The Thursday Show: Why did RH buy three trade brands? Plus: Charlotte Moss on designing an entire showhouse herself

0:06This is Business of Home. I'm Dennis Scully, and welcome to the Thursday Show. Later on, I'll be chatting with interior designer Charlotte Moss, but first, we're going to catch up on the news, including RH's new acquisitions, what's going on with Industry West, and a look at design on Reddit. To do all that, I'm joined by Business of Homes executive editor, Fred Nicholas. Hi, Fred. Hi, Dennis. How's it going? Great. How you doing? I'm tired, Dennis. I'm not going to lie. Oh, dear. I've written like one story a day for the past week. as listeners will discover in this show there's a lot of stories that Fred's been putting out a lot of substantial news coming out in case people don't know we do stuff outside of this podcast our entire jobs are not just to talk one hour every week although this is the most important part of both of our jobs of course the part that Fred cares about the most is what he means to say exactly that is what I meant to say but yes I'm a little tired but not too tired to look back on a great episode Monday's show, your conversation with Ashley Montgomery, lovely Canadian designer, a lot of interesting thoughts, a lot of realness, was a great episode.

1:18Well, I'm so glad you feel that way. I had the pleasure of meeting Ashley as she came to her first high point ever this past spring. She was on a panel with me, and I fell for her right away. And I thought, we've got to get her on the show. Little did I know, Fred, that there was so much to talk about. Yeah, a lot to get into. And it's sort of an emotional subject. She had divorced with her husband, who was also her business partner. And those kinds of splits are never easy. It's both the professional and the personal trauma of it all. But she was very, for the better, we're both in a good place.

1:58And she talked very candidly and openly about getting through that and how it made her a stronger designer. And I think a lot of people will just relate to that story. You know, even if it's not splitting up with someone you're romantically involved with, if it's just splitting up with a business partner, it's very hard and people don't want to talk about it. And I think that like Ashley was incredibly open and I'm really glad that she was because I think a lot of people will get something out of it. There's also just good little fun business stuff. I mean, she talked about like markups. There's a lot of great, you know, design business stuff in there as well, but it's certainly one to listen to for anyone who has ever experienced that kind of split.

2:33Absolutely. And I so admire and I'm grateful to Ashley for her bravery and her candor. It was a very open conversation right out of the gate. And she just put it all out there. And we talked about a lot of things having to do with her business. And she's got a very successful operation up there in Canada. Sadly, it's pretty expensive to get some of that American product up to Canada, which she talks about pretty candidly as well. So a lot to learn from that episode. I'm so glad that you enjoyed it, Fred, and I hope everyone else will too. All right, we're going to get into the news in just a moment, but first, a quick break.

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4:02And we're back. First up, Fred, it's not going to be tariffs. We're going to talk about RH. It's Christmas morning, Dennis. We can talk about Restoration Hardware. First thing on the pod. For the first time in several years, the company formerly known as Restoration Hardware has made some acquisitions. Chairman, CEO, and biggest shareholder, Gary Friedman, has picked up three trade-focused brands, Denison Lean Formations and Michael Taylor Designs. Would you say these acquisitions are intriguing or surprising, Dennis? What do you think? I think they're a combination there, Fred. I think this whole thing is very intriguing, a little bit surprising, and certainly something that I'm eager to discuss.

4:41us, we should start by explaining what these three companies are and what parallels there are running through them, if any. Absolutely. Let's go there. So Dennis and Lean and Formations kind of go together. So these are Los Angeles-based brands. Certainly many LA designers will know them. Several former guests of this podcast are big fans of these companies. They have two conjoined showrooms on Melrose. You know, there's sort of two separate, you know, showrooms and furniture brand by the same designers, including Richard Hallberg. By all accounts, thriving businesses, high-end furniture. Michael Taylor designs a little bit of a different situation because, you know, of course it was started by the iconic California decorator back in the 80s, you know, became a big brand.

5:23Apparently this was a little bit before my time in the 90s after Michael Taylor passed away. But it was a big brand, I think in the 90s and early 2000s. But then in more, in recent years, I think it's gone away a little bit. There was, you know, their social media isn't really active. There was a couple lawsuits I checked out. And so, you know, I think this one is being bought out of, you know, some some form of neglect or distress. So three very different kinds of companies. And I was certainly certainly surprised to hear all the rumors about them being acquired together. This was one that kind of, you know, we heard this one on the grapevine.

5:54I think you heard about it as well, right? Yes, you started to get a lot of people asking about it, and a lot of people are friendly with all of these different people. And so the news did start to seep out, and certainly when RH is making acquisitions, it gets a lot of attention. But often in the past, we've talked about RH making acquisitions more to acquire capacity and upholstery skills with some of the previous companies that they've acquired. This seems a little bit different. Yeah, well, I was actually really confused about these acquisitions when I first heard the rumor mill grinding as it did, because RH is a big company.

