← Business of Home Podcast
Business of Home Podcast
The Thursday Show: Looking back on the biggest stories of 2024. Plus: RH picks up steam
01:05:37
BOH executive editor Fred Nicolaus and host Dennis Scully discuss the biggest news in the industry. Later, editor in chief Kaitlin Petersen and retail columnist Warren Shoulberg join the show to recap 2024.
Loading summary
Transcript165 lines
- [00:00]
Dennis Scully
Foreign this is Business of Home. I'm Dennis Scully, and welcome to the Thursday Show. Later on, I'll be looking back on 2024 with Boh's editorial team. But first we're going to catch up on the news, including Layoffs at Sotheby's, RH's latest earnings report, and the return of colorful bathrooms. To do all that, I'm joined by Business of Homes executive editor Fred Nickelhaus. Hi, Fred.
- [00:32]
Fred Nickelhaus
Hi, Dennis. How's it going?
- [00:33]
Dennis Scully
Great. How you settling into the new place?
- [00:37]
Fred Nickelhaus
Very slowly. I'm definitely listeners cannot see this, but I'm surrounded by boxes at the moment. The podcast studio is a shambles. I hope the podcast itself doesn't follow suit. I'm eager to take a break from unpacking and looking for my toothbrush to chat with you.
- [00:54]
Dennis Scully
Well, you sound great.
- [00:55]
Fred Nickelhaus
That's what counts. It's our last show of the year, we should say. I mean, we'll be obviously off next week for Christmas and then the week after that for New Year's Day. We may have a special episode to drop during that period, but the next time we look back on a week of design industry news will be in 2025. So we'll look forward to seeing you guys again then. But in the meantime, let's look back on Monday's episode, A Conversation with the Editor of House and Garden, Hatta Bing. Charming conversation, charming editor, charming all around.
- [01:25]
Dennis Scully
Yes, the delightful Hatta Bing. And it was fun to get to talk to her. You and I have heard from so many designers that British House and Garden is among their favorite shelter publications, if not their very favorite. And so it was great to have a conversation with her about how she thinks about putting the magazine together. And where the heck are all those celebrities? Turns out, not in her magazine.
- [01:49]
Fred Nickelhaus
Yeah, it's funny, so many people have told me over the past few months that like, the only magazine I read is Mother's House and Garden. So I thought we had to get her on the show to talk about it. I thought it was fun, very charming. And also just the first time I'd ever heard a magazine editor say we need to publish homes that are believable. I thought that was just such a funny are there a lot of non believable homes in shelter magazines? But I knew what she was saying. It was this idea of you want the home to actually look like somebody actually lives there, as opposed to just sort of like a brilliantly executed fantasy. So I think that's partially why Americans love it. Also, we love our anglophilia here, too, in the U.S. so that's probably part of it too, but lots of fun little elements of the conversation. She is, like many British magazine editors, charm personified. So worth a listen for a variety of reasons.
- [02:37]
Dennis Scully
Exactly. And surprising and refreshing to hear her say that not only are they focused on what they can do on TikTok, but also what they're going to be doing on WhatsApp. So, I mean, their team has their finger on the pulse of what?
- [02:53]
Fred Nickelhaus
I mean, I think it's a good idea. I haven't heard that many American designers say it's the only WhatsApp channel I follow, but I do think cool to try it out. And we wrote about what's Carol Caroline Burke, our producer here on the show, wrote about WhatsApp just a few weeks ago. Boh. Ahead of the curve.
- [03:07]
Dennis Scully
Aroline Burke. She'll point you in the right direction. And they also have great video content. I mean, their YouTube channel is very fun as well.
- [03:14]
Fred Nickelhaus
All right, all right. Enough of an ad for British house and garden era.
- [03:19]
Dennis Scully
Exactly. All right, we're gonna take a quick break and then on with the show. This podcast is sponsored by Anthem Showering Only from Kohler. Anthem plus creates a transformative world for 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 design a personalized escape with Anthem smart showering@kohler.com showers and we're back. First up, Fred cutbacks at Sotheby's.
- [04:12]
Fred Nickelhaus
Last week, the auction house laid off more than 100 employees and closed two regional offices, an effort to cut costs amid an art market in decline. Bad times over there at Sotheby's. I guess we should sort of talk about this in two ways. I know it's a little bit of a. A troubled art market in general, but Sotheby's itself has its own problems. Right, Dennis?
- [04:32]
Dennis Scully
Yeah, I mean, great point. We want to separate how much of this is the art market in decline and how much of this is a highly leveraged Sotheby's, which was taken private back in 2019 in a $3.7 billion deal that brought on quite a bit of debt and some outside investors, including the Wealth Fund from Abu Dhabi for about a billion dollars. So, I mean, there's a lot going on at Sotheby's. They were quite extended, and they were hoping that they were going to be timing this to a much stronger market than we've seen in the past few years.
- [05:12]
Fred Nickelhaus
Yeah, I mean, they took on a lot of debt and the thought was, hey, the art market is red hot, it'll be that way forever. Right. And then unfortunately, that is very much not the case over the past year, as best as I can tell, it's a couple things. I mean, one, it's sort of geopolitical conflict matters a lot for, because it's such an international market. You know, it's not like decorating for your home. It's, you know, buyers are in, you know, the Middle east and they're buying for a client who's in Russia who has money from China. So, you know, the more the world feels unsettled, the more difficult it is to buy and sell, you know, blue chip art. And the world has certainly felt very unsettled over the past 12 months. So that's part of it. But it's also just rising interest rates. That was sort of interesting to me. I don't know if I didn't realize there was such a tie in there.
- [05:55]
Dennis Scully
The interest rate issue, yes, the higher borrowing costs, often these are more leveraged purch people might realize. But I think also there was just a lot of, there were a lot of other places for people to put their money in the past couple of years. And it is a cyclical business, the art market. And there were just a lot of other things that were calling on people's attention. I don't know if we can connect the slowdown in the high end housing market, Fred, but should we try, should we try and make that connection?
- [06:26]
Fred Nickelhaus
I mean, that explains everything in our world. So why not let's explain everything in the art market? I mean, I do think, look, you don't necessarily buy a Picasso just because you moved. You know what I mean? I think these are purchases that are a little bit more considered outside of the normal cycle of moving to a new apartment or buying a new home. But they do matter. I think when you're buying real estate, moving into a new place, that sort of puts you in the decision window for buying a new piece of art or maybe selling pieces of art that you don't need anymore. I would guess there is some connection between the frozen housing market and a sluggish art market. Maybe we can write an article about it and put our money where our mouth is. But I think there's probably some kind of connection there. I do wonder if there's sort of a tie in here for designers simply because designers advise on art and buy art for clients. And I think amid a struggling market. There's maybe reason to believe that designers can be aggressive and that maybe certain galleries may be more willing to make a deal than they normally might. That might be a little bit of speculation on my part, but I do think it's an interesting time in the art market and maybe there's a way for designers to come out on top.
- [07:31]
Dennis Scully
No, I agree. And I do want to try and get an art expert on the show and have a conversation about this because I'm hearing about it from a lot of high end designers and just people in the industry in general. So it's obviously having an impact and we should understand it better in the new year and hopefully we will. All right, moving on to the big exciting part of the show, Fred, for me at least RH earnings a Christmas.
