The Thursday Show: Why Arhaus is suing RH. Plus: Arte is betting on the D&D Building

Summary

Business of Home Podcast Summary Episode: The Thursday Show: Why Arhaus is suing RH. Plus: Arte is betting on the D&D Building
Release Date: July 31, 2025
Host: Dennis Scully
Guests: Fred Nikolas (Executive Editor, Business of Home), Philippe Desart (Managing Director, Arte)

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Introduction and Agenda

The episode kicks off with host Dennis Scully introducing the main topics of the day: the lawsuit between "Our House" and Restoration Hardware (RH), and Arte's strategic investment in the D&D Building showroom in New York. Executive Editor Fred Nikolas joins Dennis to navigate through the latest industry news, including updates on tariffs, insights from the Vegas Market, and more.

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Recap of Previous Episode

Dennis briefly revisits the previous episode featuring Jeremy Bellotti and David Rosenwasser of Rarefy. Fred emphasizes Rarefy's multifaceted business model, highlighting their popularity on social media for design history videos and their diverse offerings in vintage and contemporary furniture.

Fred Nikolas [02:42]: “Rarefy is just such an interesting business. They sell vintage furniture, contemporary brands, and do so many different things.”

Dennis adds that Rarefy is mission-driven, aiming to inject fresh energy into the design and furniture industry.

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Tariffs Update

A significant portion of the discussion centers on recent trade developments. The Trump administration has imposed a 15% tariff on exports from the EU and Japan, effective August 1st.

Fred Nikolas [04:33]: “The EU deal is being framed as a win for Trump and the US, but European importers aren’t seeing it that way.”

Dennis points out the compounded impact of a weakening US dollar alongside the new tariffs, escalating costs for European goods.

Dennis Scully [07:38]: “Between the dollar and the tariffs, this is a very challenging time for a lot of European companies.”

Fred anticipates that while 15% tariffs are manageable compared to earlier proposed rates (e.g., 50% on steel), they will likely lead to modest price increases across the board.

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Lawsuit: Our House vs. RH

The hosts delve into the contentious lawsuit filed by "Our House" against RH, accusing the latter of corporate espionage. Central to the case is Lisa Chee, a former executive who moved from "Our House" to RH, allegedly bringing confidential information.

Fred Nikolas [11:28]: “Our House alleges that Lisa Chee forwarded business-related emails to her personal account and shared trade secrets with RH.”

Dennis reflects on the broader implications for the industry, noting the delicate balance designers face in retaining talent while safeguarding proprietary information.

Dennis Scully [16:24]: “This is just another reminder of that drama playing out on a big corporate level.”

Fred suggests that the best defense is fostering strong employee loyalty through competitive compensation and a positive work environment.

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Cryptocurrency in Real Estate

The conversation shifts to the growing intersection of cryptocurrency and real estate. Christie's International Real Estate has launched a division to facilitate property purchases using crypto.

Fred Nikolas [17:05]: “Christie's entering the crypto space shows how established companies are reaching for younger, affluent markets.”

Dennis anticipates further integration of bitcoin and other cryptocurrencies in high-value transactions, especially in hotspots like California and New York. The hosts debate the practicality and future of crypto payments in the design industry, acknowledging its current fringe status but potential for growth.

Dennis Scully [22:49]: “People need to learn about it, take it more seriously. That's why I'm glad we're talking about it.”

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Vegas Market Insights

Dennis shares observations from the recent Vegas Market trade show, illustrating a more optimistic and active environment than anticipated despite ongoing tariff concerns.

Dennis Scully [26:08]: “Everybody was talking about tariffs, but underneath it, they felt like once we get all of this resolved, things are pretty darn good.”

Fred notes that Vegas Market serves a unique role compared to other markets like High Point, catering to a different segment of buyers and maintaining a steady designer-driven presence.

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Wall Street Journal Article Debate

The hosts discuss a Wall Street Journal piece by Katherine Brindley on DIY rental apartment makeovers, which sparked a response from designer Chloe Redmond Warner. Chloe argued that design transcends mere inspiration and involves intricate execution, challenging the notion that accessible tools can replace professional design services.

Fred Nikolas [27:22]: “Chloe wanted to emphasize that design is about execution, not just finding the right inspiration images.”

Dennis agrees, highlighting the unappreciated logistical efforts that professional designers undertake to bring visions to life.

Fred Nikolas [30:58]: “10% of the job is artistic, and 90% is logistics and operations.”

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Interview with Philippe Desart of Arte

The latter half of the episode features an interview with Philippe Desart, Managing Director of Arte, focusing on their new showroom in the D&D Building, New York.

Arte's Company Profile

Philippe provides a background on Arte, a second-generation, family-owned European company based in Belgium, specializing in high-end wall coverings. The company balances both residential and hospitality contract markets, with a slight tilt towards the latter.

Entering the US Market

Arte has historically struggled to penetrate the US market until recent years, partly attributed to strategic showings at Paris Deco Off and a dedicated showroom presence.

Philippe Desart [33:34]: “We have a showroom in Paris that helped convince American visitors of our products.”

Showroom Strategy and Design

Philippe discusses the challenges of presenting wall coverings effectively, contrasting Arte's innovative "wing systems" with traditional, less engaging displays.

Philippe Desart [43:04]: “We call it our wing systems because you are almost interactive with the product. You flip through it.”

He emphasizes the importance of a flagship showroom to establish brand credibility and inspire designers, acknowledging the significant investment and strategic importance of the D&D Building location.

Philippe Desart [46:42]: “We have a permanent showroom that we pay a lot of attention to, making the space beautiful and inspiring.”

Navigating Tariffs and Market Challenges

Philippe acknowledges the impact of the 15% tariffs and a weakened dollar on Arte's US operations. He anticipates adjusting product offerings to maintain perceived value and emphasizes the necessity of high-quality, innovative products to justify increased costs.

Philippe Desart [53:32]: “Companies are probably going to integrate it [tariffs]. We have to see what will happen.”

He also highlights the importance of exceptional customer service and strong product quality to overcome logistical challenges in a volatile market.

Marketing and Future Outlook

Philippe outlines Arte's multifaceted marketing approach, balancing traditional print media with dynamic social media strategies. He stresses the importance of creating memorable content that resonates with designers and potential clients.

Philippe Desart [57:30]: “You have to think a lot about your strategies. What are you going to do? Which magazine? Why?”

Looking ahead, Philippe remains optimistic about the showroom's role in establishing Arte’s presence in the US, noting that future expansions will depend on the success of the current investment.

Philippe Desart [61:06]: “I'm very happy because we can show who we are to designers and that they get inspired and can work with our products.”

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Industry Highlights and News Bites

In the concluding segment, Dennis and Fred highlight notable industry news:

• EJ Victor Closure: EJ Victor has ceased operations following significant losses from North Carolina floods and a subsequent insurance settlement that failed to stabilize the company.

• GDP Report Analysis: The Wall Street Journal criticized the recent strong GDP figures as misleading, attributing the boost to a 30% drop in imports—a record decline akin to the Great Depression era—indicating that tariffs are severely impacting trade.

Dennis Scully [65:20]: “Imports falling by 30% tells you how big an impact the tariffs have really had.”

Fred humorously reminds listeners they won't hear these detailed analyses unless they stay until the end of the episode.

