The Thursday Show: Kravet sells. Plus: Lindye Galloway's new brand

25:19And if it's 97 ,000 square feet, you very quickly feel like you might have seen it all. It's a huge risk. These stores are an enormous risk at a time where RH carries a heavy debt load and has a lot to prove. And Gary Friedman has told us that business still isn't so great because things aren't moving the way they'd like to in the high-end housing market. So I think they've got a lot to prove. The only thing I will say, as I said earlier, is this store makes a lot more sense to me than RH England or the European expansion. That market looked like it could absorb an RH like this and really make it work.

26:00And the stock popped right after the opening. I mean, it's hard to exactly pin it to it, but maybe some investors had some good caviar at the event and went home and bought some RH stock. Well, exactly. And those parties, I think, make you feel like, yeah, this guy knows what he's doing. And so, I mean, they're weeks away from opening their own design firm in Palm Springs, and they've got other big openings that they're focused on. So there's a lot of big news that's going to be coming out of RH. Again, do they have the liquidity to make it all work? If there's the one thing that I would focus on on the other side, it's they're very stretched financially, and they've got a lot going on.

26:40All right. That's it for the news, but there's plenty more to check out on businessofhome.com. including a feature story on furniture banks and advice from Sean Lowe on setting healthy boundaries with clients during the holidays. We'll be back in a minute, but first, a quick break.

27:04We're taking a quick break from the show to remind you about Anthem Plus Smart Showering, only from Kohler. With Anthem Plus, you can design a showering escape that commands up to 12 water outlets, supports custom lighting environments to match any mood, and allows for three levels of soothing steam set to music from personal playlists. Every moment asks the user to imagine, when you take a shower, where does your shower take you? Explore Anthem Plus smart showering at Kohler.com slash showers. And now back to the show.

27:49And we're back. I am joined now by Lindy and Wynne Galloway. Thank you both for being here. Happy to be here. Thanks for having us. Thanks, Dennis. Well, I'm delighted to have you here. And it was so lovely to see you in Newport Beach recently, which we're going to talk about in a little bit. But before we jump ahead to all of that, I wanted to explain a little bit about your design business, which also became an e-commerce business and has recently relaunched and rebranded. So Lindy, where's the best place to start, do you think? So 10 years ago is when I started our design studio. I was in the wedding and event world and decided that I just needed kind of a change, but I wasn't sure what that change was.

28:31but we ended up having our first child. So that was one big change. And I'm at the hospital and I'm giving birth to our first child. We're getting a lot of detail here. Okay, yes. Like, yeah, being a brave woman. And he's on Zillow looking at homes. As a way to relax. I understand, sure. It's an escape. It's a tension breaker. Okay. Except none of it's true. It's all true. A few weeks later, we find ourselves with a fixer-upper home needing quite a bit of work. And I had no background or schooling in interior design. And I thought, hey, why not just jump into this? So I started doing it. Now I was designing our home on a shoestring budget and we took it back to the studs and I was figuring it out as I was going, but I was also posting it on Instagram, apparently making it look like I knew what I was doing.

29:22So as soon as our house was finished and I started posting, it ended up getting some features. And then I had a couple people in the area reach out and say, hey, would you design our home? And I was like, I looked at Wynn and I'm like, looks like I got to get some business cards printed because I had nothing. And I was like, yeah, totally. But I think they were willing to take me on because I was charging about$5 an hour. And my inexperience may have shown through a little bit. But that's how the studio side got started. I had a couple of really amazing clients to start, I've always focused on doing the whole home and being able to do the finishes through to the furniture.

29:57And ultimately those couple of clients that I had got picked up in features. It was sort of like hard work meets amazing luck. And I started just getting more and more clients from there. And for the next five years, it was me growing the business, bringing on employees, figuring out how to do the actual business side along with the creative. And then at five years is when Wynn came into the picture, which is also when we decided that we wanted to start an e-commerce side of the business as well. What led to wanting to launch the e-commerce side of the business? Lindy had this idea that let's take all of kind of the vendors and the profiles and the pictures that we have, and let's find a way that maybe we can sell some furniture.