- [08:00]
Fred Nickelhaus
Present a week early here. We got an RH earnings call before the end of the year. The retailer formerly known as Restoration Hardware released its third quarter results last week, reporting a boost in revenue that sent RH stocks surging two quarters in a row with relatively good numbers and certainly a lot of enthusiasm from Wall Street. What'd you make of the call in half an hour or less, Dennis?
- [08:24]
Dennis Scully
Where to begin, Fred? I mean, once again, it was a call where the numbers that they actually wrote reported were a little bit disappointing, but that wasn't the message that anybody wanted to focus on. And Gary Friedman had such a long laundry list of initiatives and things that were going on. Most importantly, I think was the overall vibe was demand is seeing a strong uptick. Yes.
- [08:52]
Fred Nickelhaus
You know, net revenue is up 8.1%. Demand increased 13% for the quarter. They raised their guidance a little bit for the rest of the year. These numbers weren't record breaking by any means, but they were going in the right direction. And I think that's kind of what people wanted to hear. As the resident RH critic on the podcast, Dennis, what did you make of it? What are the things on the other side of the ledger here? They took out a lot of debt a few years ago, although Gary Friedman had a clever way of reframing that on the call.
- [09:22]
Dennis Scully
Good news, that's not debt, Fred. They did a currency swap. As Gary Freeman explained, they swapped debt for equity. And so now they've got this incredibly liquid shares of their own stock. And with Gary Friedman owning 26% of the company, he has quite a bit of that stock. Truthfully, that's a highly illiquid asset because if RH were ever to announce the good news, we're selling all that stock we bought back that would drive the price down pretty dramatically. But I think if we look at the areas of concern, once again, we saw a balance sheet that is highly stretched. There's a lot of leverage and we're joking about it. But really the company has a lot of debt and they acknowledge that they also bought a lot more inventory. And if you look at the comparison from the RH currently has almost a billion dollars in inventory on their books. And that is a great big number. That is a $200 million increase from the last quarter. And Gary Friedman again acknowledged this. There was some suggestion that part of this was perhaps they're continuing to look to wrap up the manufacturing that's going on in China. And Friedman suggested that they're hoping to be out of China altogether from a production standpoint by perhaps the middle of next year.
- [10:50]
Fred Nickelhaus
No so soon.
- [10:51]
Dennis Scully
That's a huge move for them considering that just last year it was 22% of the money they were spending on inventory was going to China. So that's a very big move. Maybe they're stockpiling some product that's coming out of there. They're also clearly planning a lot of new gallery openings. So maybe this is additional inventory building up for that. The, the risk is again, that's an awful lot of inventory to be holding. And if everything doesn't go as well as hoped, that's, that's a lot that will have to be marked down. But they were very optimistic on this call for, for a host of reasons that we'll get into. Those are the things to worry about. Let's talk about the things that they clearly wanted to, to celebrate and focus on.
- [11:33]
Fred Nickelhaus
Well, I mean, I think the big Newport beach location was a big thing to focus on. One of the things I think that'll be maybe most interesting to our listeners is that they also, the same weekend I think, opened up the first freestanding interior design office in Palm Desert, California. Let's hear Gary describe what it's all about.
- [11:51]
Hatta Bing
The first RH interior design studio is opening this week in Palm Desert, California. Our goal is to establish RH as the leading interior design firm in the world as we've moved the brand from simply curating and selling product to conceptualizing and selling spaces. The Palm Desert location is a unique test of a consumer facing interior design firm, not a gallery. Our theory is by presenting RH interior design in a singular fashion with a professional interior design firm, we will attract the highest caliber interior designers and therefore the highest value consumers. We believe this might be one of the most important Strategies to elevate and distinguish the RH brand as a global design authority at the highest end of the market.
- [12:40]
Fred Nickelhaus
Yeah. So, I mean, I think what he's getting at there is this is the first time they've opened up RH interior design office in Palm Desert. It's the first time they've done it. I don't think it maybe makes the most difference for their bottom line. I don't think they're necessarily relying on this to make their next quarter, but it's the first time they've done it. It's an interesting experiment, and I. Some designers who already feel a little bit grumbly about RH kind of taking away market share from them will not love this development. I'm curious what you think, Dennis.
- [13:09]
Dennis Scully
It was interesting that the trade, once again was spoken about quite a bit. They mentioned Dimitri and they said, we've got big plans for Dimitri. And unlike what all of you might have thought that we were going to try and alter Dimitri in some way, he said, no, no, we want to keep it exactly as it is, and you're going to be seeing a lot more of it. In the same way that he was talking about seeing a lot more of Waterworks. There's a small Waterworks installation in this new interior design office, and he talked about the fact that Waterworks will soon be available on the rh.com platform. So, again, he's doing more and more to blur the line between consumer and trade and talk about the trade in a lot of new ways. As you say, all of these are experiments, but he's got an awful lot of experiments that he's investing in, and this one could be big.
- [14:01]
Fred Nickelhaus
Yeah. I mean, just to sort of like, put some. Some meat on the bones with the Dimitri thing. What they said was that they're rolling out RH custom upholstery in the, you know, in the first half of next year, which, you know, presumably is just Dimitri through the RH brand, as I imagine how it'll be rolled out. You know, so they're offering custom. Or they will be offering some version of custom upholstery. You know, as you said, one of the things he said on the call was this idea of taking trade resources and offering them to the consumer has been a disruptive play, and we will continue to do that. So, yeah, I mean, I don't know. Look, I don't think necessarily any interior designer should quit the profession simply because RH is doing more of this stuff, but I do think it does. I remember speaking to a designer in Aspen about how RHS sort of defined the market and how she had to change the way or she was thinking about changing the way she built or presented herself simply because a lot of the consumers in her region were just thinking, oh, interior design, okay, that's rh. Got it. And so she had to sort of set herself up in relation to that. So I do think all this stuff matters. It's one office in one part of the country. This is not reason to change everything for everyone. But I do think it's an interesting development. We'll definitely have to watch closely how it does and how he talks about it on future calls.
- [15:15]
Dennis Scully
No, I agree. There were so many things that, I mean, it's hard to get to everything. It was interesting to hear more talk about Europe and the excitement there. There were actually some numbers from RH England, which apparently is doing better than you and I might have thought, but.
- [15:35]
Fred Nickelhaus
That blew my mind. You said 38 million on track to 38 million this year, its second full year. And you talk to everyone who's ever been there, they're like, I was the only one there. So I'm wondering is this maybe, you know, someone came in and bought $20 million from RH England. But I mean, like, in all seriousness, maybe it is just high ticket people coming in and making, making big orders and it's paying off. And as he says, they're opening up a location in Mayfair which is obviously going to do, you know, more volume than a location in the middle of the countryside. So, you know, I'm sure a lot of investors were certainly very happy to hear that number, however they got there. They also talked about tariffs too. I thought that was, you know, you know, as you said, they're moving out of China entirely. Gary seemed to say, like, that's not going to make, not going to make a difference. This was a very optimistic call across the board and I mean, they usually are, but it was particularly optimistic.
- [16:25]
Dennis Scully
He had so many, as I say, they had so many things that he was pointing to that they were working on and developing. He's wildly optimistic about it all. London's opening next year, Paris is opening next year. Milan is opening in 2026. He's got a host of openings in the US next year. They're not slowing down for the many conversations that we've had in the past that suggest o they're so overextended, they're so over leveraged, they're going to have to slow down on some front. Gary Friedman comes back and says, oh, no, no, we're not. There is no front that I can see that they are slowing down. And again, it all works. Or if next year doesn't turn out to be a recovery in the housing market, doesn't turn out to be strong in Europe, it could be a very different story. But for right now, Wall street analysts left that call and every single one of them upgraded that stock, raised their price targets. So there's a lot of people that are willing to give him some leeway and let him prove all of this out and show that they can deliver on everything that he's talked about.