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Closing Remarks

Dennis wraps up the show by encouraging listeners to visit businessofhome.com for more insights, job listings, and workshops. He extends gratitude to guests and listeners alike, signing off until the next episode.

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Notable Quotes:

• Fred Nikolas [02:42]: “Rarefy is just such an interesting business. They sell vintage furniture, contemporary brands, and do so many different things.”
• Philippe Desart [43:04]: “We call it our wing systems because you are almost interactive with the product. You flip through it.”
• Dennis Scully [65:20]: “Imports falling by 30% tells you how big an impact the tariffs have really had.”

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Timestamp Highlights:

• 00:07: Episode kickoff by Dennis Scully.
• 04:33 - 08:30: Detailed discussion on tariffs impacting the interior design and furniture industry.
• 09:54 - 16:24: In-depth analysis of the lawsuit between "Our House" and RH.
• 17:05 - 22:49: Exploration of cryptocurrency's role in real estate transactions and its potential impact on the design industry.
• 32:55 - 61:53: Comprehensive interview with Philippe Desart on Arte's showroom strategies and market challenges.
• 62:01 - 65:26: Final news bites and closing statements.

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This episode offers a thorough examination of current challenges and strategic moves within the interior design community, providing valuable insights for professionals navigating tariffs, legal disputes, market expansions, and emerging financial technologies.

Transcript

[Dennis Scully]

This is Business of Home. I'm Dennis Scully and welcome to the Thursday Show. Later on, I'll be talking to Philippe Des Art, managing director of arte, about the showroom scene in New York. But first we're going to catch up on the news, including the latest on tariffs, a recap of Vegas market, and why our house is suing rh. To do all that, I'm joined by Business of Homes executive editor, Fred Nikolas. Hi, Fred.

[Fred Nikolas]

Hi, Dennis. How's it going?

[Dennis Scully]

Great. How you doing?

[Fred Nikolas]

I'm good. Welcome back from Vegas. How'd it go?

[Dennis Scully]

Thanks so much. You can probably tell how tan I got there in the hundred degree plus weather, but it was dry heat, Fred, so totally different.

[Fred Nikolas]

Did you take the entire podcast budget for the year and put it on red at the roulette table or are we rich?

[Dennis Scully]

Dennis, tell me there was a lot of gambling going on. I'm not gonna lie to you, Fred, but none of it from me. I'm not taking that kind of risk with our money.

[Fred Nikolas]

Fred, Good safe hands here at the Thursday show. Let's quickly look back on Monday's episode, a conversation with Jeremy Bellotti and David Rosenwasser of Rarefy, one of my favorite kind of newish brands, although not that new, as you found out in the conversation.

[Dennis Scully]

A lot going on. They've got a lot of different businesses. And who doesn't love the story of a young teenager making a small fortune collecting vintage furniture and using it as seed money for his future business?

[Fred Nikolas]

Right, Exactly. Classic way to get a startup going is $120,000 from a mid century furniture collector in the Philippines at age 14 or whatever. It was so cool.

[Dennis Scully]

Yeah. And then so interesting friends that meet at Cornell and both could have gone on to become architects but decided not to and decided to learn a whole bunch of different skills and look at this whole industry in a very interesting way. So there were a lot of discussions about, well, here's how this industry is and why it's so challenging for newcomers. And here's what we're doing to try.

[Fred Nikolas]

And break through the commercial furniture mafia was name dropped a few times. Yeah. Rarefy, it's just such an interesting business. So many different facets. They've got this like really popular social media account where they do these great videos about the history of design. They sell vintage furniture, they sell contemporary brands. They're doing so many different things. It's like a fascinating conversation just to get a window into a brand that really feels like it was built for the 21st century. Now I think they need to make more money and they acknowledge that in the conversation. But I think it's a very cool conglomeration of ideas and I think they're doing interesting things and I'm sure we will be hearing more from them in the days, months, years ahead.

[Dennis Scully]

Well, and what's interesting too is that, and I asked them this very directly, do you consider yourself really a mission focused, mission driven business? And they really do. And so their hope is that people will hear more about this company and want to work with them and maybe come up with some fun new designs and bring new blood and energy to the design industry and furniture design especially. So stay tuned for everything that comes out of that. But definitely an interesting conversation.

[Fred Nikolas]

Well, when they get the BOH bump, it's only a matter of time.

[Dennis Scully]

Exactly. I wish them the BOH bump, as I do for all of our guests. All right, we're going to take a quick break and then we'll get to the news. This podcast is sponsored by June Laloy. You likely already know Laloy, a prominent name in the design world known for rugs. Now meet its sister brand, June Laloy, a total home furnishings destination that expands on Laloy's expertise, adding furniture, lighting, decor, and, of course, more rugs. If you know Laloy, you know their collection leads with quality, craft and great design. And June laloyloy follows suit. With June laloyloy's trade program, designers receive exclusive pricing priority, customer support, and a seamless online sourcing experience. Visit junelloy.com today to explore the collection and sign up for a trade account. That's J-O-O-N L O L-O I.com and now on with the show. And we're back. First up, what else? Fred, Tariffs.

[Fred Nikolas]

Here we go again. The Trump administration announced new trade deals with the EU and Japan in recent days, with both agreeing to a 15% tariff on exports. Next up on the calendar is August 1st. That's tomorrow when a whole mess of other tariffs and mess is maybe a good word for it may or may not come into effect. Dennis, what do you think exactly?

[Dennis Scully]

A mess that may or may not come into effect. That pretty much describes the situation that we're in, but at least we do have some clarity, for better or for worse. Fred, about the eu.

[Fred Nikolas]

Yeah, the EU thing is an interesting situation, right? Because so much of the news coverage of the deal focused on how it was optimized around US Interests. A lot of people thought that the EU would hold out for a lower tariff rate or get more favorable consideration. But people are definitely framing this as a win for Trump and the US More broadly. I will say, just talking to people who import home goods from Europe, they do not really see this as a win. I think that there was this hope that the eu, because it's one of our biggest trading partners, has leverage and there wouldn't be this 15% tariff. But as is so often the case with these tariff stories, most people say some version of could be worse in kind of a resigned tone and try and get back to business. But what are you hearing out there?

[Dennis Scully]

Well, much the same. I think that people for a time were longing for the clarity that now suddenly the clarity comes, and it comes with a 15% tariff. And that's really not what anybody wanted. And often what several people have said to me is, so who are our allies again? Who are we friends with? Because I think the thinking was that Britain ended up with 10% mostly, and the EU seems to be getting a little stronger tariff at 15. But it's. I don't know if these are friends. What are we doing with people we don't like?

[Fred Nikolas]

Yeah, I mean, as I said, it certainly could have been worse. I mean, I think that 50% tariff was floated only a couple weeks ago. That would have put a lot of people in our industry out of business pretty much overnight, or at least would have stopped them from doing business in the U.S. i think 15% is manageable, kind of. If you are already accustomed to 10%. I don't think 15 is going to put people out of business. But I think simply because it's a lower ish number than the crazy numbers that were tossed out at the beginning, we shouldn't lose sight of the fact that there's so many company fabric companies, all the BNB Italia and those types of people. There's so many companies that do business here that are European, that designers rely on. And 15% is like your profit margin for a lot of these companies. So they're going to have to find a way to fold that into their cost structure. These companies don't have Asian factories they can negotiate with necessarily to get the cost down because they're producing in Europe. And so I think that you are going to see some prices tick up. It's not going to be like fabric doubles overnight because of this, but it is going to add to the cost of doing business with European companies. And there are a lot of them. So I'm gonna say the same thing I always say about tariffs. There's a lot of uncertainty, but this will slightly raise prices. That is one thing for sure.

