Business of Home Podcast Summary Episode: The Thursday Show: What Makes for a Good Trade Program? Plus: The Mood in Home Retail
Release Date: February 13, 2025
Host: Dennis Scully
Guest: Fred Niklas (Executive Editor, Business of Home) & Warren Shohlberg (Retail Columnist, Business of Home)

1. Introduction & Community Highlights

The episode kicks off with Dennis Scully engaging in a light-hearted conversation with Fred Niklas about the recent Super Bowl. Despite neither being avid football fans, Dennis notes a surprising level of engagement among designers in rooting for various teams. This camaraderie highlights a sense of community within the interior design industry, as Dennis remarks:

"It's a moment where so many people are coming together and experiencing the same thing. [...] Quite a few people seem to be actually much more excited about it than I thought they would be." (01:12)

They also briefly touch upon a previous episode featuring Benjamin Noriega Ortiz, emphasizing his candid insights on the design industry.

2. Industry News

a. Floss BNB Italia Group's Potential Sale

Fred Niklas delves into recent developments surrounding the Floss BNB Italia Group, a significant player in the European design brand conglomerate. The sudden resignation of CEO Danielle Lalonde has sparked rumors about the group's possible sale of its furniture division. Fred explains:

"The group is entertaining offers to sell off its furniture division. [...] This was totally a surprise when Danielle Lalonde suddenly stepped down." (06:42)

Dennis concurs, suggesting that the move aligns with expectations following leadership changes and the typical exit strategies of private equity investments. They discuss potential bidders like Haworth Group and the implications for the luxury home retail market, particularly highlighting RH (formerly Restoration Hardware) as a potential indirect beneficiary.

"It's possible they won't unroll all these companies or it's possible that BNB Italia will end up being stronger on its own [...] a tacit admission that putting all these brains together maybe hasn't worked quite as well to unseat RH from its perch." (11:27)

b. Tariffs and Trade Policies

The conversation shifts to the impact of tariffs on the design and furniture industries. Fred breaks down the complexities of the de minimis exemption and its recent challenges under the Trump administration.

"The de minimis exemption is something that has been baked into US Trade law for a long time, [...] it's been in place because there's so many hundreds of thousands of packages coming in." (14:55)

Dennis highlights the evolving nature of these policies and their potential repercussions on pricing and supply chains:

"If there's a 25% tax on all imported steel, [...] it's hard to imagine they will not have to pass along those additional costs, and that seems to defeat what all of this is about." (20:15)

They collectively express concerns over the uncertainty these tariffs introduce, which can be more disruptive than the tariffs themselves.

3. What Makes for a Good Trade Program

Transitioning to the core topic, Fred and Dennis discuss insights from Fred's feature article where he and Aidan Taylor consulted with over a dozen designers about effective trade programs. Key takeaways include:

• Reduced Order Minimums: Designers appreciate lower or no minimum order requirements, making it easier to collaborate without hefty financial commitments.

  "The minimums were going down like it wasn't quite as high as they used to be." (25:25)

• Price Protection: Maintaining consistent pricing to preserve the trust between designers and their clients is paramount. Discrepancies can undermine designer-client relationships.

  "If you can't offer a great margin, then why shop with you?" (28:49)

• Service Excellence: Outstanding after-sales service, including handling defects and issues promptly, is the top deal-breaker for designers when evaluating trade programs.

  "Brands not delivering good after-sales service was just over and over again the most frustrating thing that designers talked about." (32:15)

Dennis adds that proactive engagement and support from brands can significantly enhance designer loyalty, even if immediate solutions like free replacements aren’t always feasible.

4. Micro Trends with Staying Power

Fred and Dennis explore the longevity of current micro trends in interior design, scrutinizing their roots and true impact beyond fleeting social media popularity.

• Color Drenching & Biophilic Design: These trends have historical precedence and resonate deeply with designers for their timeless appeal.

  "The vintage Renaissance color drenching and the whole biophilic [...] seem to be the ones with staying power." (35:45)

• Impact of TikTok: While TikTok popularizes these trends, Fred suggests that the platform primarily boosts engagement rather than creating entirely new design movements.

  "These micro trends are really fun and funny, and I will always talk about them on the Thursday show. But I think what this article really exemplified to me is really how much they are simply a product of our weird broken attention economy more than they are of anything." (37:26)

Dennis acknowledges the role of TikTok in reviving classic design elements, fostering both nostalgia and educational value within the community.

