The Thursday Show: Is home the new fashion? Plus: Matouk's CEO on how tariffs are impacting his US factory

25:29And I hope that pieces in the home have a different kind of significance and a different kind of feeling to them than perhaps your fashion wardrobe. But I don't know, says someone who's actually quite emotionally attached to his fashion wardrobe. So I don't know. I'm sort of talking out of both sides of my mouth there, Fred. I'm not sure where I'm coming down. Well, I'm good at neither of those things. I can neither pull an outfit together nor a room. I actually think, honestly, I feel like home could even be a little bit more like fashion. I feel like brands need to make products that are instantly recognizable and need to get people really excited about them.

26:08And I am a little bit more kind of like foot on the gas pedal when it comes to stuff like that. So I maybe take the other side of this here, although I'm definitely not a fan of the luxury logos on upholstery. But I think that coming up with a signature look for a home product is a real challenge. And very, very few people have been able to pull it off. And I think that making home cool to me is an admirable goal. This made me think of a post that I saw from our friend Dan Rosen recently. There was an Eames chair, an ottoman, and then above it was a Noguchi paper Japanese lantern. And Dan Rosen said, I don't know where they got the idea for this.

26:50This is so innovative. I've never seen this before. And I think that my fear, to your point, is that some of these pieces become so recognizable that they become a turnoff for people because we feel that we've seen them again and again. And particularly, as we've talked about recently with with Instagram, making us feel that we're being served up the same images, the same looks over and over again. And often that's the that's the knock about our friends at RH as well, that they're they're serving up the same kind of look and feel again and again. So it's I don't know, it's a it's a double edged sword and the recognizability is great.

27:33But also, is that what you want? I'll say this. I thought that was hilarious. I would imagine most Americans would look at that Instagram story and be like, what is he talking about? Like, what's that chair? You know, what's that lamp? Like, I think it's a cliche within a very like a rarefied world. And I think we happen to be in that world. And so we noticed that. But I think if you pulled people off the street, almost no one would understand what Dan was talking about, as funny as it was. And so I agree. There is a danger, but I think we're just a long way to go. But the fact that we've got Eames, RH and Dan Rosen into the same item, I think is a win.

28:06So we're doing well on the Thursday show here. Exactly. We've done our job on the Thursday show. All right. That's it for the news, but there's plenty more to check out on businessofhome.com, including a roundup of the latest industry hires and leadership advice from design business coach Gail Doby. We'll be back in a minute, but first, a quick break.

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29:48And we're back. I'm joined now by George Matuk, the CEO of his family business, Matuk, the luxury bed and bath linen company. George, great to have you. It's great to be here. Thanks, Dennis. Thanks so much for making the time. I'm eager to jump in and discuss the op-ed piece that you wrote for the Wall Street Journal about tariffs. But before we get into all of that, I want to tell people a little bit about Matuk, your family business that's been around since 1929, if I recall. That's correct. My grandfather started the company in 1929. He was an immigrant from Damascus, Syria, and learned about the textile business on his way to the United States via Italy.

30:33And he started the company when he got here. And I joined the company in 1997 after finishing an MBA at Columbia University. And I'm the CEO. And my wife, Mindy, is the creative director. And she does all the incredible stuff. And I do all the boring things you can do in Microsoft Excel. Got it. Okay. Well, I understand Excel is going to get a lot easier thanks to AI. So I hope that that's going to make your job easier soon. Well, yeah. Okay. Four-day work week for me coming up. Good. I wish that for you, George. Thank you. So tell me about the business. Give us an idea of the scale of your business, who you're selling to, and what your product offerings are.

31:17Okay. So as you know, we're a manufacturer and importer of luxury bed and bath linens. We have a factory in Fall River, Massachusetts, where I am today. We employ 300 people here. And our customers, like a lot of home furnishings people, are in multiple channels. We sell directly through matuk.com. We have a flagship retail store in Manhattan we call the House of Matuk. And we also sell to independent retailers around the country. We sell directly to interior designers. national accounts, primarily Bloomingdale's, and then a series of luxury hotels. As you and I have talked about in the past, a lot of this kind of manufacturing, this business, the American textile industry largely, went overseas at various times in American history.

32:13You made a conscious decision to try and make Fall Rivers work for you. Tell me a little bit about that? So, as you mentioned, the textile industry has been dismantling itself in the United States for decades. And we are not creating fabric. We're not a mill. So, we're an assembly operation. And the fabrics that we depend on are produced overseas, primarily in Italy, Portugal, in India. We bring them here to cut and sew. And what we found early on was that we could run the manufacturing operation here profitably and with a certain competitive advantage as we gained access to the world's greatest materials that we produce with our partners overseas.