6:32They're a really, really big retail company. They're publicly traded. And no investor is going to be like, they bought Michael Taylor? That's going to send the stock up. You know, so it's not a company that you buy for its additional capacity or the dollars it's bringing in the door. You know, you buy it for a different reason. And, you know, I thought we were going to have to go to press on the story without a comment from RH. But then at the very last minute, I got on the phone with a late night call with Gary Friedman. And he kind of explained that what these two acquisitions are about is this new aesthetic that he wants RH to, you know, to move into this new project, basically, to come up with the next thing after RH Contemporary.

7:12And if you've listened to one of these earnings calls, as Dennis and I do very, very obsessively over a bucket of popcorn, you know, he likes to talk about how aesthetics come from people dying and, you know, their property goes into estate sales. Estate sales. Exactly. And then the antiques market gets a hold of them. And so it's like, as, you know, people pass away, you know, aesthetics sort of pass down to the retail level. And I think his bet is that the next big aesthetic that's going to rise up is this after the sort of 70s design that inspired RH contemporary. It's going to be this kind of like 80s and 90s, like classical, traditional inspired sort of eclecticism is how he described it.

7:50And so these, you know, buying these companies is like buying some of the people who helped develop these ideas in the first place. On some level, I was also sort of curious about why these companies wanted to sell. And we always have this conversation when RH buys a company because, you know, I guess Michael Taylor designs, it sort of seemed like the owner, you know, had maybe kind of, I suspect it was bought relatively on the cheap. It didn't seem like a totally functional company anymore. You know, Formations and Denison Lean, like this is a brand that's doing apparently a brisk business of the trade.

8:19And, you know, a lot of designers have very complicated feelings about RH. And I always wonder, like, are, you know, is their trade clientele going to not like the fact that now RH is the owner? I don't know. What's your perspective on that? I'm always so curious about that, Fred. And you and I have talked in the past about different companies that have entered into partnerships of one kind or another. David Sutherland from Perennials talked about it was so great for business and created much more awareness. We talked about Holland & Sherry. There was a lot of buzz when whatever partnership was formed there.

8:53doesn't seem to have affected Brian Dicker and Nolan and Sherry in any negative way from what I can tell. And I'm amazed at how many people still seem surprised that RH owns Waterworks. Yes, we can confirm that many years ago they did acquire Waterworks. It's true. So I don't know if it really creates a big issue for these companies. What's your sense? Yeah, that's my perception as well. I think when these partnerships or acquisitions first come around, there's like some agita in the trade because I think designers and, you know, for, for good reason or not, you know, don't always love RH. And so, you know, the idea that one of my favorite vendors is now going to be owned by them is, you know, you know, an opportunity to sort of, sort of vent about it, but I don't, I don't get the sense that like Dimitri, for example, is, you know, not doing business to the trade just because they're owned by RH.

9:43So it might just be a lot of smoke and, uh, you know, we'll have to see with these acquisitions, but I have to say i don't suspect that formations or denis and lean is going to lose any you know designer customers at least in the short term because of because of this new uh you know this change in ownership my question is does this does this move them any closer to the top of the luxury mountain push them up to the next mile i don't know you know the luxury mountain is sort of like a symbol or a metaphor i don't i don't know if it's really productive really be within your grasp right exactly i mean i you know i i certainly think that like if you want to be a luxury brand as of course carrie firman wants rh to be you know acquiring companies that make very high-end very beautiful furniture certainly seems like a step in the right direction but i don't think gary would say that this like you know gets them to the top overnight i think this is a you know a few steps up that mountain maybe not a huge uh ground gained but what do you think I think for all of whatever Michael Taylor's business might have become, I think both Dennis and Lean and Michael Taylor are big names in our industry.

10:53And formations. Exactly. And I mean, I think they all have a weight and an import. So I think that's meaningful to RH as well. So it'll be interesting to see what comes of this. And again, it's great that we learned about this and it'll be worth watching. And we'll have to stay tuned on those earnings calls to see how they - Get that popcorn ready. There's one just around the corner. Exactly. It's coming soon. Did you talk to him about changing the day so that we could talk about it on the show at the right time, Fred? That would have been great. I'll text him. In the meantime, we're going to move on and talk about Industry West.

11:33The furniture brand appears to be in a state of distress. It shut down its social media channels. Customers are complaining on Reddit, and missing orders continue to mount. You looked into this. What did you find, Fred? Well, I found more or less what you just said. Not to make light of a situation that's probably a little bit stressful for everyone involved, but we started hearing rumors that Industry West, this company, Florida-based furniture brand, they sell direct to consumer, they sell to designers as well, was having some problems. And, you know, when you start looking at the digital footprint, it sort of becomes clear, you know, they're not posting on socials.