30:36And I think this kind of became a trend in the industry in 2019, 2020. So I immediately just decided, yeah, that sounds like fun. Let's do that. and we set off on this journey of starting an e-commerce business with really no background, no expertise in what it takes to start an e-commerce business. And we built that up. It took about nine months to launch the shop. And then we launched in July of 2020, which was, many would say, great timing. We were able to get a lot of attraction right away. The dream was always actually to launch this with our own furniture and our own collection of furniture, as well as work with some of the traditional dropship partners.

31:19But COVID had a little bit of a say to that. It was quite difficult to produce furniture during that time. So COVID made it difficult to design and produce your own line for a time. Yes, that was the big issue? Yeah, I mean, material, shipping, I should say logistics, demands. we did launch our own small collection of furniture that was made in Indonesia in a factory there that's owned by a local kind of furniture maker here in LA. And they partnered with us pretty early on. And, but it was very difficult just to get that here with all of the shipping and timeline lead time delays. We also found once we launched our own product that, Hey, people are actually kind of interested in the things that Lindy's designing.

32:06and this is the stuff that they're buying the most. And we rather quickly realized if this is actually going to be a thing, we need to figure out how to make this furniture really well because the drop ship stuff, it became, we noticed a trend kind of during COVID where you saw a lot of designers actually start their own e-commerce shops. And all of a sudden it became, oh, there's a lot of different options and a lot of different places to buy the same furniture. And so we really realized we need to differentiate ourselves and we need to figure out how we can take unique designs that sort of reflect the quality and the style that you see in our studio business and then bring that to more of a mass audience.

32:47And so that was really the goal and the aim. It just took a while to figure out how do we do this really well. But we've got some great partners now and it's been really exciting to see that side of the business grow. Well, Wyn, I'm curious, and I want to hear about the great partners. We joked about the two of you not having a lot of experience in e-commerce. How did you get up to speed, and how did you learn what you needed to do to launch the business originally? Did you reach out to a partner? Did someone befriend you? How did it all come about? It started with a spreadsheet of just trying to break down what are the core elements of this?

33:26and it's traffic, conversion, what do you think the average order value is going to be? And from there, you can sort of build out, okay, how do we do this? That's sort of the basics. And then Lindy had to figure out what is the assortment of the pieces that we're gonna have on site? What do we wanna sell? When we first launched, we were selling a lot of decor. So a lot of smaller items, lower average order value. And now we're really leaning towards furniture. And so our average order values climbed quite a bit, but our conversions dropped. And so you start learning all these pieces and then you start learning about advertising through meta and Google and how do we break through the black void of the internet?

34:08And you really just kind of grow and your expertise grows. You learn the language and then you find good people that are operating businesses that are similar to you and you just ask questions. And I would say that that's been the journey is just being fortunate enough to find people that can really give us advice. And then we've always really been very, very insistent on changing things quickly. And that's the great thing about being a really small team is we can make pivots really fast. So yeah, change as quickly as you possibly can and lean on as many people as you possibly can. Well, and as you were just saying earlier, when during COVID, a lot of people jumped on the idea of having an e-commerce platform of one kind or another.

34:56And Lindy, if I recall, you had built a rather sizable social media following and that I assume was a very helpful tool to getting the word out for what you were doing online. Tell me about that. Yeah, that was such a huge piece. I mean, at that point, I had already built up so much trust with the people that were following us. I'd already built up a platform and followers that were familiar with what we were doing on our studio side. And we had really already given them the vision and cast the direction of what we offer and what we do from a style perspective. So naturally, there was already a lot of people that were DMing and commenting, where can I get this?

35:33Where can I get that? And obviously, we have a lot of trade vendors that we use that aren't accessible everywhere. But we really saw kind of that opportunity, again, in the beginning to really try to kind of expand what we were offering to really meet those people that were like, hey, I love your style. I want a small piece of it. can't afford to have the whole thing. I'm not building a home, the whole shebang, but how can I have a hutch that feels like it encapsulates what you do with your studio, that feels like it has that heirloom and that connection and that feeling that can be brought to my home?