33:05And bed linens require a lot of fabric and maybe less labor than traditional textile categories such as apparel do. So that calculation enabled us to be competitive with overseas manufacturing in the luxury space. And further, we're able to use that manufacturing to create all kinds of customization capabilities, which we're known for and can deliver in a more meaningful way than our competitors who or have to ask other people to make their products for them. So all of that put together is made for a great growth story for Matouk. In the late 1990s, we had 30 people in our manufacturing plant here.

33:52Now, as I mentioned before, we have over 200. It's much more sophisticated. It's a more modern and enlightened facility. We pay living wages and have great benefits. And so, yeah, we're really proud to have been able to build this thing over time and use it to the benefit of our customers. And coming into this year, how has business been for you for the past few years? I get the sense it's been pretty good. Overall, it's been good. As with most home furnishings companies, we exploded in demand during the beginning of the pandemic, 2021 into 2022. And then the business slowed down quite a bit as people started spending money on other things.

34:33There was a big inventory adjustment, but thankfully we were able to hold on to our gains from that period. And then in 2024 and now into 2025, as we kind of rebuilt our strategies and resources for the next stage of growth, we've resumed growth again. And I would call it very comfortable 10 % to 12 % type of revenue growth, nothing astronomical, but definitely robust enough to keep everybody busy. And then April of this year came, this Liberation Day announcement from the president about various tariffs on different countries. And I'm wondering how you experienced that and what started to happen in your world.

35:18Well, I never imagined there would be punitive tariffs on doing business in countries that were considered our allies at the time. And that was a misjudgment myself of what was the strategy of the Trump administration. So I have to take responsibility for that. I thought we were talking about tariffs, punitive tariffs in China, other hostile countries. I just never imagined in places like the EU or the Philippines, India, countries where we'd been building positive relationships or trade areas like that for decades, that we would be kind of going to war industrially with them. And so that was a big shock when that happened.

36:08When everything was postponed for 90 days, and we went to a 10 % universal tariff rate, it was something that we were able to absorb. I mean, it was costing us tons of money, but it was something we felt like we could absorb and not disturb the marketplace until we knew what would happen long term. And that's where our second miscalculation came in because we assumed that in August, the worst thing that would happen would be that those 10 % reciprocal tariffs would stay in place. We did not imagine things getting this much worse. And so we've been going through another period of re-strategizing from a pricing point of view to respond to this because the financial penalties are too great now for us to continue to absorb.

36:53Right. So, I mean, specifically the outsized tariffs against India, which are about 50%, if I understand correctly, yes? Yeah, that's correct. So India is the most intense area of concern for us because there was a 25 % additional reciprocal tariff and then another 25 % penalty tariff on top of that, making for a 50 % additional tariff on top of tariffs that we were already paying according to the HTS code of around like 8 to 10 % on everything we're doing there. And what we'd buy in India is fabric for a manufacturing facility here. So it's really punishing to us to have to pay tariffs like that on material that we're buying to create jobs here in our factory.

37:43And then further, we have a large supply system in India for our hotel bed linens. And that's a very price competitive market and the tariffs are causing us a lot of concern for that as well. And as far as how the tariffs actually show up for you, there seems to be some confusion out there about who is paying the tariffs or when the tariffs actually occur. Help me understand when a container or shipment, you tell me how it comes into the country for you, when it arrives, is that when you're having to come up with the money for whatever the tariffs are at the moment? Yeah, that's correct. It's pretty straightforward.

38:26A shipment arrives at a port of entry, let's say the port of New York, if it's a boat shipment. Our customs broker receives that shipment, files of paperwork with the government saying what's the value of what we're bringing in and what are the various tariff codes that are associated to those products. And then we have to pay the government and I don't know, 10 or 15 days, the tariffs on those products fully paid by the importer at the time of entry into the United States. So 100 % born by us. And so none of the companies that you're working with that are suppliers to you, have any of them come to you and said, oh, listen, we understand there are these tariffs, you know, we'll meet you halfway or we'll adjust prices for you.