[Dennis Scully]

Well, and unfortunately the 15% tariff against the EU comes at a time, and we've talked about this on the show before, comes at a time where the dollar has had a dramatic fall. And so you've got the double whammy of the US dollar buying less and then a 15% tariff. So things are even more expensive and the dollar tends to not move in such a dramat fashion. So it's hard to imagine the dollar suddenly rallying in some meaningful way and getting all of that back. So you're absolutely right. Prices are going higher of those European goods. There's little question about that. And all this nonsense about everyone's going to eat the tariffs and the foreign countries are going to pay for them. That is just not what we are likely to see. So unfortunately, between the dollar and the tariffs, this is a very challenging time for a lot of the European companies that designers are dealing with.

[Fred Nikolas]

Yeah. And to say nothing of the fact that the 50% tariffs on steel and al them are still in effect, maybe not talked about as much, but a much bigger number and definitely matters for companies that import from the eu. So keep an eye on your European vendors and I suspect you'll be seeing some price hikes there soon. We mentioned earlier that August 1st is the next big day. To keep in mind that's tomorrow for listeners of the show. Then apparently we're going to get a little bit more clarity maybe on the rest of the world, including these big numbers on Canada and Mexico that have been threatened. India, which was supposedly a safe haven from all of this, has been threatened with a 25% tariff, I believe it was. So it's just hard to talk about these numbers until they're written down. But every time it seems like we're closer to a resting state on this, it feels like there's some new development on the horizon. So sadly, we will be talking about this next week, almost certainly to be sure.

[Dennis Scully]

And to your point, when you come home from a market, you realize how important India and Asia really are and how much that product is infiltrated the home industry in a big way. So yes, stay tuned for next week's show where we'll talk about it some more. In the meantime, our house is suing R.H. fred. Last week our house filed a lawsuit in federal court against the company formerly known as Restoration Hardware. They're alleging some pretty spicy corporate espionage. Fred, what's going on here?

[Fred Nikolas]

Well, let's get into that very juicy story in one second, but I want to quickly do a little behind the scenes. Look, listeners may not know that we actually come back at the end of the show after you've done the interview with our lovely guest. We come on at the end of the show and share a little oh, this here's a funny thing I noticed in the industry. Here's an interesting thing. And a few months ago, something caught your eye which is very relevant to the story we're about to discuss.

[Dennis Scully]

A big hire from RH was announced. They're bringing back Lisa Chee, who used to work for them a few years back. She is coming back now as the co chief merchandising and creative officer as well as being made a president at the company. And it's both a big loss for our house where RH poached her because she had had quite an impact at our house. And it's also a big, it's a big feather in RH's cap.

[Fred Nikolas]

So why are we talking about Lisa Chee, Dennis? Why is that relevant? Well, did you know, did you know that her name would come back when you shouted it out?

[Dennis Scully]

I didn't know it would all happen this quickly. But certainly you hope that a good key from a competitive operation is going to bring you some interesting research, some data, some information. Who knew that allegedly she would bring the latest catalog and some other design ideas along with her? But we should explain, Fred, what's actually being alleged in this suit. But Lisa Chee central.

[Fred Nikolas]

Yes, let's break it down. So who is Lisa Chi? So Lisa Chee is an executive who actually formerly was at RH before she decamped to go to our house in 2021. Then earlier this year, as you pointed out in the caught my eye segment, she went back to rh. So she's kind of bounced between the two companies. The allegation in our house's vitriolic lawsuit essentially is that Lisa Chee, while she was at our house, would forward emails that were related to our house business to her personal email account, including apparently earlier this year, someone I think sent her personal email account their fall 2025 catalog, which our house guards very closely, apparently. And so the idea, or at least what our house is claiming, is that Lisa then subsequently went over to work at RH earlier this year. She brought all these trade secrets. She shared them with Gary Friedman at rh. And you know, lo and behold, RH has been rolling out product that our house alleges is very similar to what they were doing. Now, again, this is a lawsuit. These are allegations. I have no independent reporting on all of this. I would assume all the stuff about the emails is buttoned up, otherwise they probably wouldn't bring it to court. But even so, I don't know. I was sort of. Of two minds looking at this story. What was your initial gut reaction to this?

[Dennis Scully]

So you were of two minds. I can't wait to hear. Fred always thinks I answer questions with more questions. So I'll try to answer Fred's question this time. So my, my thought was. But of course. Right. I mean, of course you bring this key person on, as I, as I said in the beginning, you hope they bring something juicy with them. But as you and I have been on so many of not only the RH earnings calls, but also the our house earnings calls, we know that analysts raise these questions all the time. Well, you have certain competitor that seems to be possibly competitor, and they don't like to call it out. Exactly. And John Reed, who the CEO of our house is, is usually pretty diplomatic and doesn't say anything by name, but says that, listen, you got to work hard to stay ahead of the competition. So you always get the sense that this is a, this is a big rivalry and, and there's a feud between them and, and, and some bad blood, perhaps. And there's always bad blood when you hire a key person away.

[Fred Nikolas]

Yeah, I mean, I think that's the context in which this out against. And it's not just. It's funny because you'd say John Reed is very diplomatic. That's of course, our house's CEO. But our house actually sued RH last summer, almost a year ago on the dot, alleging that RH had copied one of its chairs. And the accusation in court was almost emotional. It was saying, like, RH has knocked us off so many times, we're sick of dealing with it. And they said that RH had named the product Arnault, like the Arnaud chair, specifically to, I don't know, tease our house or something like that. Almost personal. It felt. So, yeah. There is a lot of animosity between these two companies. I think the thing I was of two minds about is that, as you said, when you hire somebody to a new company, presumably they are going to take the expertise with them. Is it really valid to sue somebody for bringing the experience that they've gained at your company when they go to a competitor? But on the other hand, I've been talking to people who say that at public companies, you have to be really buttoned up about email. And it was a little sloppy to forward documents to our personal address. I don't know. I've never worked for a large furniture company, so I'm not really sure how that stacks up. But just to bring it into the designer world, I know that this is actually kind of a pain point for designers. You train up a top lieutenant at your firm for years, maybe even decades. They leave to start a competing firm. Sometimes clients go with them. It's not at the same scale, maybe as RH and our house, but I do think this sort of of how to approach these things is very complicated. I don't know. I've always been an employee, so I always tend to side with. Well, of course, just learn what you want. Go to start another company. That's what people do. But I think if I had my own business and I gave someone all my secrets and they went around and started the Friday show or whatever it is, I think maybe I'd feel differently about it. I don't know. That's the thing I'm trying to reconcile in my mind about this.