- [17:33]
Fred Nickelhaus
Yeah. And the stock, I mean, the Stock's at a 52 week high. We could really spend another 20 minutes. He teased this big brand extension for next year.
- [17:41]
Dennis Scully
That may be one grit brand extension coming up in 2025.
- [17:44]
Fred Nickelhaus
I'm going to put make a prediction and say that's RH color. The long delayed RH color, I think is finally coming in 2025. But anyway, I apologize. We got to move on.
- [17:53]
Dennis Scully
No, no, we got to move on. We talk about it all day, but we can't. But there's a lot there and there's a reason that we talk about this company the way we do. It's so fascinating to hear everything that they're experimenting with. And everyone in the industry should at least be aware of what this company is trying to do. Moving on, we're going to talk about furniture bands.
- [18:15]
Fred Nickelhaus
Thanks.
- [18:16]
Dennis Scully
In a recent feature, BOH managing editor Hayley Chouinard explored how organizations across the country help furnish the homes of families in need and how the design industry can help out. And I hope they will. Fred, this was a very moving piece on a lot of levels.
- [18:32]
Fred Nickelhaus
Yeah. A very touching feature by Haley where she talked about how furniture banks really help people who are coming out of homelessness or experiencing some kind of crisis. And I think it's such a good point is that, you know, so often there's this idea of, oh, you know, you finally escape this condition of not having a home. You get into a home, but it can be expensive to fill it, even with cheap furniture. So I think there is a great need to have resources like this. And I think who better than designers and brands in this industry to help out? Because of course, we talk all the time about how there's so much waste in the furniture industry and so much stuff ends up in the landfill. And I think that when we can do the difficult work of connecting that excess with the people who need it, that's a mission worth pulling off. And these organizations are certainly doing a great job of it. We need more of them.
- [19:25]
Dennis Scully
And as we were talking about earlier, I'm so glad that this article helped to raise awareness. And in this article, we do have some links to some various furniture banks, including the organization furniturebanks.org, where you can go and find a nearby furniture bank in your area. There's a big one here in Westchester that people can find and bring things to and support. It's something that a lot of designers might not have even realized exists and can make such a meaningful impact in people's lives. So I'm thrilled that this is being discussed.
- [20:04]
Fred Nickelhaus
Yeah. And I was really struck by one designer that Hayley talked to for the piece, Jessica Halgerson out of Portland, Oregon. She was talking about how in Portland there is this sort of extreme income inequality, where you have people in downtown Portland who are struggling with poverty and very dire circumstances, whereas she's working with the 1% of the 1%. I think a lot of interior designers struggle with a version of that and that they work with people who have extreme wealth, but they may live in a city where there is a problem with homelessness. And I think that these kinds of initiatives are a good way to get involved with something that feels relevant for the industry and makes a meaningful impact on people's lives. Jessica Helgrison has this initiative called the One Percent Project, where she asks clients if they'd like to donate 1% of the billing statement to a charity. And so I don't know. I do think that that's a perennial thing that comes up again and again in the industry, and this is a good way to sort of channel that energy.
- [21:01]
Dennis Scully
I agree. As you and I have talked about, we work and we cover such a rarefied industry, and most of the people that we're talking to are serving the top 1% of the 1%. And this is a reminder that there are a lot of people in this country that help. And this help can be very meaningful and very real, and not just at the holiday times, but all year round. We tend to talk about these things when the holidays are coming around, but this is something that we should be focused on all of the time. And Hayley's piece, I encourage everyone to check it out and read it and contribute if you can. Moving on. We're going to talk about granny bathrooms. Fred that's right.
- [21:47]
Fred Nickelhaus
Smoothly transitioned there. Dennis. Business Insider writer Dan Latou recently explored why Gen Z and millennials are gravitating toward nostalgic Bathroom design choices including pastels pattern tiles and matching sinks and toilets, wall to wall shag and an avocado bathroom. Dennis, what do you think?
- [22:07]
Dennis Scully
Well, I think the people are excited about this one. Much to my surprise, I have to say people are energized by the thought of granny bathrooms. Not a woman that I used to work for for many years, Barbara Salik at Waterworks, who I I should say that Waterworks, which was founded back in 1978 and in 1978 the, the top selling porcelain colors for, for toilets and pedestal sinks was avocado green and there was an earth tone brown. And Barbara Salick said no more. We are going to have white only. There will only be white porcelain sold at Waterworks and everyone will fall in line. And you know what? America did and America wanted white toilets and sinks, but they're getting ready for a change is the message here.
- [22:58]
Fred Nickelhaus
Were they mocha moose bathrooms at the time, Dennis? Because Pantone would like to buy those. Yeah, I don't know. This is interesting. I mean I think like at the end of the day looking at this trend, I do think it's just simply, you know, the pendulum of style swinging slowly as it tends to do. I do think we're, we've probably over indexed on all white everything and kitchens. We had Sophie Donaldson, design runner Sophie Donaldson to talk about uncommon kitchens, which is maybe not specifically around going back to the avocado green tile, but it was more about getting more color into the kitchen. And I think kitchens and bathrooms are tied together. And so I think this is a thing. I know you put a poll up on social media asking designers about it. What was the gist of the reaction? Were people pro, colorful bathroom or anti?
- [23:42]
Dennis Scully
You know, I mean people want to be set free, Fred that was the message of the responses that I got people. The funny thing was so many designers said to me, if only my clients would let me. If only I could find those daring, those fearless, those courageous clients. Yes, that was the message. Nathan Turner quickly wrote in and said, I am into it. I begin, I'm all for. I posted a picture of a green and yellow bathroom and so many people were delighted. Denise McGahey wrote in and said, I'm trying to get clients to move in this direction. I can't get them to yellow and green, but I can get them sage and some other, you know, we can start with some darker colors. But one designer friend of the show, Ann MacDonald, wrote in to me that she had just finished a project that she was photographing with a beautiful Citron pedestal sink and matching toilet. And it looked beautiful. I think the feeling was, the client has to want this. The client has to be the one driving this. And then it can happen. You can't be presenting them with this wild bathroom because they're gonna think, what are you out of your mind? Funny enough, you know who chimed in is friend of the show, Andrew Krohn, the CEO of chadduck of all people who said, no, no, I'm gonna have to pass on this whole trend, Dennis. I've got a 1960s home and I've been working feverishly to get rid of those old bathrooms. And yes, it sounds like most of Andrew's new bathrooms are going to be white, and I get it. But also, there was a connection that a lot of designers made to something that we've talked about on the show in the past, which is setting yourself free from worrying about resale. Part of this is right, you have to be willing to personalize the space in a way that a lot of people still aren't because of that resale. So maybe that's another thing that you shouldn't let hold you back. I don't know. What do you think for that's interesting?
- [25:40]
Fred Nickelhaus
I mean, I wonder if people have sort of internalized this frozen housing market and going like, oh, well, people just never buy and sell homes anymore, so I don't have to think about that. You know, it will never be possible for me to sell this home, so I'll do what I darn well please in it. And what I please is an aquamarine bathroom with a toilet seat cover with the clear plastic lid with the pennies in it. So I don't know. I do think it's possible that this frozen housing market is having some upsides and maybe colorful bathrooms are stream of that.