36:06So our platform was huge. I don't think that someone starting now, if you've got zero, I mean, that is just such a larger uphill battle. I will say this. We now have an Instagram account for LeMay, which is what our furniture brand is called. And the hustle that it takes to build that account now is shocking. I'm like, wait, why aren't 100 ,000 people following me in two days? What's happening here? And so I feel like I've gotten to experience that side of it. And being able to leverage our social media following on our Lindy Galloway account was huge. What is your experience about what happened between when you first built your social media following and now trying to build this new following for LeMay and what's different?

36:50You know, I would be so curious to see what tech people would say, but I feel like for me, there was a simplicity that existed in the beginning. You didn't have to understand how to make reels and make all these things. There wasn't all this pressure to show up in a million different ways. The only way I had to show up in the beginning was posting once a week, one photo a week. And when you're starting out - Every week was all I needed. I'm raising kids and everything. It was such easy times to just be like one photo. And I think the challenge when you're starting out, whether it's an e-com or whether it's projects on a studio side, the biggest challenge you're going to face is having those photo assets.

37:29And now the big difference is we have to be putting our assets out in every single way from stories to feed posts to reels to TikTok. I still know nothing about TikTok, but our team, they're trying to keep me cool and young. And there's just so much content that you need now. And I think the original simplicity of it made it so much easier to grow than it is now, plus the algorithm and all of that. It feels like more of a guessing game these days. Yeah. Wyn, coming back to you, so you were originally banking on a lot of the drop ship available product, but suddenly got the feedback that Lindy's design work was actually what people were responding to, if I understood you.

38:11correctly. So tell me about the shift that that led to. Yeah. I mean, when you're running an e-commerce business, you're looking at the data. And when you're looking at sales data and you see that a large percentage of your sales are things that are not drop ship, but are only available through you, it sort of led us to this conviction of how do we do more of this? And so we started getting really serious about what that would look like as during 2020, we actually purchased a property in order to build our own home. And we said, this is a great opportunity for us to, in the process of building this home, telling the story of building this home, the highs and the lows, let's design a collection of furniture of, I think we had seven pieces that we're gonna take a gamble on as a small business and we're gonna buy 20 or 30 of each of these.

39:05Which sounds so little now. It does sound little now. But let's buy 20 or 30 of each of these. And then when we launch our house, we're going to say, you can buy this nightstand that Lindy designed for her house. You can buy this bench. You can buy this coffee table. And that was sort of our launching off point. And it took us a lot longer than we thought it should take to design a collection. We now know that that's just how long it takes. So the design process itself took you a lot longer. uh from creating the idea and the design to actually launching the piece physically is significantly longer than than we would would have thought yeah i mean i think that first piece took well over a year between when we launched it and then we launched it without even actually having the product here yet so people had to wait 30 or 45 days before they got the the shipment of the furniture.

39:58And so between designing, getting clear with the factory, getting a sample, making modifications to the sample, finally getting to an approved concept or an approved piece of furniture, and then getting the production run done, it's at least a year process. Yeah. I mean, just for some context, right now at this very moment, we have just wrapped up all of our spring 26 collections. So that's how, you know, now that we know a bit more about e-commerce and how production works. Now that we're so sophisticated, we know that of course we're working on spring 26. What else would we do? Of course. Talk to us a year ago, man.

40:40So yeah, yeah. Now it's, you know, we, you, you just so many things to figure out, but yeah, the production just takes a significant time. So when you're doing it for our house, we really had to learn what that process looks like and how long it takes. So tell me about the reeded texture, because that's what so many people point to specifically with regards to your line. And from what I'm told from the design community, it's having a big moment. It sure is. I mean, as a designer, I'm always trying to anticipate what's happening in two years, right? So I know that in two years, we got to find, and we are working on what that next reeded thing is going to be.

41:16But reeded is one of those things that I feel like allows pieces to still have a timeless feel, but have that character and that depth that wasn't offered before. I think now we're seeing it not only in furniture, but in, you know, obviously designs. We, you know, are doing it on cabinetry, hoods of ranges, and there's a lot of ways that it can be incorporated from wood to plaster to Roman clay. There's just so many applications that you can do for it. And I think it's one of those things that has this simplicity to it that also elevates a room significantly. And it's kind of like that quite luxury type of vibe.