[Dennis Scully]

A pox on anyone who starts the Friday show, by the way. Yes, let's get that out. But no, I agree. And I talk to so many designers who are really working hard when they hire somebody to get a read on. Is this somebody who is going to stick around, that I can invest in, that I can train, that's going to work with me for X amount of years? Or is this someone who's looking to start their own firm, they're going to spend six months or a year with me and then go out on their own? And I think you're so right. I think this is such a big challenge for design firms today, keeping talented people and really growing and developing them. And I understand the temptation to go out on your own and how difficult it is for people to build a team. And this is just another reminder of that drama playing out on a big corporate level.

[Fred Nikolas]

Yeah, you're kind of damned if you do, damned if you don't. I tend to think that designers and anyone really running a business is well served by just starting with, how can I keep this person? By treating them so well and paying them as much as I can that they won't even want to leave. So maybe that's the best strategy for avoiding. Avoiding your trade secrets leaking out. But easier said than done. And I think this will always be a pressure point in the industry, and certainly this is a pressure situation, and we will be watching that lawsuit like a hawk. It's very intriguing. And certainly we'll be covering in the business of home, if there are any developments.

[Dennis Scully]

Absolutely intriguing. Indeed. Next up, Fred, equally intriguing, crypto.

[Fred Nikolas]

Yes. Last week, Christie's International Real Estate, one of the largest luxury brokerages in the country, announced a new division dedicated to assisting buyers who want to purchase real estate with what else? Cryptocurrency. And Dennis, for the second time in the show, we have to give it up to you because in our predictions episode at the end of 2024, your big call. We won't say what my big call was. Never mind about that. I know your big call was this.

[Dennis Scully]

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 once again, once again, we called it here on the Thursday show.

[Fred Nikolas]

And what's funny is that like, you know, I think at the time bitcoin was a mere $90,000 or something like that. Now it's up to110,120. It seems like it's breaking records all the time. It's interesting because there's not as many stories about crypto in the media. Certainly we haven't covered it that much at BOH because I think there was this sense a few years ago that oh, ape JPEGs are going to be the future of currency and everyone's going to be on the blockchain all the time. And that didn't really come to pass. But quietly what happened is that bitcoin and all these other cryptocurrency assets have gotten more and more valuable and affluent people have them and want to use them and now they're using them to buy real estate. It seems.

[Dennis Scully]

Well, exactly, exactly. And I think we did write and talk a lot about, to your point. NFTs, those non fungible tokens. Wasn't that fun to have to say over and over again? And it seemed like a joke. It seemed like a game. It seemed like a sign of excess at the time. And then all of that sort of quieted down and slowly but surely bitcoin just kept going higher and kept being accepted more and more into the financial culture. A lot of big financial CEOs who joked and said, no, we're never going to get involved suddenly started to issue Bitcoin ETFs and Ethereum ETFs and even the federal government is talking about stablecoins and the genius act and all of that. So it's just crept into the culture. And what is fascinating is that all of a sudden it's a $4 trillion market. So there are a lot of huge fortunes out there. People who have had for a long time and as we've seen in the real estate market can show up with $65 million worth of Bitcoin and buy a home in Beverly Hills.

[Fred Nikolas]

Yeah. And I mean, how funny is it that it's Christie's of all people, this very 5,000 year old company or whatever it is, that's the one getting into facilitating these crypto transactions. I do still think that crypto is. Even though, even as it's getting deregulated by the federal government, it doesn't really feel like, like it's part of most people's day to day lives. I mean this is maybe a very small sample size, but you put up a poll on Instagram asking designers like, hey, has any one of your clients even so much as mentioned crypto? And you know, there was a big fat. I think it was 0 replies was the number. That's obviously just one Instagram poll on one day, but I don't hear designers talking about it that much. I still think it's kind of in the fringe for the people who are listening to this show. But I don't think it's so crazy to imagine that people will be doing these big transactions for the 65 million doll home using crypto in the future. I think that is definitely going to happen.

[Dennis Scully]

More interestingly, I think the news coming from Christie's and the news coming from Fidelity show you that a lot of these very established companies desperately want to reach this younger market. And saying that you offer crypto and saying that you can create a bitcoin ETF I think is a nod to this younger market. And we talk so often about this enormous wealth transfer that's coming. I'm going to be so curious to see which to the trade brand Fred is going to be the first that is going to accept bitcoin. My money's on Kravet. My money is going with some firm.

[Fred Nikolas]

Schumacher.

[Dennis Scully]

I'm joking of course.

[Fred Nikolas]

Schumacher.

[Dennis Scully]

Well, no, exactly, but I mean, all joking aside, I'm really curious to see who's going to be the first to say yes. Okay, we will. The challenge is it's very volatile and so it moves up and down quite a bit, but there will surely be an announcement one day. And the only reason I joked about Kravet was because I'm guessing that it, it might be somebody who's private equity owned and who has deals in that area in other ways. So listen, designers are always looking for, where's the next group of wealthy people? Well, I'm guessing some early bitcoin investors are probably a pretty good group to call on.

[Fred Nikolas]

Yeah. It's funny, I never really thought about sort of the cultural angle, this idea that all these bankers are like putting on their sunglasses and their skateboards and hello, fellow kids, we have crypto and Labubus going to sign up with our bank.

[Dennis Scully]

Well, exactly. They see what Robinhood has done, and Robinhood has come in and has a greater market capitalization than Charles Schwab. And the reason is they look like they're talking to the kids.

[Fred Nikolas]

Well, so do you think they're. In all seriousness, though, all the boo boos aside, do you think designers should seriously try and convey, like, hey, I'm willing to accept payment in crypto, like, I'm cool. Like, is that a viable strategy? Especially for someone maybe in California, where there's a lot of crypto money? Certainly. Or New York, there's that here, too. Is. Is that actually something you think designers should consider?

[Dennis Scully]

I think it's not dissimilar to the conversations that we've been having about AI. I think it's one of these things where I think people should learn about it. I think they should understand what's going on. We've joked about it for a long time. This is not a joke. This is happening. This is coming more and more. We didn't used to know what Venmo was. We didn't used to know what all of these easy payment services were a few minutes ago. And now, now they're something that we use every day. So I just think people need to learn about it, take it more seriously. And that's why I'm glad we're talking about it.

[Fred Nikolas]

Agreed.

[Dennis Scully]

Moving on. We're going to talk about Vegas markets.

[Fred Nikolas]

Vegas, baby. Dennis, you just got back from the summer trade show at the world famous World Market center in Las Vegas. You did not make us our fortune to buy our podcast studio on the craps table, sadly. But you probably picked up some interesting insight. I. I guess, first of all, should we just start by explaining what Vegas Market is? I mean, it's obviously a big entity, but not everyone goes, what's a sort of thumbnail history of Vegas Market?

[Dennis Scully]

It's so Interesting, Fred, because Vegas market, when you think back to 2005, when the announcement was first made that the World Market center was going to open in Las Vegas, there were these very grandiose notions from the early investors who were involved that Vegas was going to take this huge strip of land, there were going to be multiple buildings built, and it was going to overshadow and become the high point of the West Coast. It was going to take all of this business from all of these existing markets and didn't quite work out that way. But interestingly, in 2008, they made a bold move and hired Bob Marisich, who is a legendary figure in the industry at the time was the president and CEO of Century Furniture. And this was a big, bold announcement that we are meaningfully going after all of these big High Point furniture companies. We're going to bring them all here. The market has evolved and Bob Marisich is now the chairman of Andmore and he is still running around market. He and I bumped into each other and got to have a laugh a little bit about some of the history. But Vegas has become a very important market for a lot of these companies that don't have a West coast presence. And it was interesting because a designer from San Diego came up to me, fan of the show, we had a nice chat and she said, truthfully, High Point, it's too long a trip for me. And so it serves a very different role than perhaps they had first thought, but an important one.