- [26:12]
Dennis Scully
Well, as you can hear in my voice, I'm having a lot of fun with this whole story and all the responses from people. The clear takeaway message though was this is such a teeny tiny part of the overall market. The number of designers that are really unleashing colorful bathrooms on America, it's very few. Okay, that's the disappointing news. But the good news is it's happening more and more. So that's what I want to focus on. People are finding that freedom and I want them to enjoy it and I want them to send me all their pictures. All right, that's it for the news. But there's plenty more to check out on businessofhome.com including a new AI design startup and the best debuts at Miami Art and Design Week. 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 Anthem Smart showering only from Kohler. With Anthem plus, you can design a showering escape that commands up to 12 water outlets, supports custom lighting environments to match any mood, and allows for three levels of soothing steam set to music from personal playlists. Every moment asks the user to imagine when you take a shower, where does your shower take you? Explore Anthem smart showering@kohler.com showers and now back to the show. And we're back. We're almost to the end of 2024 here. Time to look back on the year that was and maybe start to think about what 2025 has in store for us to do all that. We have a killer lineup. Warren Shohlberg, Business of Homes, retail columnist. Warren, thank you for joining us.
- [28:02]
Warren Shohlberg
Glad to be here. Dennis, thanks.
- [28:04]
Dennis Scully
So glad to have you. Kaitlyn Peterson, Business of Home's editor in chief.
- [28:08]
Kaitlyn Peterson
Caitlin hi Dennis.
- [28:09]
Dennis Scully
So glad to have you. And Fred Nicholas, Business of Home's executive editor.
- [28:14]
Fred Nickelhaus
I refuse to stop talking.
- [28:16]
Dennis Scully
He's back again. So let's jump in by doing a bit of a vibe check and summarize, in a word, if you will, what 2024 was all about. Warren, what, what have you come up with this year for us?
- [28:33]
Warren Shohlberg
So I've taken a little bit of liberty and I'm going with rock and roll, which in my world is still one word, Rock being short for rocky and roll being indicative of still rolling a little downhill.
- [28:50]
Dennis Scully
Interesting. Okay, so it's rocky and also a little bit of a negative vibe tied in. Okay. Okay. Caitlin, what about you?
- [28:58]
Kaitlyn Peterson
My word for the year was reset, I think after several years where no one really knew what to make of their year over year comps, where our industry has been so high, so low, so out of whack, this year felt a lot like hopefully finding a new baseline. So fingers crossed that one proves to be correct in hindsight.
- [29:18]
Dennis Scully
We'll see. Okay. Fred, what about you?
- [29:21]
Fred Nickelhaus
Mine, and I mean it more positively than it sounds, is rock bottom. I think 2023 was a much more confusing and I went with rock as well. Warren, 2023 was a much more confusing year. I think 2024 was just simply, okay, this is a bad time. Everyone is experiencing a lot of pain at all different parts of the market. But I also feel like most people, I think, feel like really the worst is in and next year is going to be better for real this time. So that's why I'm going with rock bottom. Dennis, what about you? What's your vibe for 2024?
- [29:55]
Dennis Scully
Yeah, I think very similar. I was thinking it's almost a feeling of resignation. There's this feeling of, yes, all this has happened. We're just resigned to it now. We're going to keep plugging ahead, and if you've made it this far, maybe 25 is going to get better, but you're a little resigned to really whatever happens. Because this year was so hard to predict. I've spoken to so many companies that just said projections were just impossible. So they're just kind of resigned and hoping for the best.
- [30:27]
Kaitlyn Peterson
We're a ray of sunshine today.
- [30:28]
Fred Nickelhaus
Exactly. Happy New Year.
- [30:30]
Dennis Scully
Nothing says holiday show like a rock rolling down the hill. Resignation. I mean, we are a jolly bunch, and it's gonna get even more rosy as we get into the big story.
- [30:44]
Warren Shohlberg
I have to go now. Thank you.
- [30:46]
Dennis Scully
Yes, exactly. Warren wants to leave already. He's just too bummed out by where the show's gone. And we're only a few minutes in. Next up, we're gonna talk about housing, and it's not gonna get any better because it was another frustrating year for real estate, with buyers and sellers locked in a stalemate. Fred, I'm wondering, can we look back and talk about how we got here?
- [31:08]
Fred Nickelhaus
A producer on the show, Caroline Burke, has lined up all these facts for us about how bad it was, and it's hard to pick one. I'm just gonna say that, you know, this year is on track to have the slowest housing market in three decades, with the projected 4 million home sales, according to the national association of Realtors. Very bad numbers. I think by now most listeners are familiar with the cause of it. I think it's interesting, like, one of the assumptions at the beginning of the year, I talked to a lot of people, was that, okay, when the Fed actually starts cutting interest rates. The fight against inflation is one. We're going to see mortgage rates go down. We're going to see the housing market open up. I'm going to, like, open up a bunch of showrooms, and business is going to be great again. None of that really happened. The Fed did cut interest rates. Rates. It didn't really have the impact on mortgages we thought it would. And people are still very stubbornly sticking in their homes. I think what this year has really taught us is that, you know, the housing market is so much more psychological than anything else. I think at this point now, everyone is just waiting for people to get used to the fact that mortgages are more expensive than they were in the sort of pre Covid era.
- [32:09]
Dennis Scully
Warren, thinking about the housing market and how it's been affecting business, anything you want to. To add there? Any perspective?
- [32:16]
Warren Shohlberg
Well, I hate to sprinkle in some good news on this cheerful session, please.
- [32:21]
Dennis Scully
We welcome that.
- [32:23]
Warren Shohlberg
I think there's an element of this that is positive for the home furnishings business, and that is that consumers are sitting on a boatload of equity in their homes. So existing homeowners, the value of those homes is really skyrocketed. And so just like in the mid-2005, 2006 range, there's a lot of money that homeowners can pull out of their homes and spend on fixing them up, particularly if they think they're going to be there for a while. So I think that's the silver lining to next year is that the remodeling, redecorating, refurbishing market, not necessarily tied in to home construction or moves, is going to be a real positive. And to me, that's where people should be looking. If I'm in this business, that's where I'm focusing my efforts, is on existing homeowners who want to do. Who want to work on their homes.
- [33:28]
Kaitlyn Peterson
I just got back from Charlotte last week, and I will say, you know, I was sitting at dinner with a couple designers, and I said, you know, oh, like, has business picked up for you guys a little bit. I kind of came in with this angle of, like, you know, the phone stopped, ring for a while, and they looked at me like I was nuts. And they said, did it slow down? I've got more renovation projects than I know what to do with. I think there is, you know, to Warren's point, there is opportunity. There is sort of a regionality to this, too. You know, there are certainly some markets where, you know, everybody is already kind of investing in redoing that home or where people are still sort of moving in.
- [34:01]
Dennis Scully
Yeah. I'm wondering if any of you sense that there's been such a dramatic pickup in asset prices. So if your money is invested in the markets, I sense a lot of people are feeling pretty optimistic from that perspective going into next year. And I wonder if that also is going to be a big push for the home industry, separate and apart from whether or not people move out of their homes in a meaningful way.
- [34:28]
Warren Shohlberg
If you're tied into the financial markets, this is a great year for Wall street and there are some real returns there. So to your point, Dennis? Absolutely, Fred.