39:12I mean, has that happened? And we have amazing suppliers that have worked with us, and certainly some have offered a certain amount of collaboration here. But we're not talking about halfway. We're talking about 2 % or 3%, maybe at the most 5%, nowhere near what the penalty is that we're paying to the government. And this is a big misperception that was put forward by the Trump administration. It's like, because in the textile industry, which is intensely competitive because textiles are made in every country in the world, they all want to sell in the United States. So producers in an industry like this operate at extremely low margins.

39:55There is no ability for suppliers to absorb these tariffs in any significant way. And at 50%, the tariffs in India, for example, I mean, unsustainable. I'm assuming. I'm imagining you can move things around to just margins or what have you, to your point, for a little while, but you can't do that for very long. Yeah, that's right. I mean, we will find a way to survive. The companies survived the Great Depression and the financial crisis and COVID and all of this other stuff, but we have to change the price of our products in order to incorporate this humongous additional tax that's been put on us by the government.

40:39And that has different levels of impact in different ways. And some people might say, oh, yeah, you're Matouk and you sell a luxury product. Your customers can afford a price increase. And for the most part, that might be true. But there are other parts of our business, particularly the commercial business, hotel, and other commercial customers that are extremely price competitive. And it is not easy to pass on price increases in business relationships that we've, in some cases, spent years building. So it's challenging for us to increase prices according to the channel that we're operating in.

41:22The notion that the tariffs are in part designed to bring more of manufacturing and more of the supply chain back to the U.S., is it your feeling that there are products in the U.S. that you could be sourcing that are in any way comparable to the Italian linens, the Indian materials? I mean, what's your sense of that? I think that that idea is untenable. We are only buying things and producing things in different parts of the world because they're impossible to produce here. Otherwise, we'd be making them here. And so it makes sense for us to partner with experts around the world to make great products that consumers want to buy.

42:14And the more successful we are in that way, the more it benefits our U.S. employees as we can use those profits to grow the brand, to make investments in our plant. We're planning to put a huge solar system into place next year that would make our entire operation net zero from an electric point of view next year. I mean, these are things that require capital and our successful imported products help to subsidize that. Not to mention, we're 100 % dependent on imported fabric for our manufacturing operation because there are no mills in the United States that make the kind of fabrics that we need.

42:59And there never will be because there are no customers other than Matuk here, basically. you're the only one that wants it yeah yeah yeah so we're not going to ask we don't expect fabric mills to appear out of thin air to supply us it's ridiculous and to be honest with you Dennis like and this is something people don't talk about is that the world doesn't need additional factories in any industry that it doesn't need all that does is increase capacity which reduces profits and puts companies out of business. So I find the whole idea of this crazy. And then there's the other side of it, which is that any manufacturer, and there still are many in the United States, knows that it's very difficult to find people to work in our factories.

43:50There is a labor shortage already. So the idea that we should be building new factories that the world doesn't need and that nobody wants to work in makes no sense at all. Well, and I'm glad you mentioned that because I was going to ask you, there's this perception that the labor market has shifted somewhat and that it's easier to find labor or that labor doesn't feel like it has quite the upper hand, perhaps, that it had during COVID. What's your sense of that? My feeling is that that is true in the overall labor market, that conditions have shifted a little bit. There are more people looking for work now than probably any time in the last few years.

44:32But that does not alleviate the challenge of finding people who are looking for work and are willing to work in an industrial environment. It's a small subset of available labor that's willing to do that or have the skills to do that. So the challenges that all of the manufacturers face, and it continues now, is finding people that have the right skills and have the will to work in an industrial environment. It's just challenging in 21st century America. And do you think that we've made a mistake in this country? We've talked a little bit about this issue on the show with regards to the upholstery business, for example, or some of the business that the president recently seems to have shifted his attention to North Carolina and the furniture makers there.

45:26Somewhat less so South Carolina, he said, but definitely North Carolina is very focused on. Okay, yeah. But again, this idea of have we done a good enough job of making an upholstery or a furniture making job or to your point, the people that would come and work for you in Fall River seem like a desirable enough job? Well, I think that that's a legitimate point to consider, which is that, you know, you can't run a sweatshop and then complain that people don't want to work there. So, manufacturers like Matuk, I think, have an obligation to create enlightened, desirable, and productive, and efficient, but also humanistic workplaces that people want to work.

46:13So, if you came to Matuk, I think you would find that it's different than Matuk looked like 20 years ago, and it's different than most factories look like now. But that's only part of the challenge. The other challenge is really, okay, well, once you have all of that, who wants to work in your factory? And are there enough people in your community to do that? And factories from the beginning of time have been meccas for employment for first-generation immigrants. And we're welcoming fewer first-generation immigrants into this country at the same time. And that compounds our labor problems as well.