[Fred Nikolas]

Is it mostly designers? Is it mostly retailers like who's walking the floors?

[Dennis Scully]

It's interesting because Vegas is a combination of gift shows and furniture. So there are a lot of different kinds of buyers there. There's certainly, there's certainly a retail presence, but just like we've seen at High Point. So one of the buildings in, in Vegas, the, the, the main floors in the A building are actually open year round as a design center. Even when market isn't going on. That has become a very designer driven market, just like we've seen at High Point.

[Fred Nikolas]

So what were people talking about? Was it, was it all tariffs all the time? Were they talking about crypto? What was, what was on people's minds?

[Dennis Scully]

You know, I wish I had asked more people about. Funny enough, I got to run around with a microphone and do some man on the street interviews and bumped into friend of the show, Tim Stump, among others, and got to hear Tim's perspective. But I did talk to some stagers and some designers who were there. And yes, it's the Thursday show writ large. Everybody was talking about tariffs, but underneath it, they felt like once we get all of this resolved, things are pretty darn good. There wasn't as much doom and gloom I felt there among the people that I spoke to. I mean, they're eager for the housing market to come back, of course, but there was a lot more energy and activity than one might have thought. But all of the issues that we talk about are certainly top of mind for everybody there. Moving on, we're gonna talk about an article in the Wall Street Journal that sparked some interesting conversation online last week. Katherine Brindley did a great story about redecorating her rental apartment on the trail, cheap. But one of the designers mentioned in the piece, Chloe Redmond Warner, took issue with the idea that design comes down to inspiration. Interesting response, Fred.

[Philippe Desart]

Yes.

[Fred Nikolas]

Yeah, this was an interesting. Well, first of all, it was a good article, and Chloe started an interesting conversation as well. I should sort of break it down. So Katherine's piece for the Wall Street Journal was really, it was kind of like a get the look for less type article, but a very sophisticated Wall Street Journal y look for Less. You know, she's a freelance writer or a writer rather, and she's interested in design, but she lives in a rental in San Francisco and is in the position a lot of people are in where she's obsessed with designers but doesn't have the budget to hire them. She really broke down this pretty impressive toolkit of using Google Reverse image search to find inspiration images and what they really mean, using Facebook Marketplace, something I myself am very fond of of, and really broke down these tools that you can use to sort of get the designer look on your own, which is a classic format of an article. But I think she did a great job and it was a fun one. And then Chloe's response. Chloe's mentioned in the piece a few times as sort of an inspiration that this writer had been inspired by. And Chloe, I think, liked the article and wasn't calling her out necessarily, but she wanted to make the point that it's like, I think people walk away from these articles sort of thinking, thinking like, okay, well, if you have the inspiration, that's really 50% of it. And then you just got a Google reverse image search and you can buy everything and it's simple. And she wanted to make the point that no design really is about execution. It's not about, I've seen this pretty picture and I can Google image search it or get ChatGPT to find the sofa. It's about actually bringing it all together and making it happen. And it was sort of like a cri de corps on behalf of designers and their values. So interesting conversation. Very polite, very respectful. I. I wish this was more dramatic, but I think it's an important one in the industry.

[Dennis Scully]

No, I agree. And I thought this piece was great on several levels. And I think you and I have talked a lot about service pieces in the past. I love that Katherine Brinley shared so personally both images of her apartment, which I thought looked pretty impressive, and then really broke it down. And here's how I got this and found this and made this work. So I thought that part of it was really interesting. And as she said, the magic, my friends, is in the edit. But even more than the edit, it's in that darn execution. It's in that whole part about, oh, yeah, you gotta get all these things and then get them to the project and they all have to arrive and they all have to be warehoused somewhere in some staging area and then ultimately brought over to the project. And actually, it's all of that. That. That is what is so darn hard and what is so remarkable about what designers pull off again and again.

[Fred Nikolas]

It's interesting because I think designers, they market their services using finished imagery. Like, that's the beautiful stuff that catches people's eye and that becomes their calling card. But the unspoken reality of the industry is that what you actually hire a designer for is not simply that they have great taste, it's that they can make it come to life in your space. 10% of the job is artistic, and 90% is logistics and operations. I think that this is something that every designer knows, but not every client does. And I think that it was right for Chloe to call that out. I think it's just interesting because it's difficult to convey that. I think who wants to look at a designer's website and see all these spreadsheets? And this is what I can do for you. Spend all day on the phone with the contractor. Know, I think it's. It's always going to be a little bit of a discovery that clients make when they, when they really engage with the designer for the first time. It's. It's hard to get that message across.

[Dennis Scully]

Yeah. And, and again, I think a lot of designers don't want to play up how good they are at the logistical side of the, of the business because they don't think that's what romances the. The client or gets people excited. Right. And I, and I get that, but I do think it's a reminder, as everybody, of all that designers do. And not everything that designers do is fully appreciated by potential clients. But interesting conversation and interesting piece. And it's always fascinating for me to see the stories on Instagram that lots of designers show up and weigh in on, and this was certainly one of them. All right, that's it for the news, but there's plenty more to check out on businessofhome.com including the latest showroom openings and Sean Lowe's advice on adopting a new fee structure. We'll be back in a minute, but first, a quick break. We're taking a quick break to tell you a little bit more about June Laloy. As a sister brand to Laloy, June Laloy maintains the same design acumen, high standards of quality and value, offering furniture, rugs, lighting and decor. For today's home, the Junelloy trade program is designed to make doing business a breeze, offering exclusive benefits to designers that include special pricing priority, customer support, and a seamless sourcing experience. Visit junelloy.com today to explore the collection and sign up for a trade account. That's J-O-O-N l o l l o I.com and now back to the show. And we're back. I'm joined now by the managing director of arte, Philippe Desartes. Philippe, thank you so much for joining me from Belgium.

[Philippe Desart]

Hi Dennis. I heard a lot about you. I follow your podcast very, very, very often because it keeps me a little bit informed about what's going on in the US While I am based in Europe, of course, in Belgium.

[Dennis Scully]

Well, I'm delighted to hear that. I appreciate that very much, Philippe. Thank you. And I'm glad that it's helping to keep you informed about this challenging market that is the US which we'll talk about. But before we jump into that, let's talk a little bit about Arte and give listeners a little bit of the history. It's a third generation family business, if I recall. Tell me, tell me a little bit.

[Philippe Desart]

It's a second generation for Arte, but my grandfather was already also in paint business and my father was working there. That's so sometimes it's third. Is it third? Is it second for Arte? It's second.

[Dennis Scully]

Right. He had a paint business originally.

[Philippe Desart]

So Arte is a European company based in Belgium. The company is founded in 1981. We are 100% family owned company and it's run by myself and my brother and we are very grateful to have a great team of more than 200 people that help us every day and.

[Dennis Scully]

What is the primary. Tell me a little bit about the product offering from rj. I mean, I know it as a wall covering company, but you tell me.