- [34:39]
Fred Nickelhaus
I was just gonna say, like, I thought Caitlin's absolutely right. It's really regional. All real estate and home stuff is. There are some markets where people are having their best year ever. And it's also, it depends on where you are, like, in the sort of various tiers of the market. Like, the very high end is basically always gonna be okay. You know, it's fine. And so a lot of what we're talking about is kind of like the layer underneath that to some degree. I also just wanna sprinkle in, like, a little bit more optimism here, too, to add onto Warren's little drips and drops of that, which is that I think people underestimated how big of a deal the election was gonna be. I heard so many people just saying, like, I'm just gonna wait to make any kind of move on anything until after that's over. How many days of rioting will we have? You know, there was a lot of very gallows humor, darkness around that. And I think that now that it's over, no matter how you feel about the result, there's a sense of like, okay, onto the next. And I think that will unlock things in all areas of business, including the housing market.
- [35:31]
Kaitlyn Peterson
Well, in terms of just designers that I talked to who did say that the phone had stopped ringing, who really did shape my perspective on, you know, where business had slowed down, a good chunk of them said that, you know, by mid November, the phone was ringing again. You know, it's starting to pick up again. I think Fred's right to his point. You know, it was really a wait and see game. And I think people are feeling good and ready to spend some money on their house again.
- [35:54]
Fred Nickelhaus
There we go.
- [35:54]
Kaitlyn Peterson
Well, see, when all of us touched down in high points this October, did you immediately get sort of barraged with political advertising? If you just think about how that makes you freeze for a moment, no matter what your opinions are on kind of those incoming text messages, TV ads, billboards, all of it. I think there is sort of a paralysis around a lot of that messaging that just tells you the world's uncertain, we don't know how it's going to fall apart. And you can kind of get to the end of that messaging and say, okay, I have an answer. The coast is clear. I'm good to move forward.
- [36:24]
Dennis Scully
Well, and that's such a great point too, Caitlin, because to your point, so much of that advertising is so negative and the world is falling apart and this guy's horrible, and it's just, in.
- [36:32]
Kaitlyn Peterson
My world, on either side.
- [36:33]
Dennis Scully
Exactly. So, I mean, I think just the fact that all of that has gone off of our phones and our TV screens is an enormous ruinous.
- [36:41]
Kaitlyn Peterson
Now we're getting Christmas shopping ads. How lovely.
- [36:44]
Fred Nickelhaus
I personally miss getting texts from Kamala Harris every day. I don't know about you guys.
- [36:49]
Dennis Scully
Well, I'm sure she's still thinking of you, Fred.
- [36:52]
Warren Shohlberg
And let's not underestimate the value of revenge spending. I think people who are on the losing side are saying, the hell with this. I'm going to go out and make myself feel good and buy a new credenza. So that's a piece of it, which.
- [37:09]
Dennis Scully
Is always a winning formula. I find you need to pick me up. Buy a new credenza. Absolutely. That's a winner. I'm going to move on a little bit warm, but come back to you and talk about home retailers and some of the struggles that they've had. A number of bankruptcies, shutdowns, cost cutting measures hit the industry this year, making it clear that it was a challenging time for home retailers. Let's talk about some of them, Warren.
- [37:35]
Warren Shohlberg
Well, I think this was a year where anybody who ran a home furnishings retailing business said, gee, I wish I'd listened to my mother and become a dentist, because there were a lot of casualties this year. You know, you think about Cons and Badcock and American Freight. I mean, those guys are gone. Big Lots is going from 1800 stores to a thousand stores. Ll flooring is going to go from 400 to 200 and go back to the charming name of Lumber Liquidators.
- [38:10]
Dennis Scully
Lumber Liquidators, yeah.
- [38:12]
Warren Shohlberg
Yes.
- [38:13]
Dennis Scully
Emphasis on the liquidating, I'm saying.
- [38:14]
Warren Shohlberg
Yes. And. And there's a bunch of other guys, smaller regional guys, Oka, the British guys who came in here, and I never figured out if they were oka or oka, I think.
- [38:28]
Dennis Scully
Yeah.
- [38:29]
Warren Shohlberg
And whatever it was, it wasn't okay. That's for sure. So they're gone. A lot of casualties this year. I think the best thing we can say about 25 is that most of the teetering businesses have already teetered, and I think we'll see less of it in 25 than we saw in 24, hopefully.
- [38:53]
Dennis Scully
So, Fred, anything you want to add in there?
- [38:56]
Fred Nickelhaus
Well, I mean, I think it's interesting because Warren was talking about a lot of the big chains, but you also saw this kind of slow drip, drip, drip, death of these real longstanding mom and pop furniture stores. I wrote an article about it in the spring. I'm talking about the stores that's been there for 92 years and is 5,000 square foot showroom and has a lot of High Point brands. A lot of those kinds of stores are just going away. It's either because the next generation doesn't want to take over or they don't have enough margins to, you know, launch an influencer campaign or whatever it is. That's an increasingly tough business. And I think like that model just is sort of disappearing and it's changing the industry because a lot of the people who supply those kinds of stores are thinking, well, who am I going to sell to next? Like retails and such flux, I need to go to designers. How do I do that? So I do think this is, as Warren was saying, a year that bad economic times caught up with a lot of names, both big and small. And on the supplier side, it changes the equation for a lot of these big companies that show at High Point.
- [39:51]
Dennis Scully
No, I agree. And I'm curious, Warren, to get your thoughts. We were talking on an earlier show about whether, because we've been talking about so many of these big retailers going away and for many of these High Point companies and other companies that sell to some of those big locations, is this going to move them to launch a meaningful E Commerce presence in some way or have to look at other channels to replace that? Even when we talk about High Point and so many designers versus the traditional retailers, what do you think comes out of that change, Warren?
- [40:25]
Warren Shohlberg
Well, any business, whether it's a supplier or retailer that's not selling online direct to consumer is out of their minds. I mean, why would they want to walk away from easily 15%, but as much as 20% of the business out there, anybody that's doing this, you know, when I talked to one guy who said, you know, we struggle with our online business so we're not doing it and they're crazy because you gotta do this. You know, it's the way it goes. So I'm not sure I'm answering your question, Dennis, but.
- [41:01]
Dennis Scully
Well, no, I mean, I remember you got so heated, I believe it was when HomeGoods announced that that they were coming off of E Commerce and you just thought that was ridiculous. I'm just so curious if finally so many of these companies that have been reluctant for various reasons to really invest in E Commerce in a meaningful way are just going to be forced to because the shift of the retail landscape is so dramatic that they have to.
- [41:24]
Kaitlyn Peterson
Do something, I think, kind of separate from sort of the traditional furniture category. I know we had two other big failures this year that we talked a lot about at Business of Home. We said goodbye to Banana Republic Home. We barely knew it. You know, Perch also kind of catastrophically collapsed on itself at the beginning of the year. You know, I think it's interesting to see sort of outside of the very traditional furniture retailing category. You know, there were challenges in those corners of the business for very different reasons as well.
- [41:53]
Dennis Scully
Yeah, no, and I think you. You spoke pretty. Pretty sharply about Banana Republic Home when it first came out. Caitlin. I don't. I don't think they blame you in any way, but it was.
- [42:02]
Kaitlyn Peterson
We didn't air a lot of that.
- [42:03]
Dennis Scully
Remember, you were quite opinionated about it, and you were. You made the right call. But, yeah, it just was. The timing wasn't right and. Right. I mean.