41:50And I think that it's something that maybe even kind of gave a different perspective to what our design world could offer. And I think that's why it has had such an explosion in our industry because it adds just something different than say a white shaker cabinet would. So when, coming back to you for a moment, I'm wondering about the financial side of all of this? Because I'm sure that this required a sizable investment and some financial risk. Is the design firm helping to fund all of this? Or tell me how you're navigating it from a financial perspective. We are really trying to just, yeah, responsibly grow the e-commerce side of the business so we're not carrying a ton of inventory.

42:33But thankfully, yeah, we've been able to just kind of grow both at the same time and watch it work together. But if anyone would like to come in and offer$40 million for free. I'm open to it. Yeah, we'll take that. Yeah, we will take that. Okay. I mean, that was going to be my next question. I mean, are you at a point where you think you do want to take some outside investment or have you seen some of the experiences in this space and how often they haven't worked out too well that gives you a little bit of pause? But tell me how you think about it. Yeah. I mean, we are in a position now where we are starting to think about what it looks like to scale the shop at a much faster rate.

43:16And so I think you can scale things too quickly to the point where, okay, now we have way too much inventory and you can actually put yourself in a position where you're in trouble and you can't fulfill the demands that your clients are expecting of you. And so I think it's balancing those, but there is obviously an inflection point, one that we're probably reaching here sooner than maybe we even realize where outside investment, outside capital, but also outside expertise could be really helpful in helping us accomplish our goals. But when staying with the challenges of e-commerce for a moment, we have seen a lot of, so a bunch of designers got into it during COVID and then kind of backed out of it, realizing it's a lot more challenging or it requires a lot more investment or there were a host of different reasons.

44:05And we've seen some of the bigger e-commerce design-related sites struggle a bit in the industry for various reasons. As you were saying, inventory, one of them, cash flow, the money running out, whatever it is. What's your sense of why you think this is such a challenging business? And how have you been able to navigate it more successfully? I think one of the biggest challenges that I find, particularly in e-commerce when it comes to furniture, is two things come to mind. One, when you're buying a$4 ,000 dresser, it'd be really nice to be able to touch it. How do you trust that this is a quality piece of furniture?

44:47How do you trust that this is worth the investment without actually being able to physically see it? And the second thing is the consideration period of what it takes to buy a piece of furniture like that. we're not marketing a t-shirt on Instagram where it's a, you know, a flash in the pan sale where it's, oh, I need that. I buy it. It's$50. This takes time. You, you need to talk to your spouse. You need to measure the room. You maybe want to order a sample to make sure you feel good about the color or the finish. When you're talking about really nice furniture, it, it just helps so much to be able to see it, to sit on it, to, to open the drawers, you know, whatever it might be, depending on the piece.

45:26To get a different sense of what the quality is versus something you might see that is in the marketplace that is cheaper. Sometimes someone purchasing can be, of course, deciding between that. But when you actually get to feel the piece, it does make it different. We always joke that our dressers, there was one dresser we have that's literally 400 pounds. And so we took video of it because everyone's always like, how much does it weigh? Because I get it. You're on Wayfair and it's going to weigh like two pounds. And we're like, look at these five guys having to carry this 400 pound dresser. We promise it's solid white oak.

45:58It's the real deal. Well, so it sounds as though you think that the next step is some kind of a retail location and perhaps you're pretty far along in your thinking. Yes? Yeah. I mean, we're committed to being able to find a space here in 2025. That's the goal. And I think that it's going to be a local thing here in the Orange County area. But we just believe that, I don't know if you've heard the term, the halo effect, But I think that that's real is just the halo effect of having a physical space. That might not even be a huge revenue source in that physical space. But I think that people being able to see it will result in more sales potentially on e-commerce or maybe in person as well.

46:43But I do think that it's needed and people need to see this stuff in order to see the quality. How did what you're doing, Lindy, get on RH's radar originally? How did that come about? I designed this nightstand that sits in our bedroom, actually, and it's got these curved sides and this reeded front, and it became one of our best sellers. And all of a sudden, we get a DM, looked into it, and it turned out Gary, who's the CEO and amazing visionary for the brand, had seen it on Pinterest or Instagram and told his team, we got to reach out to Lindy, and we got to see what it would look like to partner on this piece.

