, and then we also do hospitality work that gets to be experienced by more people. You know, there's always been this craving of how could we take some of the magic we create and bring it to more people. We've sort of dipped our toe into that. Earlier we had a collection, a large first designer ever to do something with Pottery Barn about eight years ago. But it did sort of whet the appetite for the idea of making our World more available to folks. And so LA provided an opportunity since we were already creating a studio from scratch. I love a story and I love a quote unquote movie. And the sort of movie for our Los Angeles moment was in my head. What if Bunny Mellon, my fellow Virginian, really was an icon in her understated elegance. She had a wonderful farm in Upperville, Virginia. And so in my funny little mind and world, I had imagined, well, what if she had kept a little bungalow in Hollywood, sort of understated and discreet, tucked into in the Kennedy era, tucked into the hedges there and what would it be like? And so it really was a bit of a tribute to that idea, but also a little glimpse into our own world and a feeling like you were coming to visit me at home.
- [31:02]
Dennis Scully
So location wise, if I'm looking at the map correctly, Ken, it looks as though you're right across the street from the big blue whale, the Pacific Design Center.
- [31:11]
Ken Falk
We are from the of beloved giant, incredible iconic Pacific Design Center. Exactly. And we are directly across the street, sort of tucked into a beautiful little courtyard. It does feel a bit European. We've had a series of artists who are our friends come and they've done a trump loyal effect neoclassical like drawings on the facade of the building which is painted this. I call it Christoffel Green because I used to love those Christoffel boxes. They changed the color, by the way. I know which a horrible mistake.
- [31:49]
Dennis Scully
What were they thinking?
- [31:51]
Ken Falk
I mean, I've now patented the color so it's now Ken Falk Green and not Christoffel.
- [31:56]
Dennis Scully
Well done.
- [31:58]
Ken Falk
Thank you. I swooped in. So it has wonderful details on a relatively modest building to give it a sense of wit and whimsy. And we followed that idea on the interiors. One, despite spending other people's money for a living, I'm the pretty. I'm pretty frugal on how to create beauty on a budget. And so we really leaned in and I also wanted it to be a celebration of decorative arts and decorative artists. So in addition to the facade of the bungalow, we painted all of this series of rooms from the bunny melon inspired potting shed to this beautiful Italian masters pale pink plaster that reveals a damask, or it's almost like the damask peels away and reveals the plaster underneath to a draped beautiful sort of dining room area into a faux bois knotty pine panel den. And so really a series of rooms. And then upstairs is sort of a continuation of the residence slash studio where we have really some beautiful offices and a home like space and so the entire thing is very. I could live there, so to speak.
- [33:24]
Dennis Scully
Well, and what do you hope this will do for you? What void does this fill? I mean, the empty hole in my heart, what will it be? What itch does this scratch? I mean, tell me what you've been longing for that now find finally is released.
- [33:45]
Ken Falk
You know, I like playing the shopkeeper, that's for sure. As I said, I do shop for a living. So I have a lot of sort of personal experience on the other side of that equation. And, you know, I don't lack for ambition. I always love to do. I love, you know, my work is my life. I don't have a line between it. It is just one big bowl of, like, deliciousness. And, you know, I did. I feel like I won the lottery in life. And I also recognize that it's all so brief and having a desire to get to as much of it as I can while I can. You know, I think about this sounds cheesy. I might have said this before, but I do. So I so resonated with me that song in the musical Hamilton, like, why does he write like he's running out of time? Because there's, you know, I always feel like we're all kind of running out of time and there's so much stuff I want to do and the idea of creating beautiful things to share with the world or being the conduit to share them. So I think that this charming little shop will probably not be the first. I think we'll have a couple more of them. We also are debuting a rather ambitious new site for our business where you'll be able to not only see everything in the shop, but you'll be able to see everything that we've sort of designed, and it will be available.
- [35:20]
Dennis Scully
Now, this wonderful CFO that you spoke of earlier, did he share with you some of his own experience and mentioned to you some of the challenges of having a retail operation and an E commerce operation?
- [35:40]
Ken Falk
I'll give him a name because he deserves all the credit. His name is David demattea, and he is a longtime friend and a wonderful human who really came and I think made a big difference in our core business. But if Dave did anything, it was help solidify that through a lens with vast experience.
- [36:04]
Dennis Scully
Well, and do you imagine not just because it's across the street from the pdc, but also just that whole area is a design district? And I wonder, do you imagine a lot of designers being the customer initially or a mix of consumer and designer? How have you thought about it, I.