- [42:12]
Kaitlyn Peterson
I mean, I think the timing wasn't right. I do also think there aren't that many great examples of brands that have moved from the fashion category into the furniture category in the way that they were trying to do. You know, as much as I think this industry loves to look to fashion as sort of a guidepost or for inspiration. And I think this was a really good example to say, like, yes, the timing wasn't right, but also, maybe that's not the right play and that you have to build a furnishings brand, a home brand, and not piggyback it on top of your ready to wear line.
- [42:43]
Dennis Scully
Well, it's a tough transition to make from fashion to home, and I think everyone thinks it looks easy, but it looks easy.
- [42:50]
Kaitlyn Peterson
I think this. I hope that this can be used as a case study for, like, this isn't the slam dunk that it looks like. Maybe on paper.
- [42:57]
Dennis Scully
Another big issue this year was consolidation. So in the home industry, there were a bunch of activities, acquisitions, including some that we didn't see coming, some we had a sense were going to happen. But I feel like the news from Thibaut acquiring Rosemary Hallgarten and some others. Fred, what stuck out to you as some of the big consolidation stories this past year?
- [43:22]
Fred Nickelhaus
I think there were two different ways that people were consolidating this year. One of them was just simply brands that were really struggling got bought by Havenly. That was more or less like category one, a big through line of the story. I mean, Havenly this year alone acquired citizenry, St. Frank and Borough. I mean, it feels like it's more than that because they've been doing this a lot over the past few years. So that. That in itself was kind of a major story. And I think that's kind of like Downstream of all the struggles that the industry has been having is, you know, when you're. When you're kicking to get by, when you're kind of on the edge of, can we make another five years? Suddenly selling makes a lot more sense. And Havenly, Lee Mayer, the CEO there, has put together a model that allows her to finance these deals in creative ways. And she's putting together quite a sizable company. And I do think that if anyone was doubting her ability to put something together, this year was, I think, the year that they were proved wrong. Now, you may disagree with her strategy in the long term or feel a certain kind of way about E Design in general, but there's no doubt that she's making moves and putting something real to. What do you guys think?
- [44:26]
Dennis Scully
Yeah, no question. I mean, it was, as you say, I thought it was even more deals than that because I just felt like we were talking about it throughout the year. And I don't know, we'll have to reach out to her to see if there's maybe one more that she wants to get in under The Wire in 2024. But it was interesting how many people we spoke to, whether it was Satya Tiwari, we spoke to him about Mitchell Gold, who mentioned he had looked at any number of other deals, and it was clear that whether it was the Stumps or others who had lots of deals to offer and to talk about, people who had any kind of meaningful money to spend on acquisitions, were looking at a lot of deals. There was a lot out there, many of which didn't end up working out for one reason or another. But what were you going to say, Caitlin?
- [45:16]
Kaitlyn Peterson
I think one of the interesting things, too. Havenly bought three things this year. But when you talk to Lee about the volume of opportunities crossing her deck, I think that's also pretty telling, you know, to Fred's point that, you know, there are all these brands sort of looking for an exit, looking for a cash infusion. You know, the number of people who were, you know, getting pitched or pitching themselves to Havenly to say, like, pick me, pick me. Really, it really tells you, you know, about where we are and also about, you know, all of these to generalize, you know, D2C brands that are, like, kind of coming to a certain age that are doing fine or doing middlingly. Okay. And that. That are maybe beloved, have great product, you know, could have all these incredible points and just haven't quite gotten the traction they need to fly solo for the future. I think it's shocking. I think it's interesting, and I do think that's actually going to continue to shake out in the year to come. That specific category of brands that sort of flounder or find a new home.
- [46:10]
Dennis Scully
When we look at perhaps the biggest deal that we wrote about this year, which just happened recently, was here we were talking about Kravit acquiring Caroline Cecil and talking about. About them wanting to roll up some boutique brands, and then suddenly they end up being acquired themselves by Dunes Point Capital and taking a majority stake there, certainly with the speculation that perhaps more deals could come from that. What do you think, Caitlin, taking a.
- [46:39]
Kaitlyn Peterson
Couple of steps back? I think one of the most interesting things about that deal is what it says about what it takes to succeed as a trade brand in today's marketplace. If a brand like Kravit that is, Is stable, that seems just healthy and has a solid foundation, is looking for this kind of acquisition to achieve some of that operational improvement, technological improvement, to move the needle a little bit in terms of meaningful growth, I think that says a lot about the kind of capital that you need to be successful in the current marketplace. I think that tells us more deals like this are coming, more acquisitions like this are coming. And maybe, you know, that, like, slow and steady movement that a lot of trade brands have really typically relied on to just kind of like, improve a little bit year over year maybe doesn't cut it anymore. That is very much a hypothesis. That is just a guess. But I do. But I do think, you know.
- [47:30]
Fred Nickelhaus
No, I think that's absolutely right.
- [47:32]
Kaitlyn Peterson
I think that's. There's so many of the things that these brands are struggling with, too, are just expensive problems. A lot of the tech stuff, the logistical stuff, like barcoding every single thing you own and knowing where it is at any time, moving through a factory floor, all of this stuff that is hundreds of thousands, maybe millions of dollars, an agonizing amount of time and energy and effort. One, it requires a lot of cash, but it also maybe requires some operational expertise that you can kind of let go a little bit and really focus on your core area of expertise. And I can see that being really appealing to some of the industry brands of a certain size.
- [48:08]
Dennis Scully
Yeah, no, no, I think that's such a great point. And whether you believe that it's a combination of. Of the estate planning and the family planning, the Kravit family, I mean, no doubt that was an important component. I mean, I've often thought just about the possibilities with so many of the acquisitions that they've already made. Be it Dongia or Brunchwig or some of these brands that if they really had not unlimited resources but a significant infusion, what could be done to bring those brands to life and so maximize the value of what they already have already, already. And then again, if they're looking to make more acquisitions in the future to have that strong footing.
- [48:48]
Warren Shohlberg
And never underestimate the greed of private equity firms that.
- [48:53]
Dennis Scully
Well, I know you're a fan, Warren. I know you're part time private equity spokesperson. Fred, did you have some thoughts?
- [49:01]
Fred Nickelhaus
Well, I just wanted to second what Caitlin said and say that I'm sure a lot of these trade brands are looking at, I'm going to say at RH and going like, okay, they just had a party for a 90,000 square foot showroom where like all these celebrities showed up. And you know, how can, how can we compete with that without outside capital coming in? I also think that a lot of the brands are looking at like, well, next year might be sort of turbulent with tariffs. If you do any importing, it takes a lot of capital to kind of roll with the changes that that may require in your business. So I do think a lot of people are going to look at the Kravit deal, whatever the motivation was, and go like, okay, we need to do that. And I guess my question for you guys is how is that going to change things for designers? If there's a lot of consensus consolidation in the trade, like, what does that mean on the individual firm level, do you guys think?
- [49:42]
Kaitlyn Peterson
I mean, I think at an existential level, you know, to continue bashing private equity, you know, you saw so many design firms get burned by the intrusion of private equity into companies in the last year, year and a half. And you know, when you're on, you know, like designer Facebook groups or talking to designers about where they source and shop, a lot of people are actually saying like, oh, we need a list of companies that are private equity backed and we're not going to shop there. And I think that's sort of a miss because there are a lot of very stable, healthy private equity.
- [50:07]
Dennis Scully
Good luck with that.