[Philippe Desart]

Well, of course it's a 100% wall covering company. We decided, I think about 15 years ago where we also tried with fabrics to stop doing that because like we sometimes say, when you cut in our arm, wallpaper is coming out, out. So it was very difficult to talk about fabrics. We talked hours and hours and hours about wallpapers. And then at the end somebody said, hey, we also have to talk about the new fabric line or the fabric collection that we are launching. So we decided 15 years to do what we are best at. So we had to decide at a certain moment what are we now, are we going to be high end or are we going to be middle end? And we always wanted to be high end. So we decided it to go 100% into that direction. But take our time, take our customers also with us. And today we have a product mix that is quite well balanced. I think a lot of people think that Arte is only expensive and unique, but we also have a lot of very nice base products.

[Dennis Scully]

In terms of the breakdown of your, of your business, when you, when you think about the contract side versus the residential side, tell me what that divide looks like.

[Philippe Desart]

I think today that the company is maybe 55% hospitality contract and 45 of residential, depending on the market. In Europe you still have some residential or retail markets in many, many other continents and countries that almost disappeared. It's always going through interior designers, not through a shop anymore.

[Dennis Scully]

And do you feel that that's a trend that's going to continue? That there's going to be less retail business and more designer driven business?

[Philippe Desart]

Probably because maybe it's a little bit like a landscape architect. But of course I'm looking through European glasses. That was something that was very uncommon. Today it's a very common thing. And I think that maybe the same thing will happen here in Europe and I think in the US it's already for a long time that people, when they do their home, they go to a stylist, a decorator, an interior designer, somebody that can give them advice and that help them. So I think it will be a trend, yes. Also in retail market, do a lot.

[Dennis Scully]

Of people use designers in Belgium? Do a lot of people use interior designers?

[Philippe Desart]

I think our retailers, they are the designers or we call them the decorators. But I think that more and more people are using an interior designer design areas today, definitely.

[Dennis Scully]

So I'm curious Is the United States the biggest market for you? Is that your primary focus or how does it break down with how the rest of the world is for you?

[Philippe Desart]

To be honest, I think that Europe is still for us. And I consider Europe as a market. But I definitely think that the United States has also always been historically a very big market in decorating. And there is still a lot of potential for other arte. We are trying for the last 30 years. And it seems that for the last five, six, seven years, we are doing something very well. Maybe just needed some time. I think we started in the 90s in the United States. First we were. We had a lot of books that were sold through Schumacher as a distributor. But that did not work out the way that my father liked. So he started his own company, company. Then my nephew or my cousin, sorry, Tom, came to work in the United States for Arte. Then Tom decided to do another thing. He wanted to go into furniture.

[Dennis Scully]

So is that Tom Verrelin that we've talked about? Okay, so Tom Verrellon, right. So we had him on the show and he talked about. He talked about the Arte business and bringing it to the States and doing the sales there. Okay.

[Philippe Desart]

So he was one of the pioneers, together with my father to bring the company to the US US and then after a couple of years, he decided to do his own thing. So we had to find somebody else to run the company. That was not so easy because that's the biggest challenge for a overseas company to find the right people to help you. And then Frederick from Romo was my.

[Dennis Scully]

Another former guest on the show and a big name in the industry. So Fred Frederick, now he's with Romo for many years, but then he shows up and he's selling Arte.

[Philippe Desart]

Frederick was working with Deloitte and he was a very good friend of my brother. And my father thought, thought, oh, that is an ambitious guy. So maybe I have to ask him if he is not interested in running our company in the US and he took the challenge. And at that time, we were the distributor of Romo. And then after a while, Romo decided to go on them, by them, by themselves. So on their own. And Frederick joined them. Because I think Frederick saw more potential at that time in the Romo future than maybe in ours. And I think also we were maybe not as mature as Romo was because Romo was from the uk, had more experience with designers. They had that the company existed longer. They probably had money to invest. And now I think our company, the headquarters, is more mature. We are ready. We understand the business very well. And what we have been doing for the last 10 years in Paris, during Paris Deco off, it helped us a lot in convincing people in our products because we decided to have a nice showroom in Paris and, and we had a lot of American visitors, people that came to Paridekoff and people came to see our showroom and started to see our products. And I think it helped us a lot.

[Dennis Scully]

Well, and I'm so glad that you mentioned that because I've had a lot of conversations with people who have seen Paris Deco off as a vehicle obviously to show product to people from all over the world. World. But a high concentration of American designers have been coming to Paris Deco off and it turns out to be a wonderful way to show product to the American market.

[Philippe Desart]

Of course, of course we can show it the way we want to show it because of that showroom. Before we had an exhibition at Maison. But you know, you always have to build a stand and here we have a permanent showroom that we pay a lot of attention to, to the details, to make the, the space beautiful, to do the presentation the way it should be, to elevate everything. And I think that if you have to go and to somebody and you have a lot of samples and collection books with you, it's never the same than when you see it in its full glory and in the, in the showroom, we can do that. Of course, that's the whole point of a showroom.

[Dennis Scully]

No, exactly. And, and, and, and I've often wondered about that challenge, particularly with wallcovering. It's all very nice and I'm sure you have very talented road reps and salespeople who are out there. But I've always thought that it's a particularly challenging product to sell on the road without a showroom being able to see installations, without being able to see the product in larger scale. How do you think about it?

[Philippe Desart]

You need strong people that want to carry those books.

[Dennis Scully]

Really talented.

[Philippe Desart]

Look at the American companies. You don't make collection books like we do. We really make wall covering books like you know, them maybe from a long time ago. And we still do that because we have still a lot of retailers. But I also think that there is nothing more inspiring than a good photo together with the product. Bring the, the tell the story in that book. So it helps a lot to explain what we are doing to, to bring that story well.

[Dennis Scully]

And so this is leading us up to the exciting showroom conversation that we're going to have. You are the latest contestant in the ongoing Battle between. And I'm joking, of course, but we've been talking so much lately about challenges at the D and D building. Many tenants going to the New York Design center or going out on the street and going to different places. Places you just recently, just this earlier this year, opened a really beautiful new showroom in the D and D building. I had the pleasure of spending some time there and was very impressed. And the showroom is beautiful. I know that that's a huge investment. So tell me about that. This big decision, this big investment, and really how you thought about it.

[Philippe Desart]

I have always been inspired, and I always admired what was happening in the US because when I was. Was 20, my father took me with him on his trips to the United States. And then we already went into showrooms. So for me, it was like, whoa, here you have a building with all these showrooms. That was something that did not exist here in Europe, and it still does not. Does not exist. The only one is. Is. Is in London where you have really a design center. But besides that, I don't know any design center in Paris. You have showrooms, but they are not in a design center. You still have to walk through all these streets, so it's less concentrated. You really have to go to that place. And I was always impressed by those beautiful fabric products. And they were always so well presented and draped so beautifully. And then I came to the boards where you had the wallpapers, and they were always in a. Yeah, not presented in the right way staple.

[Dennis Scully]

They didn't look nearly as good on these boards.