46:55I'm wondering, George, so the Wall Street Journal op-ed piece comes out, How Tariffs Hurt My American Factory. You and I spoke before we came on the air. Lots of support in the comments section of the Wall Street Journal perhaps feels a little bit unusual for you to experience that. that. I'm wondering, though, if some of your peers, some of your colleagues in the industry have seen this, have reacted to this, if you've had communications recently with them, and what you feel the community is saying about all of this. Well, first, I should say that the Wall Street Journal is an amazing publication.

47:34And even though Mindy and I laugh about the fact that we're in agreement with the Wall Street Journal's editorial page much more now than we ever would have imagined. It is a fact that they have been very supportive of free trade and critical of the trade war. And so I was planning to write a post on LinkedIn about the situation that just gotten to the point where I felt like I had to say something. And I wrote the post and I shared it with Mindy. And we agreed that actually there were things that I was saying that maybe a wider audience or different audience would want to read about. And so I reached out to the journal and I submitted it and they seemed interested and helped edit it a little bit.

48:22And yeah, before I knew it, it was published. It was all pretty cool. Yeah. And there's been a lot of support today since it was published. And I try not to read the comments closely because I'm afraid of what I would find there. But my understanding is that a majority of the comments are actually supportive of what I wrote. And that's, I think, validating, but also telling that there are a lot of people who feel the way that I feel about this and are not speaking up publicly about it. And I hope that that changes. I agree. And like you, I have found myself surprisingly in agreement with the Wall Street Journal editorial board in recent months, much more so than I can ever recall, which I think just sort of speaks to this sort of crazy time that we're in where so much is shifting and our perception of what different political parties stood for or even what sort of American capitalism stood for and was all about.

49:26And we certainly, your family's business started in 1929. My family's business started in 1934. Smoot Hawley was something that was sort of so burned into the psyche of our grandparents and the founders of businesses that started any time during the Great Depression that we thought this was a conversation we'd never really have to have again. I know it's an interesting time that we're living in, and I actually think it's healthy in a lot of ways. to question your assumptions and the things that you've believed for a long time. And because there are certain things that we probably came to think of as, as being unquestionable that, that, that should be questioned.

50:10And, and a vibrant dialogue I think is really important. And I would, I would love to have a vibrant dialogue with people who are making trade policy in, in Washington, because I think that they need to hear from people like Matouk and other great manufacturers in our industry, but they also don't seem all that willing to listen. And that's part of the challenge in trying to get your point across. Yeah. Well, I mean, again, I commend you for getting it into the Wall Street Journal and getting that voice out there. And I think a lot lot of people will hear that. Not to mention, George, the vast audience of the Business of Home podcast that will now, I mean.

50:54Of course, of course. My DMs are going to be overwhelmed after this. I don't know what I'm going to do. You might need to go into witness protection because you'll just be so overwhelmed by it. That is possible. But I know that a lot of people will be reaching out. And listen, I mean, I think you're absolutely right that we have to keep an open mind. And I would love to think of the benefits of American manufacturing or more opportunities being created. We've grown a little bit concerned about what actually might happen to the workforce in the coming years with where technology seems to be headed.

51:31And so I would love to think that there were manufacturing options or other kinds of work that could be created. It certainly seems that we're going to need that. Yeah, I think sometimes you're surprised at the outcome of something that happens. And people assume the jobs are all going to be gone because of AI. And you just don't know it. And this is a really resilient, innovative, incredible country. And there's a spirit here that really doesn't exist anywhere else. People always talk about American optimism when you're speaking with vendors around the world, that there is something really different about businesses in the United States and the people who grow up in this environment and set out to have an inspiring, successful career.

52:22And I believe in that we're going to come out of all of this in a really great situation. Having said that, there is no reason to do damage to what so many companies have built without any regard for the consequences. That kind of destruction is not creative or helpful. And I think we're going down a path right now that's just getting us nowhere. And it would be great if we could all get back to being creative and innovative and solving exciting problems rather than responding to the tariff policy of the day or the hour. And when you saw the headlines about the court ruling that suggested that the president might have overstepped his authority and that these tariffs might be illegal in some form?