- [50:08]
Kaitlyn Peterson
Companies. No, I mean, I'm not saying that that' good idea. But I'm saying that that sentiment is there. And I think Kravit was very careful to say, like, hey, the same people who ran this business and that you ordered from yesterday are still here and are still going to be here. I mean, that was a very important piece, I think of their messaging to say, this is still a family run company. And I Do think that, you know, if we see that sort of private equity roll up that Fred is predicting, hypothesizing, you know, we both are.
- [50:37]
Fred Nickelhaus
Why am I alone on this now?
- [50:39]
Kaitlyn Peterson
I don't know. I just. You can take that. No, but I think if we do see that, I think one of the things brands will have to be very careful about is how they talk about what that means for their day to day operations and really sort of make sure that the fear component of this bank might pull the rug out from under us tomorrow and you'll be in the lurch. Isn't actually what's about to happen in their business.
- [51:01]
Warren Shohlberg
And you do have to make a distinction between good, healthy companies like Kravet that have been bought and some of the more distressed fire sale guys. And I'll be delicate and not mention any names that were, you know, basket cases that were picked up on the. On the bargain bin. So there is a difference. And I think the trade needs to recognize that and understand that there are good deals and there are bad deals, but there are good deals.
- [51:33]
Dennis Scully
One of the things we talked about a lot this past year was the dupes. The debate over design copycats hit the mainstream this year in part due to a new price comparison platform that we've talked about quite a bit on the show, but also thanks to a lawsuit involving a certain A Lister. Can we talk about Kim Kardashian, anyone?
- [51:55]
Fred Nickelhaus
Warren, what's your take?
- [51:56]
Warren Shohlberg
Not if I'm here, please.
- [51:58]
Dennis Scully
I know this gets you anxious. Warren.
- [52:01]
Fred Nickelhaus
Chief Kardashian correspondent, Warren Spohlberg. Yes. Yes. Yeah, I mean, I think dupes were kind of in the air this year both for this lawsuit involving Kim Kardashian who was accused of knocking off a Donald Judd table, and because of the launch of dupe.com, as we've been talking about. I actually think a lot of this dupe talk is kind of downstream of just the industry struggles in general. I think people have not been spending as much on their home, and when they are spending, they want the absolute lowest price. I think that the rise for the desire of dupes is sort of of a coming together of like the rise of design culture. People want this stuff, but they're more motivated to get it at a lower price than ever before. So I think dupes are a big part of the design conversation right now. And I don't see that changing in 2025.
- [52:45]
Warren Shohlberg
Yeah, I'm just shocked that people are knocking each other off. This is unprecedented. Never happened before.
- [52:54]
Kaitlyn Peterson
I had a really interesting Conversation with a couple industry experts. Experts a couple days ago. It was sponsored in part by Be Original Americas. And we were talking about, you know, dupes and how you protect originality, but also what role businesses have in combating dupes in terms of making sure good design is at every price point in the marketplace or, you know, designing product and then messaging it differently to really create that resonance, that connection. John Edelman at Heller made a really interesting point that you could. You could argue that, you know, sustainability is one of the most important things to a lot of these shoppers who are buying dupes. You know, Gen Z really cares about the planet, really seems interested in dupe.com and he said, you know, these are people who won't use a plastic water bottle, but they'll buy a knockoff light. How do we talk about sustainability and longevity in the same sentence and really create a culture that taps into what some of these young people care about? Kind of separate from Pricepoint. Adam Rolston, the amazing architect, was there, and he was talking about putting up kind of guardrails in his studio practically to prevent dupes, and how hard it is sort of even internally, to safeguard against accidentally not using an original design. And I just thought that his take on sort of the personal responsibility of saying, no, we've committed to this. This is important to us, but at every step of our design process, there has to be really a safeguard to make sure we understand where this idea came from and why. That felt really powerful to me as sort of an industry takeaway separate from, like, TikTok outrage.
- [54:27]
Fred Nickelhaus
Yeah, I agree, Caitlin, but I do think that, like, TikTok outrage actually can help. I think Kim Kardashian, the Donald Judd thing, like, as silly as it was in a lot of ways, it kind of drew people's attention to it. And I think that, like, it's really tough with stuff like dupes, because, first of all, it's difficult to even define what it is. In some cases, you have a piece that's sort of like an homage. In other cases, it's a very explicit copy. So that's difficult. I think the only thing that really solves it is, like, a cultural shift towards people really understanding what an original piece of design is. And that takes time. It honestly does take celebrities. I know we shouldn't rely on Kim Kardashian to save the design industry, but I do think even the fact that she was interested in having an original Donald Judd, even if it wasn't, is sort of an interesting point. And so I think this is Sort of a slow change that will rise and fall with cultural tides and is not something that can be fixed overnight. But I do think that dupes are here for the time being and they will come up again in the near future.
- [55:23]
Dennis Scully
Next up, let's talk about some changes in the media in 2024. There were several shakeups in the design media world with some new owners and new leaders. And starting off with Jill Cohen joining Lux in early January, that was a surprise announcement. Yes.
- [55:40]
Fred Nickelhaus
Well, I mean, I think Jill Cohen, beloved book design editor, is a good fit. I think that this was maybe a little bit of just Pamela Jacqueno, the former editor in chief of Lynn Lux and having been in the role for a long time and, you know, maybe it was more about that than any, like, broader media trend. And I'm, you know, certainly excited to see what Jill's changes look like as they roll out over the next year. But, you know, I do think, like, just more broadly, this is a time of change and transition and maybe some Rock and Rollinss in design media as much as it is in the broader design industry. I don't feel like there were that many media stories that felt like, oh, my gosh, this is great. This is really doing wonderful and we're going gangbusters right now. So I think people are looking for changes, looking to shake things up a little bit in the media. And I don't know that that was the specific reason behind this move, but I think it's part and parcel of a lot of things that went on in the design media in general.
- [56:34]
Kaitlyn Peterson
A lot of the shelter magazines, for better or worse, really shifted their strategy to adapt to digital. And with a lot of the changes that have happened on the Internet, Internet, especially with Google in the last year, nobody was really rewarded for going all in the way that they did. That means changes in the year. That means that we are seeing layoffs at Conde nastenhearst. We're seeing kind of a changing of the guard. I think strategies are going to have to start to change. Budgets are still getting smaller. I'm looking for a bright spot and.
- [57:05]
Fred Nickelhaus
Okay, here I got a bright spot.
- [57:07]
Kaitlyn Peterson
If you want to, if I can talk about. There's an opportunity in that, certainly. But I don't think it's quite obvious yet what it is.
- [57:13]
Fred Nickelhaus
Yeah, I mean, I think for me, my one bright spot is stuff like Substack. And I know I consistently talk about Substack every week on the Thursday show, but I do think it's a cool example of how while traditional Media is suffering. That creates room for new voices to pop up. Technology like substack allows you to spin up a newsletter or build an audience and monetize it very quickly. And Kelly Wearstler joined some substack just a few weeks ago. So I think that is an area that actually is showing some movement and positivity. And I do think that there's nothing great happening in traditional media, but an independent do it yourself, kick up your own fuss media. I think there is actual movement.
- [57:53]
Kaitlyn Peterson
I think that's a great point. I also think actually you're exactly right. Elizabeth Rawls purchasing Atlanta Homes and Lifestyles and starting her own media company is another great example of how. How, you know, being independent, having a connection to your audience, and really focusing your efforts on a smaller group of people that you are deeply connected to. I think that in a lot of ways is substack ricocheting back its influence into traditional media. I think that's a really exciting opportunity. I think that's a spot to watch as well.