[Philippe Desart]

Crooked bars. And then you had that beautiful textile hanging there. And then you had a couple of bars with strips stapled all the colorways. And I always thought, if we do one day a showroom, it cannot be like that. And I think that has been the motivation of trying to find a good way, a different way, an inspiring way to present our products. And I think we succeed in that. We developed a. We call it our wing systems because you are almost interactive with the product. You flip through it. That's something that people like. That's what I learned in the US Try to invent another thing that is better than flipping through boards. Not easy. We have done many things, but it's not easy. It's so quick, you see it immediately and hop you go. But we wanted to do it in a better way. So we extrude our panels ourselves. We really upscaled the way of presenting wall coverings. And then also, I think, because we talk often about the buildings, is the building Good or is the building not good? But are the showrooms that good? There are a lot of showrooms that look a little bit dusty. And we said we cannot do it that way. If I go in a fashion, in a fashion shop, in a handbag store store, everything is beautiful. You take the same handbag and you put in a different environment. It's not the same handbag anymore. So the branding is so important. And I think that what we try to do is talk the language of presenting product 20, 25 and beyond. A lot of people might think that we are crazy going that far in it, but we're working with people that love interior design. So when they come into that environment and they open the door and it feels this is a nice space, then I think we can only. Of course, you need good products. Otherwise you can make the most beautiful boards you have. They will see it. But if you do both well, then it will definitely help and people will come to the showroom, I'm sure.

[Dennis Scully]

And how did you think about. How did you think about the D and D building and what it represented versus I mean, I'm sure you must have looked at the New York Design Center. I'm guessing. I'm assuming you must have given it a lot of thought. Tell me what stood out for you or what made the decision?

[Philippe Desart]

What stood out? Of course, before you do something like this, you start looking around and you doubt everything you're doing. Is this the right decision? When you do it, you're there. You have to continue. So I went also to 200 Lexington. Are we going to do street level? But I think that the brand is maybe not strong enough yet to go and invest like in a certain area on the street level and open a door there. Because we still have to build a good network of customers. And the D and D building has that network. And there are a lot of companies in that building. Maybe they see not enough new people.

[Fred Nikolas]

People.

[Philippe Desart]

But I'm sure that for us, a lot of people heard about the company, but they never saw the company. And I know the traffic is not anymore like it used to be. I know that. But is that a big problem? I think the way of doing things are maybe different for the designers. When you go to a. A fashion shop that you like, do you need to go every week? No, you go once every, maybe twice a year. And then you go online and you understand the brand. You bought into the brand. You know what they are doing. You like it or you don't like it. And people are. I think you need A flagship showroom so that they can understand what you are doing. And maybe then the extension of that can be social media, can be Internet. Is that done bad? No, it's just the way it is today. So I think that it's because I was listening the other day to another podcast of you and I heard people, you know, at the same time, is the building good? Is the building not good? And then at the same time we say, yes, but designers need to feel and touch the product. Yeah. Where are you going to feel and touch the product? In the showroom. So maybe you have your brand has to be strong enough that people will come to your showroom.

[Dennis Scully]

And how are you thinking about the long term? Do you imagine you were just saying that you need a flagship showroom? Do you imagine that this will be your flagship showroom? Or if you find even greater success, can you imagine opening flagships in other locations?

[Philippe Desart]

I think of course the USA is a very, very big country. Not everybody or people from Florida, Louisiana, they're not going to go to New York or the time. But it is definitely a good way to. When you talk to people and you can say, we have a showroom in New York, come and see us, then they will, maybe some will come and it will definitely make give you more credibility. Are we going to open other showrooms? I don't know. I think we first have to look what this one is going to do.

[Dennis Scully]

We have to pay for this one first and see how it goes.

[Philippe Desart]

Yeah, why not? But do we need that in every state? Not at all. And I think we already have very good partners where we work with. So if they do well, then there is not the need of doing that. I think we can also invest in a lot of social media so that people find your product, that they can go online, that we service very well. Our sampling that they do, the sample request they do online, I think that is very important that that service is good. So future wise, let's start with this one and then make sure that our service, our quality and our products are very good and then we can think about the next steps.

[Dennis Scully]

And how are you finding business in the States? As you say, it's such a big country and generally different markets are performing at different levels. But what are you finding in this challenging environment?

[Philippe Desart]

I hear a lot that it is not easy to get appointments with designers. That is getting more and more difficult. I always have a little bit a hate love relationship when people say that because we also have 50 sales reps. I have 50 sales reps on My payroll that go everywhere. And if you have good product people, they let you come because the designer also need inspiration, colors, designs. So that is very important. If we do well, what we are doing and the brand is strong, maybe having those designer calls will be not so difficult as we think it might be for other people. Maybe more difficult because I can understand that designer is not waiting to see 50 firms in a month that come and show their product, and especially not when you have always the same type of product. So I think that it is up to the companies also to surprise the people. Then you will get your appointments, I'm sure.

[Dennis Scully]

Another big challenge in the industry. So obviously we talk about tariffs a great deal. Philippe, I'm sure you've heard that. And that's one challenge. But another challenge that's interesting for European vendors especially is, is that the dollar has fallen pretty dramatically over the past year. Let's call it 10, 11%. And that is an unusual move for the dollar to move lower that dramatically. And that has certainly impacted things.

[Philippe Desart]

Yeah, it will definitely not play in the positive way in our cards. Having 15%. I hope that is the first final tariff. Now, the fit that Europe has negotiated together with a weaker dollar is not the best ingredient, but okay. I think the dollar dropped over the last couple of months, not year. I think it was quite okay a year ago. And maybe we still have to wait and see what is going to happen in the next coming months, because the world is a little bit on fire and we should not panic and try to do our business the best way we can. And maybe within six months or a year, if you see everything that happened over the last four or five years, next year can be maybe a complete different situation. Who knows?

[Dennis Scully]

How will you manage a 15% tariff for product coming into the U.S. do you imagine that you will. Will take some of that cost yourself and reduce your margins and pass some of it along, or will you be raising prices once this is all settled? How do you navigate?

[Philippe Desart]

Well, I think we're dealing already with it for the last two months with 10% instead of 15%. So now it is 15%. I think it is good that if this is the tariff, that some rest can return. Because it was so uncertain that. Yeah, what do you have to do? I think, of course, I can imagine that in products that will come, new products that will come in any business, not only our business or the fabric business, but in any kind of business, if the product can handle an extra cost, companies are probably going to integrate it. So we have to See what will happen. I think I worry maybe a little bit more about what's going to happen with all the other companies. Countries we know China is 30%. Vietnam, they talked about 46. Is it now going to be 20? What will it be? Will it be. Because our portfolio of products is. It's coming from Europe, but we have a big portfolio of products created by a variety of countries because we develop everything, we design everything. But we work with a lot of good companies, companies that create what we ask them to do. And then we buy, of course, the inventory, but it has the origin of that country. If we do not really change something to that product. It's not like when you buy yarns. Maybe when you weave, you can say, we created a different product. But if you buy a wall covering and it comes here, it still is a wall covering, and not just because we add a print that the origin is going to change.

[Dennis Scully]

Well, and has that caused you to make a lot of changes within the business? Have you changed your supply chain? Have you changed your shipping operations?

[Philippe Desart]

No, I think the pressure of creating products where the perceived value is in balance is more or higher than before. Because I think people want to pay more for a product, but you also need to get something for it. If you buy something, something and you think this is overpaid, and you go home and you think, shit, what I bought, it was too expensive. But it also can happen that you buy something and you see it on your wall, in my case, that you might think, oh, I'm happy with my decision. And you forget about maybe the price that you paid for something. So I think it will be important for all companies to make quality and good and beautiful products, products. Because prices are not going to go down in the future, I think.