47:23from there, they said, Hey, let's build this out. So now it got built out into many different categories. Um, so, you know, the nightstand, the dresser, the OGs, and then to a desk, a hutch, a console, tons of different pieces. And, um, the response has been so great in the last month or two of it being out there was kind of like a quiet launch at first on their website. Uh, and then it became a big wider launch at their Newport beach opening of the store where it was featured in three different rooms. And I think I can say this part. I think that over the last couple of months that it's been out there, it's been received very well.

47:59So we are expanding the collection again with RH and doing more categories like dining, beds, a handful of different ones. I'm in the process of designing alongside them while designing and collaborating with them on. So how long did it take from that original DM reaching out to you to bringing the product to fruition. They're a lot faster than we are. They move things a lot. Yeah. Yeah. They sure do. So, I mean, seven months, they're so quick. Seven months. Really, really fast. Yeah. Yeah. And then for you, so then that product line becomes theirs or is that still something that you can show on your own or now that's part of the RH?

48:44That's theirs. That's part of the RH collection alongside us. Yep. Yeah. Okay. Yeah. And, and some new things that you're designing as well will also be exclusively for, for them. Correct. Exclusively for them, um, and our partnership with them. And did you have to sort of fly around and meet with a bunch of people or how did it all, from a design perspective, how did you work with their, with their team? You know, what's so funny is we are, we're going to visit them, I think in February, but that will be our first trip, uh, to see any of them. We worked a lot online together. Zooms, of course, and then sending renderings back and forth and getting feedback from different elements of things that they were kind of envisioning with, say, a Hutch.

49:27But then I would kind of make sure that it still had the tune of what the original design and feel was, and then them giving feedback as well. So it's been a really great partnership of really them understanding kind of from a design perspective what I want to continue to hold with it and us learning from their expertise and perspective on what they know their audience to love and being able to bring that together. Wynn, how do you find yourself feeling about the coming year and in terms of business and what the climate's like? A lot of people are trying to put their finger in the air and kind of judge how the next year is going to be.

50:06Gary Friedman himself has talked for the past more than a year about the challenges in the high-end home industry and homes not turning over at the rate that they once were, although he seems like he's more optimistic about the coming year. But what's your sense? It's a great question. I wish I had a crystal ball to give you a really good answer. We've got great kind of partners with architects and other builders and kind of referral sources built in. And so I feel really good about that part of the market because I think that in that world, someone is always winning somewhere. And those people are building houses and we're open for business.

50:49And so we feel really good about that world. I think that we're just going to, when it comes to the e-commerce business, again, just really sustainably trying to scale it. I think the benefit of being really small and having a team of six of us is that, you know, we only need so much sales in order to reach a level of profitability to continue doing what we're doing. Okay. And, uh, and, and Lindy, anything you want to, anything you want to add there? Um, the wild card, you know, is always going to be e-commerce, I think. Um, and I think that's just part of the, like, I can't believe I'm going to say it, but like just the excitement We've always experienced many ups and downs in life.

51:32After a year of being married, we moved into my parents and$300. And so I think that we've just naturally been a couple that just wants to see what we can do in the world. And maybe there's going to be a time we're moving back in with my parents. Hopefully not. But we're on the right trajectory to not be. But I think that that is something that maybe makes part of what we do unique as well, is our ability to just kind of pivot and go with the flow and risk and take the right moves. And also with a team that is scrappy. I mean, you cannot have an e-commerce team of six people or a studio team of our size too, without these people being the kind of people that are team players that jump into anything that wear multiple hats.

52:14And I think our ability over the last handful of years to really identify the right people to partner with us on both sides of the business has been absolutely huge. I mean, just the kind of talent that we've got has also been a huge part of our ability to succeed. What do you find helps you to stand out? And what does resonate with people that keeps them coming back to you? I think ultimately, I would bring it all back to the root of why I got started in this and its design. I think that, yes, you can get a lot of different things on a lot of different websites, but we're not trying to reach everyone.