- [36:23]
Ken Falk
Really think it'll be a mix, certainly the convenience of the shop. Some of my favorite stores on the planet happen to be in Los Angeles, so I think we're in good company and that's an obvious community that is there. But I think beyond that, we have so many people that I feel like I know them. I control my own social media and I respond to everyone. And so I build these relationships with people I've never met and feel like they have become not just an audience, but sort of I have a friendly connection with them. And the idea that someone could come in and whether it's buying a candle or a charming dog bed that we've made out of fabric that I designed for Pierre Frey, that you're only going to get in this shop, it makes me happy that folks could do that that aren't necessarily going to sign me up to work with them as a creative director on some massive project, but that I have a connection point with them that doesn't involve the sort of commitment that's required to do the core part of our business, to be involved in that.
- [37:39]
Dennis Scully
As you were just saying earlier, you don't imagine that this is going to be the first and only store, it sounds like.
- [37:46]
Ken Falk
Yes, I mean, yeah, no, I think we do have have several studios and I certainly think those are cities that we love and we do lots of work in and are sort of the foundation and the base. And so those are probably the most likely outpost for the next iteration of this. And then beyond that, I don't know yet. Let's see how it goes.
- [38:13]
Dennis Scully
DENNIS but so speaking of, of the movies, in your mind, does this store and the E commerce business, does this tell us anything about how the script has evolved and the movie is going in a slightly different direction, or is this just more expansion of everything? Ken Folk, does this tell us you want to do less of something else so you can focus on this, or.
- [38:47]
Ken Falk
No, no, no, I don't think it's a signal of that, so to speak. I think it's just the recognition that one we're probably a lot of people have been like, oh, this is a long time coming. Why haven't you done this before? And some of it was just, what can you pay attention to what is next? And I think part of it was the relationship that I began with Dave. And it's not like we haven't thought about it, but I think it is a natural progression and it's been done with a lot of thoughtfulness and it's really the Seeds for something that I think will grow and will continue to grow and will expand and will be more offerings along the way, because that tends to be how we approach most things. We sort of start in a relatively compact, controlled environment and then let them blossom. And I feel like this is one of those instances and will be a real pillar and a core part of our business, which now has become so multifaceted, multi hyphenated. But it's important to me that we don't just do more, but that we do it well. And I think we'll make sure that we get this right and before we begin to just hit the go button on growth, because I don't think that growth for growth's sake is the right thing to do. I think, you know, we want it to be well received and to be sought after and to sort of blossom, so to speak, and the growth will be organic. It's just sort of how everything has happened in my world. But I do, as I said, I have ambition around making sure I can get to all the good stuff in life, and I think this is part of it.
- [40:57]
Dennis Scully
Do I recall you've got a First Dibs storefront, and does this fit in with that, or is that sort of a separate project unto itself?
- [41:07]
Ken Falk
It does. We do have a first Tip storefront to help with my shopping addiction, to.
- [41:14]
Dennis Scully
Help clear some of the merchandise in.
- [41:16]
Ken Falk
The large warehouse, to help share it in my big warehouse. And in our San Francisco studio, we've long had, really, a gallery for everyone that works with us on the lower level that we call peep show, and we display items there. You know, sometimes we'll. If you're a designer, pal, you can come in and look at stuff. But typically it's really been for us. But First Dibs has been a wonderful partner for us to share some of the finds and, you know, get a glimpse into our warehouse. I think that'll be the next thing we should do is go on a video tour of my warehouse, because no one's ever seen it. It is quite something. And people would love to see it.
- [41:59]
Dennis Scully
Right? You can imagine.
- [42:00]
Ken Falk
I mean, yeah, I love to see it. I go and I'm like, holy cow.
- [42:05]
Dennis Scully
Well, I mean, is all of this being sort of funded internally through the growth of your business?
- [42:12]
Ken Falk
Through my vast fortunes, Dennis. My vast. I know. I wish I remember my very first job out of college. A woman who I've remained friends with. She was like, I hope you're not offended by this, but you would be the best rich person I've ever met. I'm like, I know I would be and I still feel that way. I would be. I would be a great rich person. But yes, this is all just us. It's a paradox. It's hard to say that I live in my means, yet I'm typically living beyond my means. So I don't know how that both is possible. How about this? We're self funded, yet I live beyond my means. That's the best way to say it. Which is probably not a good combination, but so far, so good. I've made it.
- [43:03]
Dennis Scully
I feel certain that David can help you with that.
- [43:06]
Ken Falk
Thank you.
- [43:07]
Fred Nichols
Right.
- [43:07]
Dennis Scully
He's going to keep an eye.
- [43:08]
Ken Falk
He's probably walking into traffic right now.
- [43:12]
Dennis Scully
Probably can't believe that this whole thing has happened, but. So tell me what else is going on. Tell me the many other things that are going on in the life of Ken Falk.