[Dennis Scully]

So the product has to be even better.

[Philippe Desart]

Yes, right.

[Dennis Scully]

Because.

[Philippe Desart]

And that's not easy. It's not easy. And the simple products are mostly the most difficult ones to make. A beautiful plane. How can you be very different? But everybody, a lot of people are using planes. So you have to be very innovative in color, in design, in construction, and surprise people.

[Dennis Scully]

I'm wondering, Philippe, as we wrap up, one of your hats is a marketing hat. And I'm curious, you were talking earlier about you hope that people will get to a showroom, see the product, understand the brand, and then come to the website and start to interact in that way. I wonder what is worth working for you from a marketing perspective? It seems marketing is more challenging than it has ever been. We used to put an ad in Architectural Digest and that was our marketing campaign and that was good enough. Now it seems social media, as you mentioned earlier, plays such a huge role, but also entertaining designers seems to be a huge component of marketing efforts here in the States. How are you thinking about it?

[Philippe Desart]

It became a. And, and, and, and, and you have to do social and you have to entertain and you have still have to do print media. Not anymore in all the magazines. I think you have to be very. You have to think a lot about your strategies. What are you going to do? Which magazine? Why? The same on social media. What are my targets? Who is my audience that I want to go to? What kind of video do I need to make? What kind of photography? Because all that is also new. Five years ago we did things, but today you have to do things different because it's all about. I do not agree that it's all about clicks, but at least when you look at something, it needs to do something to you. You know, you see something and you say oh, and it stays in your mind. If it does not nothing, then it's a waste of time. So the challenge is what is the right image, what is the right video? So you have to analyze all the things that are happening on the social media and learn from it constantly. Learn, learn, learn, learn. Develop new applications. We talk about AI for me also something difficult, I think in the organization AI is maybe more easy than how am I going to use it with a design designer AI on my website. In what way? How that it is still and that is something that I always try to keep in mind that things still stay high end. Maybe you do not give the possibility that they can view a product in their environment if you're not sure about the look of the result. Result, because sometimes a beautiful product in not such a nice environment or setting can be an ugly product. And an ugly product in a good setting can be a better looking product. So sometimes it's better to leave the dream and to leave it up to the specialist, because I can make a photo. But maybe the designer says this is not the way I'm going to use the product. So my photo has already no effect anymore. But it can help him to understand it. And if he says oh, but they not they did a nice setting and it inspires him and I think we're doing a good thing. You can measure everything, Dennis, you can measure everything and at the end with all the figures, you don't even know anymore what to do. Sometimes you have to go in the market, feel things. That's what they call Entrepreneurship and do something, believe in it, and then you measure it. But you can measure a lot and then maybe what are we going to do now? I think it's also important to be in the field, to listen to the people.

[Dennis Scully]

Well, as you say, you can generate a lot of data, but what do you really do with all of that?

[Philippe Desart]

I think that is also part of being. Make good analysis with your teams, talk about it, what do we really need? And then it will definitely help you, I think, in what we are doing, color wise. But again, if you're going to do that, it's going to be what? Beige, beige, beige, beige, beige, beige. Are we going to make the only beige products? No, we cannot. So we have to balance it out and bring in the color. Although we know sometimes these colors are not going to sell like it should. But it's part of the package.

[Dennis Scully]

Well, Philippe, you've got your work cut out for you, but you've, you've taken the bold move. You've opened a showroom at the D and D building. Now, how long at least did you sign? You do five year lease.

[Philippe Desart]

I hope a three year. So we can make an analyze. But to be honest, I'm very happy because I'm happy that we can show who we are to designers and that they get inspired and that they can work with our products. That, that is then my dream will come true and my father's.

[Dennis Scully]

Well, I'm certain that they'll be impressed with the showroom because it's an impressive space. And so I, I hope that does lead a lot of designers to discover you. And I wish you great success because I know that that is an enormous investment and a big undertaking for you. You're so kind to make the time to talk and I really appreciate it. Thank you so much.

[Philippe Desart]

Thank you very much for having me, Dennis.

[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 any going on in the industry that might have caught our eye. Fred.

[Fred Nikolas]

Stephen Colbert caught my eye this week, Dennis, and not for the reason you think I was. Was watching the, some clips from the show online, as I tend to do it, as I'm sure the show does not like me to do. And there was a little shout out to Kelly Werstler. We've already played like 17 clips on this episode, so I'm not gonna dig it up. But Colbert was sort of making a joke about interior design and he referenced Kelly Werschel. I just thought that was really funny and just shows how much she has really crossed over from being like an industry celebrity into a celebrity that gets dropped in pop culture environment. So I thought that was just very tickled by that. The other thing I noticed is food 52, which we talked about a lot over the past months. You know, they're really pivoting away from food 52, frankly, and towards, you know, building up Schoolhouse into. Into more of the center of their world. And I've noticed that they've posted a lot more stuff to their Home52 Instagram account, which I think they started a while back, kind of left let dormant for a little bit, but that is definitely an area of focus for them. So just another sign of, you know, the continued shift over there away from being an online marketplace and more towards being, you know, Schoolhouse Plus. So that was interesting to me. What caught your eye this week?

[Dennis Scully]

Couple of things. First of all, sub the sad news of EJ Victor officially deciding not to resume operations. I think we had a sense that this was likely to happen. We talked about EJ Victor in past shows. Unfortunately, they experienced some of the North Carolina floods that happened, and they were waiting on an insurance payment and there was a big settlement. And unfortunately, while they were waiting for that settlement, they lost a lot of their customer base. And so they decided to officially announce that they will not be resuming operations, which is, which is sad because that was a. That was a great brand. But. But hopefully the people that were involved can, can move on to the, to the next thing. The other thing that caught my eye, interestingly enough, we. We just had a new. And this is going to get nerdy, Fred, but we just had a, a new GDP number out and, and it was very strong. But the Wall Street Journal editorial board wanted to make sure that we understood exactly why it was so strong. And they actually wrote a headline, which I loved. The weirdest GDP report ever was the headline from the Wall Street Journal report. And the reason the number was so strong. You don't think that Trump's tariff announcements are having any big impact. They said, well, guess what? Imports during the last quarter actually decline declined by over 30%. That's right, Fred. And you'd have to go back to the Great Depression to find a period of time and that happened over years where imports were lower by more than 30%. Not even during COVID or during the great financial crisis did imports fall that dramatically. So it was, it was all that inventory that everyone bought in the first quarter. And then because they had bought all that inventory. Guess what? They didn't import a darn thing this last quarter. And that's why the number looks deceptively strong. So obviously tariffs are having a huge impact. And seeing imports falling by 30% tells you how big an impact the tariffs have really had.

[Fred Nikolas]

See, that's why I have to stick around for the end of the show here. You don't get these nerdy tidbits if you turn it off after the interview.

[Dennis Scully]

Exactly. You miss the nerdy part and you don't want to do that. All right, that's all the time we have today. Thanks so much for listening. If you want to keep up with the latest news, browse job listings or take a workshop, visit us [e-mail] if you want to get in touch with the show, write to [e-mail] this episode was produced by Fred Nicholas 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.