52:52We're trying to reach those that have the same love for design that we have. And those people show up. But I think that our commitment to that innovation piece has been what has made us always stand out. The details we put in, the custom approach, the sense of it not just being a piece we can turn over that's going to be too safe. We're always taking a little bit of risk here and there. I'm not going to lie. Some of those risks have not turned out. But I won recently because we have this bench that everyone was like, this is going to be a flopper. It was not a flopper. It did really well. So the team is slowly trusting my choices.

53:28But you got to have those moments where you take a risk. And you have to have those moments where you stay a little bit more on the safer side too. But I think design is what has always been the core of our success and our standing out. And Wyn, my last question for you is we talked earlier about customer acquisition, and it gets a lot more challenging on the conversion side when the price points go up. And I'm wondering where you're finding the most success right now in bringing customers to you. Where are people responding to you the most at the moment? Because, again, this is something that everyone is struggling with.

54:09I would say that our biggest success and our biggest chance of converting someone is actually the person sitting next to me, which is Lindy. Well, it's true. We've realized that the one thing that we have that everybody doesn't have is that we have Lindy. And so she has a knack and an ability to get on camera and to talk about pieces. She's really warm and engaging in that space. And so we've realized as a team that we need to utilize her as much as possible if we actually want to be successful. And so that's the thing that I feel like we have that helps give, I guess, a trust to the products that we're selling is that Lindy is backing them up.

54:55Right. Okay. So the social selling side is really what seems to be the most powerful. yeah i mean it always has been for us and and i think it will continue to be that especially as we have different collaborations coming out like rh i mean that just it i i trust lindy more now you know she's got a collection with rh like you're even more impressed with her designs sure i liked them before but now that they're in rh i'm really wow she really can design I finally got the stamp of approval. Yes. Well, Gary Friedman, he is. Right? He's a good stamp of approval. So that is. That is a good stamp of approval.

55:37Yeah. No, no, no. That's a huge moment for you both, obviously. And congratulations again on that. That's terribly exciting and how fun for you to get to experience it at the grand opening and all of that. And I hope it catapults the business to great things. Congratulations on everything that you're doing. And thank you both so much for making the time to come and talk with me about it. Thank you so much. So happy to be here. This was fantastic. Yeah, it was really fun. Thank you. My pleasure.

56:11And 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? Ryan Waddups caught my eye this week, Dennis. Yes, fellow design journalist Ryan Waddubs. Ryan, I think, is most closely associated with Surface Magazine's daily newsletter. And he's done such a great job over the past few years making it into a really fun must-read. Obviously, Business of Home is your first must-read, but Surface has historically been a really good read. I think largely because Ryan did such a good job making it really fun.

56:43And now he's leaving. He's headed to Gallery Magazine to be their deputy design editor. So I just wanted to give Ryan a shout-out. and I'm excited to see what he does over at Gallery because he did a great job really making Surface fun. And so Gallery's already fun, but it could only be funner. So shouts to Ryan. What caught your eye this week, Dennis? Yeah, absolutely. Shout out to Ryan. A big fan. I can't wait to see what he does. What caught my eye, Fred, is just as we're getting ready to record the show, what gets dropped but the AD100 list for 2025? Big, big names in the industry, including this week's podcast guest Andre Malone and some newcomers to the list that include Heidi Callier.

57:24We're a big fan of Heidi, so congratulations to her. And Alyssa Capito as well, first time on the list. And so I didn't get to look through the whole thing yet, but I think we should talk about it in the future. Did you have a chance yet to catch a glimpse? Well, they didn't send it to us in time for me to look before. How rude of them not to time their release schedule to our podcast recording. I saw Heidi was on it, which I thought was obviously very well-deserved and what a talent she is and how far she's come in just a few years. So that was the main thing that jumped out at me. A lot of names that were unfamiliar to me, which kind of makes me excited to check out some of these firms that I've never heard of.

58:00So I'm excited to dive in deep and maybe we can talk about it next week. Absolutely. A lot of former podcast guests were on the list. So congratulations to all of them. And as you say, some names that I wasn't overly familiar with. so hopefully we'll get to know them better by having them on the show and talking with them. So congratulations all around. 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.

58:37This episode was produced by Fred Nikolaus 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.