- [43:23]
Ken Falk
Let's see. Well, in our sort of, as I call, core business, we have some wonderful projects. We do work around the world. We're doing an exciting luxury hotel in Barcelona, which is fun. I can't tell you what it is, but that's a super fun project. We're reimagining. On the hospitality front, we're reimagining perhaps the most iconic hotel in America. Can't tell you what that is yet either, but you're getting like little sneak peeks. We're working on a 36,000 acre ranch in Wyoming for a private ranch, which is something fun. So great, great projects like that. And then, you know, we have been working to restore and revitalize some historic hotel properties that we purchased with the idea of maintaining their integrity and making them the best version of themselves. It has been. Been a lot of work.
- [44:29]
Dennis Scully
Yeah. Has that turned out to be a good purchase? Are you glad that you did that?
- [44:33]
Ken Falk
Of course I'm glad. It's not.
- [44:35]
Dennis Scully
Of course not.
- [44:36]
Ken Falk
But I don't ever do, probably much to the dismay of my cfo. I don't do anything because of money. I don't think you buy old historic properties to get rich. You buy them because I sort of can't bear the idea that they could be lost or ruined or spoiled. And so. And it began in Covid when it was such a challenge for so many of them. And it's a lot of hard work, a lot of hard work to do them, sort of all simultaneous. And I'm someone that firmly believes that, that people on the outside look at things and think, oh, it's success, but you really have to be willing to go on the crooked road and, you know, until finally you get to the point that gets identified as success. And, you know, there are probably failures along the way. But, you know, and we've restored, we've created, we have a nonprofit called St. Joseph's which is a large, really cathedral here in San Francisco, which is a modern day a art society and arts foundation. We have one house that we restored in Provincetown that has the Provincetown Art Society there in an old 1760s house. And, you know, a lot of it is really, Dennis, about trying to connect the dots about building communities, about being a good citizen, about, you know, trying to do, do good and do well all at the same time. And I talk a lot to clients when we start projects. I'm like, you know, we're not just rushing to get this, this. The process of. This is part of the beauty and part of the journey and part of the excitement that we learn and grow. And where we create those memories, it isn't just the finished product. So every day I'm a work in progress. How about that?
- [46:42]
Dennis Scully
Well, it's interesting that you say that, actually, because projects seem to be taking so much longer and costing so much more. And it does feel as if it is incredibly challenging these days to both keep clients engaged and hopefully lightheartedly amused in the whole process. And all joking aside, sort of keep them hanging on and see the end prize without getting too frustrated. Right. I mean, I feel like it's never been harder.
- [47:18]
Ken Falk
Yeah, I mean, it is when I sort of look back and then think about time and money that goes into projects now, which is. It's kind of staggering. But I do think that for me, because I have to love my clients and I hope in return that they. They love me. And so it's fun. You know, I think that's easy to forget when you're spending a lot of money and you're making millions of decisions for the joy to get stripped away. And so often people who are undertaking these large projects, you know, money isn't really the obstacle for them having what they want. You know, they could go buy anything. And, you know, it's really become from, I think, nearly all of our clients, it's no longer about accumulation or about status. It is, and it maybe sounds a little schmaltzy, but it really is about sort of time well spent and imprinting memories and who you're with and where your life is sort of unfolding and how I think we sort of become the facilitators and the, the orchestrators and lubricant of this thing for our clients that it's far beyond just delivering them a project or a home or it's, you know, helping to develop the life that's going to transpire there and, you know, make those memories. But even the process is part of that. And I try to remind them all the time and make it as. As fun and joyful as we can along the way. Just a lovely conversation last night with a client who was conveying, you know, we've done lots of things for them, including a very fancy plane. And, you know, they had flown somewhere in this fancy plane and he was so grateful because of how special it made, you know, their lives. And then he arrived somewhere and he was staying at. In a hotel room that we had designed. And then he went to dinner at a restaurant that we happened to have designed. And so the beautiful thing over dinner. I know, huh? The beautiful thing over dinner though, was. Which was so lovely. He's like, I'm living in a world that you crafted and my life is so much better because of it. It brings me so much happiness and I don't even know how to thank you. And I was teary eyed about it. Like, I don't think about it that way. But for him, you know, it really was that case. And you know, they. And to getting to do that for people, that's the drug of what we do. Because you know, you know how excited you get when you find a great gift for someone and you can't wait to give it to them and you kind of want to spill the secret ahead of time and you're waiting with the excitement and it's almost more fun to give it than it is to even receive that. And I feel like that's my job is to like trying to give people great gifts and bring them joy all the time and like, what a lucky thing to get to do.
- [50:29]
Dennis Scully
Well. And is that part of how you're seeing this store? Look how I'm bringing it back to.
- [50:34]
Ken Falk
Oh, you are full circle. You're good at this. Hello.
- [50:37]
Dennis Scully
Hello.