"TikTok has been a really fun way of packaging these and showing these and honestly making it fun." (37:54)

5. The Mood in Home Retail

Guest: Warren Shohlberg

Warren Shohlberg joins the discussion to provide an external perspective on recent retail shows and the overall mood in the home retail sector.

a. Retail Show Highlights

Warren shares observations from various trade shows in Atlanta, Dallas, Las Vegas, and New York:

• Atlanta & Dallas: Strong attendance indicative of a cautiously optimistic industry sentiment. Noteworthy was Mitchell Gold and Bob Williams'复 appearance, signaling strategic shifts under new ownership.

  "Mitchell was there fronting the display [...] they're going to be doing is selling to designers." (43:27)

• New York Shows: Shop Object Show has expanded significantly at its new location, whereas the traditional New York show has downsized, reflecting shifting regional dynamics.

  "Atlanta pulled away a lot of the big national brands that used to show in New York. So New York is now a regional market, and it's probably going to stay that way." (45:18)

b. Store Closures and Market Challenges

Warren discusses the ongoing trend of store closures, emphasizing that while many closures involve underperforming retailers, there remains a glimmer of hope tied to the housing market.

"75 to 85% of all the wooden furniture sold in the United States is not made here anymore." (54:57)

Dennis and Warren concur that the housing market remains the critical driver for the furniture industry. With housing starts at their lowest in decades, the lack of new homeowners directly impacts furniture sales.

"People buy furniture when they move into a new house [...] neither one of those things is happening." (48:50)

Warren also highlights the importance of targeting renters, who represent a significant portion of the market, especially in urban areas where mobility is higher.

"The home furnishings industry needs to target renters more so than homeowners." (60:03)

6. Industry Highlights & Upcoming Events

a. Leadership Changes at Anmore

Fred Niklas brings attention to recent executive shifts at Anmore, a key player in the design industry. The transition of Dorothy Belshaw from President to an advisory role under new CEO John Perchick suggests strategic realignments.

"Dorothy is very beloved [...] the new CEO appears to be remaking Anmore in his own image." (61:55)

b. Community and Charity Initiatives

Dennis announces his participation as a moderator for the "Love of Home" fundraiser, a collaborative effort by major showrooms to support fire relief in LA. This event underscores the industry's commitment to community support and resilience in the face of natural disasters.

"All these companies that are making this possible really wanted the community to be able to come together and I'm so glad that they asked me to come and participate." (64:07)

Conclusion

Dennis wraps up the episode by encouraging listeners to stay engaged with ongoing industry developments and upcoming events. He highlights the importance of adaptability and community support as the interior design and home retail sectors navigate through economic uncertainties and evolving market demands.

"We're going to keep talking about what's going on in LA, because rebuilding both Altadena and the Palace Stage is going to involve a lot of interesting pushes and pulls." (66:07)

Listeners are invited to stay connected through the Business of Home website for the latest news, job listings, and workshops.

Notable Quotes with Timestamps:

• Dennis Scully (01:12): "It's a moment where so many people are coming together and experiencing the same thing."

• Fred Niklas (06:42): "The group is entertaining offers to sell off its furniture division."

• Fred Niklas (14:55): "The de minimis exemption is something that has been baked into US Trade law for a long time."

• Dennis Scully (20:15): "If there's a 25% tax on all imported steel, [...] it seems to defeat what all of this is about."

• Warren Shohlberg (25:25): "The minimums were going down like it wasn't quite as high as they used to be."

• Warren Shohlberg (32:15): "Brands not delivering good after-sales service was just over and over again the most frustrating thing that designers talked about."

• Fred Niklas (35:45): "The vintage Renaissance color drenching and the whole biophilic [...] seem to be the ones with staying power."

• Dennis Scully (37:54): "TikTok has been a really fun way of packaging these and showing these and honestly making it fun."

• Warren Shohlberg (43:27): "Mitchell was there fronting the display [...] they're going to be doing is selling to designers."

• Warren Shohlberg (54:57): "75 to 85% of all the wooden furniture sold in the United States is not made here anymore."

• Warren Shohlberg (60:03): "The home furnishings industry needs to target renters more so than homeowners."

This comprehensive summary encapsulates the episode's rich discussions on industry movements, tariff implications, effective trade programs, enduring design trends, and the current landscape of home retail. Designed to inform both regular listeners and newcomers, it provides valuable insights into the challenges and strategies shaping the interior design community.