53:19Were you hopeful that maybe this would be undone? Could you imagine getting some of the tariffs that you've paid back? I mean, did all of that run through your head? Well, I'm thankful that there are people that are actually trying to fight in this way that have taken this case to the trade courts and are having success. So I want to say that, that that's brave and I appreciate that. And all of the businesses who are affected by this should be thankful. Having said that, I mean, you know, we're not counting on anything. We know that the Supreme Court has tended to defer to the executive branch in ways that would have been unpredictable or unprecedented since the second Trump administration has started.

54:08So we don't have our fingers crossed that everything's going to work out okay, and we're going to get all this money refunded, to be honest with you. We're really more concerned with moving forward in a meaningful and productive way. We hope that that could all be possible without any court challenges and Supreme Court rulings. Yeah. Well, I think that's everyone's hope. So we certainly are with you there. George, I want to thank you so much for making the time to talk about this. I'm sorry for how all of this has shown up for your business and what it's meant. But I'm sure that everybody listening is hoping that this will quickly get resolved.

54:47Thank you again. Thank you. It's a pleasure to be here.

54:54And we're back. We're getting to the end of the show here. But before we go, we'd like to take a second to highlight anything going on in the industry that might have caught our eye. Fred, what caught your eye? The media caught my eye, as it often does this week. Two things. First of all, I noticed that Sight Unseen, a great design newsletter for the cool side of the design industry is where I think of it. It's been around for like 17 years. I was kind of blown away by that. But they recently announced that they're going to be sort of revising the format. And it sounded a little bit like reading the announcement that it's going to be a little bit more kind of sub stacky a little bit more like personal direct kind of newsletter-y which I think is cool and you know I love what Jill and Monica put together so I'm excited to see what they do in their next iteration so certainly check outside and see what they're up to in their next next chapter I also noticed and this is maybe more sad news is that Architectural Digest used to have like a sub brand called Clever which was like kind of their youth design leading site I I don't know, what was the best way to describe Clever?

55:57What was it, Dennis? What was Clever? Exactly. What was Clever? Was it sort of for the apartment dweller? Was it for the younger generation, right? That's what I sort of felt it was. AD for kids. But honestly, I actually really liked Clever. I thought it was very smart and sharp, and they had fun articles. But AD has kind of wound it down sort of unceremoniously. I think it's actually been, you know, I guess turned off for some time at this point. But I just noticed it recently because I went looking for a Clevver article and they pulled it down. And now, you know, now that content, I think, is published on ad.com.

56:31So I don't, you know, maybe this is another investigation I can do that delves deep into the history of Clevver. But, you know, I was sad to see it go. I'm sure it makes sense from their perspective. But I really like Clevver. And so R.I.P. to Clevver. It was funny because when Clevver was first launched, people said R.I.P. to A.D. Like everyone was so upset that they were launching something like this. And they thought, this is sacre bleu. How did this happen? So sort of funny to see it quietly and sadly, perhaps, Fred, go away. Yes. Well, what caught you on this weekend? Well, as you know, I'm always on the lookout for a Charles Cohen real estate deal.

57:08And sure enough, there is another one, as again, the effort to raise cash continues. This time he's selling a second building, 3 East 54th Street, reportedly for$188 million. dollars, although he doesn't own the full control of this building. But it came at a time, Fred, where there were a couple of interesting announcements regarding sort of commercial real estate in New York, one of which was that Manhattan office leasing is on track to hit the highest volume since, wait for it, 2019. Yes. And you and I were talking just before we came on the air wondering what are some of the big cities where return to office is actually at sort of pre-COVID levels.

57:56Well, you know what the big city is? It's New York. It turns out in July of this year, there were actually more swipes into offices than in July of 2019. So New York is having a major comeback. and there's a sense that a lot of big people, the big Norwegian fund is investing in Manhattan real estate. A lot of people are looking at Manhattan as being on the comeback trail. So maybe Mr. Cohen will have an easier time offloading some of those buildings. But as we were talking about before with Cubicle Chic, it sounds like you and I aren't going to enter the office, Fred, but it sounds like lots of people are.

58:40Well, yeah, about that. I'm comfortable here. I'm going to stay uncubicle, un-chic here in my home office. You're good where you are. I'm glad. All right. That's all the time we have today. Thanks so much for listening. If you want to keep up with the latest news, browse job listings, or take a workshop, visit us online at businessofhome.com. If you want to get in touch with the show, write to us at podcast at businessofhome.com. This episode was produced by Fred Nikolaus and Caroline Burke and edited by Michael Castagneda. I'm Dennis Scully. Have a great weekend, and we'll be back with you on Monday.