- [50:38]
Ken Falk
You should have a show. It is like, you know, I think the opportunity to spread more of that around and to engage with more people and to, you know, bring a little piece of that to a larger audience. Again, because I'm not a. Despite, you know, having a shop, I'm not a transactional person. I don't sort of see life through that lens. But the idea that I might be the purveyor of something that feels extraordinary. How about bringing it full circle There to someone. You know, I think we've all done it. Like we have a little mementos that make us feel good about it. Whether it's. I used to bring the hotel cost candle home because it reminded me of being transported to that place and I couldn't bring the whole thing home and I didn't have the money to live in a. An extravagant Jacques Garcia designed. But somehow burning that scent in my home made me feel that way or whatever memento I might have found along a journey. And I treasure them. My life is enriched by having them and seeing them and the memories they trigger.
- [51:57]
Dennis Scully
And is there a signature scent for the new.
- [52:00]
Ken Falk
Of course there is. Funny you say that.
- [52:04]
Dennis Scully
Funny you should mention.
- [52:06]
Ken Falk
Okay, here's the QR code where there are. There are two. They're actually getting ready to be available for you to. But they're two again, deeply personal for me because it's the only way I know how to do stuff. And they happen to have the sensor numbered. They're both are. You can come visit me as a result. Because they're both our house numbers, two of our houses because. Because they each remind me of the sort of environment and the feeling I get when I'm in Provincetown. And then the other is influenced by this other intoxicating, transportive place that we live in San Francisco. I call it the Tree House. And it definitely has a scent. And so it's made, by the way, entirely out of untreated redwood that has had no stain or anything or finish put on it. And it was built under a tent for two and a half years to protect the wood at first. So that house is mesmerizing to me, as is my enchanted life in San Francisco. And so we have a scent dedicated to that and they're sort of complementary yet utterly different. So they will be available for the first time ever at the shop and very soon online.
- [53:32]
Dennis Scully
Okay. Well, hopefully you've got deep inventory because people can hear this and they're going to be sold out.
- [53:39]
Fred Nichols
Dennis.
- [53:40]
Ken Falk
Sold out.
- [53:42]
Dennis Scully
Well, I'm excited for you. I'm eager to get out to LA and see the shop.
- [53:47]
Ken Falk
I'm sending the plane. Dennis.
- [53:49]
Dennis Scully
Well, you're so kind.
- [53:51]
Ken Falk
It may be a two seater, that's fine. It may take us a few stops, but we'll eventually get there.
- [53:58]
Dennis Scully
I look forward to it. I'm thrilled to get to speak with you and I really appreciate you making the time and I'm excited for you.
- [54:04]
Ken Falk
It's a pleasure to be back. Thank you for having me and I love Talking to you, Dennis.
- [54:14]
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.
- [54:22]
Fred Nichols
Fred, a podcast caught my eye. Not our podcast, another podcast.
- [54:26]
Dennis Scully
Wait, there's another one?
- [54:27]
Fred Nichols
There's at least one more. It's called Acquired, and it's a great show. It's these two guys who do these really deep dives into businesses, you know, like seven hours on Berkshire Hathaway. You have, you have to have the patience for it. But it's a really fun deep dive into the history of how a business gets built. And, you know, I've, I've been crossing my fingers that they do rh. They haven't done it yet, but this week they announced ikea. So I'm really excited to dig in on that and check it out. I don't know why I'm recommending it because I guess you have actually listened to it, so maybe you should be the one who's recommending this.
- [54:58]
Dennis Scully
Well, and it's such an interesting show and I don't want to give too much away, but the young founder of Ikea once borrowed 500 kroner to help build his fountain pen business in the early days. And that, that 500 Krone was the only money the company borrowed for the rest of its history.
- [55:19]
Fred Nichols
Wow. Amazing billion return.
- [55:22]
Dennis Scully
50% exactly. At one time he was worth like $60 billion himself and it was all just from borrowing 500 Swedish krona for his fountain pen business.
- [55:31]
Fred Nichols
I would not even know what a krona looked like if you handed one to me. What caught your eye this week, Dennis?
- [55:35]
Dennis Scully
It's an amazing story. What caught my eye? A follow up from last week's conversation or mentioning the fact that the Mika Erdogan sale was happening at Christie's and the first part of it happened and indeed some records were set. There's a new member of the hundred million dollar club as Renee Magritte went down for $121 million. And in total, the first part of the, of the sale brought in about 183 million. So well above the expectations. But, but many people were watching this quite closely as Mika Erdogan had a really tremendous art collection and was just such a tastemaker in her, in her day and many people were participating and it was fun to watch the on the phone bidding that was taking place and the price just go higher and higher. But so much talk about the art market struggling, but not at that auction. Clearly.
- [56:37]
Fred Nichols
Incredible designer, incredible collection. Really exciting to see that. I love that painting in particular. So, you know, this was just kind of a fun moment and a little bit of good news.
- [56:45]
Dennis Scully
Yeah, I agree. It was very fun. 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 at Business of. 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.