- [58:22]
Dennis Scully
As we wrap up the show, it's time to talk about predictions, what we think might happen in 2025, what we might be talking about in the new year. Caitlin, do you wanna kick us off big picture?
- [58:33]
Kaitlyn Peterson
We'll see kind of continued highs and lows. You know, I think a lot of the market forces that we're talking about that have been disruptive this year don't stop just because we're counting down, dropping a ball and starting a new year. I think a lot of this really does continue. I think the other biggest thing to keep an eye on is the new political climate. You know, a lot of the predictions or pronouncements that are coming out of the early days of the Trump administration have a lot of influence impacts on the furniture industry, whether it's immigration or tariffs, and just how we make the parts pieces and actual items and then transport them and sell them in this industry. You know, I think all of that is up for some potentially seismic changes. So I think that's going to be one of the biggest things to watch this year, and just how those changes start to make their way through the different sectors of the home furnishings category.
- [59:23]
Dennis Scully
Interesting. Okay, Warren, what do you think?
- [59:25]
Warren Shohlberg
Well, there's a saying that I don't really know who said it, but I'm going to take credit for it because I don't see anybody else who said it.
- [59:33]
Dennis Scully
Why not?
- [59:34]
Warren Shohlberg
Which is that the worst is over, but the best has long since come and gone. And So I think 25 is going to be better than 24 on a whole lot of levels. But anybody thinking that this is a return to boom times is just being incredibly unrealistic. Think back before the pandemic and there were people very happy with tiny little bursts of growth. And so manage your expectations in 25 and I think you'll be okay.
- [60:06]
Dennis Scully
I was having that conversation with someone just last night, Warren, who said you got to let go of those Covid years never coming back and stop trying to get back to that level of growth. So I think there's a lot of people who feel the same way. Fred, what about you?
- [60:19]
Fred Nickelhaus
Caitlin? I gotta say I agree with you that, like, political stuff is going to be big, but I am not going to make any predictions on what happens because I feel like in the last three weeks alone the amounts of tariffs and where they're coming from has changed already. But yeah, okay, my prediction is that everyone on this call right now is going to have a substack in six months. So that's one way to bring it back in. But my real prediction, and I'm definitely going to be eating crow in a year, is that how's this going to go public next year? I really, but I sincerely.
- [60:46]
Kaitlyn Peterson
He's at it again.
- [60:47]
Fred Nickelhaus
Wall street has definitely been booming. I think there's a lot of enthusiasm around all the, if nothing else, the markets, financials are going to go really well. I think that's going to fund or fuel a lot of enthusiasm for IPOs next year. And I think Houzz has been holding on as long as it can. I think Serena Lilly has been holding on. I think these companies are going to start to go public next year and we'll see if I'm right. But that's my, my bold, bold prediction. Dennis, what about you?
- [61:11]
Dennis Scully
So I'm also going to go out on a limb here, Fred, because I do think there's been a lot of, of optimism in the financial markets. And I think one of the things we're going to be talking about a lot more and probably writing about is bitcoin. The number of people who are joining the administration who are very pro bitcoin, who are large holders of bitcoin. There's already so much news coming out about a lot of the home builders are getting more and more people who are showing up with a bunch of bitcoin and they want to buy a house. So I think bitcoin is going to play a major role in some of the euphoria and excitement. It's up more than 140% this year and hitting new highs on the regular. So I think that's going to be a big story in the coming year.
- [61:55]
Fred Nickelhaus
Does that mean we have to pretend we know what NFTs are now again? I did that for a whole year.
- [62:00]
Dennis Scully
Dennis.
- [62:01]
Fred Nickelhaus
Can't go back.
- [62:02]
Dennis Scully
Well, I mean, I don't know if we even need them anymore. And I don't know if all the conversation was always about the blockchain, but I think this is going to. I think this is gonna be meaningful this time around. And I do think there's a lot of money that's been made, so it's gonna show up in a meaningful way. Well, it's been wonderful to spend time with all of you. I think we ended up on a little bit more of an upbeat note than we began, so that's a good sign. And maybe that's a hopeful sign for 2025, but I wish you all a wonderful holiday if I don't see you before then. And I thank you so much for joining us.
- [62:32]
Kaitlyn Peterson
Thank you, Dennis.
- [62:33]
Warren Shohlberg
Thanks. Joy to the world.
- [62:35]
Fred Nickelhaus
Thanks, Dennis.
- [62:37]
Dennis Scully
It was a pleasure.
- [62:38]
Kaitlyn Peterson
Happy holiday. Holidays.
- [62:45]
Dennis Scully
And we're back. We're getting to the end of the show here, but before we go, we'd like to take a second to highlight anything going on in the industry that might have caught our eye. Fred, I know what you're gonna talk about.
- [62:55]
Fred Nickelhaus
Go for it. Well, listeners will have just heard me talk about Substack on our end of year, end of year recap with fellow BoH editors. I'm gonna talk about Substance Stack one more time because this week two very important people joined the newsletter. Platform economist Paul Krugman and interior designer Stephanie Sabi. And guess which one of them I'm following? Stephanie Sabi.
- [63:18]
Dennis Scully
And they have so much in common, those two, I find. Don't you? I love watching Paul's videos from the Insider car all the time. Yeah, it's a great one.
- [63:25]
Fred Nickelhaus
Well, both of them are not afraid to speak their mind, so I think substack is a perfect platform for them. I'm already loving stuff Stephanie's newsletters. I recommend subscribing. It's just. I don't know, I'm just really encouraged to see a lot of designers popping up. Who knows if it'll last? But I just, I think it's a great place to read about design. So I'm certainly reading there. And check out Stephanie and all the other designers who I'm, I'm sure will be joining in the not too distant future once they find out Paul's on there. Dennis, what caught your eye this week?
- [63:52]
Dennis Scully
Well, I think it's wonderful the way you've been encouraging everyone to, as Stephanie point pointed out, perhaps use a very different muscle, which is that writing muscle that, that I think we're going to get to hear from perhaps a lot of people in the design community in a very different way. So I am looking forward to that in 2025. I'm looking forward to so much in 2025. But I wanted to take a moment because as you said at the top of the show, this is our last show of the year, Fred, and.
- [64:22]
Kaitlyn Peterson
Getting.
- [64:22]
Dennis Scully
A little, getting a little emotional here, but no, I really did. All joking aside, it is our last show and I wanted to just take a moment to thank everyone for, for listening. I wanted to thank everyone for, for writing in and, and sharing and, and for the kind reviews. I know you always like to drop the subtle hint of, oh, yes, reviews on Apple podcasts. We should encourage people to do that. So I, I thank people who have done that and those that haven't. Hey, there's still time before the year is over. But, but really it's, it's made it so fun this year to get to hear from so many people. Fred and I got to meet so many of you at High Point, and we loved that. We hope we'll get to do more of that. But, but really a great big thank you to this community for, for all that you have shared with us in the past year. All right, that's all the time we have today. Thanks so much for listening. If you want to keep up with the latest, latest news, browse job listings or take a workshop, visit us online@businessofhome.com if you want to get in touch with the show, write to us@podcastusinessofhome.com this episode was produced by Fred Nicholaus and Caroline Burke and edited by Fraser McCullough. I'm Dennis Scully. Have a great weekend and we'll be back with you on Monday.