12:10People are complaining on Reddit. Hold that in your head. Reddit. We're going to come back to that later. And there's this lawsuit from a landlord about one of their logistics facilities. You know, the founder and CEO didn't respond to or he rather declined to comment for the article. But I think if you can kind of put the pieces together, it's clear that they're going through some kind of problems, you know, not sure they'll make it out to the other side. You know, hope they will and hope the customers get their money or their furniture. But definitely more than just a little bump in the road over there.

12:42Yeah. No, no, no. I'm always sad, Fred, when a very early guest in this case on the Business of Home podcast. Three dated even me. You have to go way back to before Fred even joined us back in 2018 when we had Jordan England and his wife on the show. And they talked about the early days of trying to find some dining room furniture. And it was all too expensive for them at the time. And lo and behold, a D2C company was born. But it seems like whether it's tariffs or some of the other housing-related challenges that have been going on for the past few years, something seems to be affecting the company quite a bit.

13:24Yeah, and I mean, like, what's sort of interesting about this is that a lot of the chatter online about problems they were having popped up in April of this year. And, of course, you will remember that April was Liberation Day, the beginning of this. Yes, exactly. Who can forget? But yeah, so I mean, Industry West, of course, imported a lot of furniture from Asia, particularly from China. And so it's not too much of a stretch to imagine that that could be fatal or severely damaging for a company that's relatively small. It's not a big company. But exactly because it's not big, they don't have the cash flow to deal with 145 % tariff that gets put in overnight.

14:00I'm sure they were having other issues. You know, the complaint from their landlord was from December of last year. It's been a tough time in the home business, as we all know. But there's been a lot of coverage in the media recently about how tariffs haven't made as much of an impact as we thought they were going to have. And I think that's broadly true, but it is having an impact. And I think we're going to see more stories like Industry West of maybe smaller companies that rely on importing a lot, you know, really struggling and, you know, to deal with the ups and downs of the past few months.

14:29Well, and I think to your point, if you were already struggling and then suddenly these enormous tariffs were implemented, then that really might have been the last nail, if you will. I wish them the best, but we'll keep an eye on this one. It doesn't sound too hopeful at the moment, but we'll stay tuned for more. In the meantime, Fred, we're going to move on to talk about an interesting startup. Yes, to help homeowners better visualize their projects. A company called Walk Your Plans, straightforward name, is allowing users to walk through life-size projections of their blueprints. Crazy, interesting idea.

15:05I really like this one. What do you think, Dennis? That's how I feel, Fred. I like this idea. They're not too far from me in Portchester. I want to go visit. I want to go walk through someone's walk-in closet and experience it in real life. I like this whole idea. Yeah. Let's tell people exactly what it's all about. Walk your plans. Yeah. So I got a pitch for this a few months ago, and I think the headline of the email was like, you know, a cool new way to visualize your project. And I was like, got it. VR goggles, you know, seen a million of these move along. And so I didn't move on it immediately.

15:38And then I opened it a few days later and it's it is very low tech compared to VR goggles. What the company does is they develop this technology where basically they put a bunch of projectors on the ceiling of a really big room, like a former high school gym or like an airplane hanger or old warehouse. And they project onto the floor at like actual life size, the blueprints of a home. So if you want to see, well, okay, how big is, you know, my living room actually going to be, you can look at the little lines on the floor and get a sense of space that feels true to life, that it really is the actual, you know, size of the house as it's going to be built, which is simple, but kind of ingenious.

16:19I don't know. And it seems to be successful. I mean, they launched the company a couple of years ago, and they've already, you know, it's a central company in Ohio. They licensed the technology out to other, you know, it's not really franchises, but kind of franchise-like players. And I think there's already like 16 of them. They want to build like 120 of these in the U.S. over the next few months or the next few years, rather. So it appears to be, you know, I don't know. They seem to have struck a nerve. Well, I mean, you can really understand how helpful this could be to all of the parties involved.

16:50And it sounded like builders found this to be helpful and the architects and everyone literally being able to stand in images of this space and then walk around what the real square footage would be just made it so much easier to understand than sitting there with your scale ruler and trying to imagine. Now, wait, an eighth of an inch is how many feet in this drawer? I mean, can't you imagine just how much easier it all becomes? Sorry for Apple Vision Pro. I feel like this. I don't know if this seems like a lower tech solution to it, but it certainly seems like a more pleasurable one and an experience that everybody can have at the same time.

17:33The goggles, you're in your own space. And here, the entire family can walk through these enormous projected plans and experience the home together. So there's a lot to like about this. As I say, Fred, it's all I can do to stay here working on the show and not run over there to Portschester. We sound like we're in the tank for this company. We need to sponsor the podcast here. I just want to see someone's house projected like this and experience it. I mean, yeah. I guess the caveat to all of this is it's expensive. You know, I mean, I think like the one in Los Angeles, which seemed to be sort of decked out in a very designy type of way, I think is$1 ,500 an hour.

18:09I want to say something like that. So it's not a it's not cheap, you know, but I do think there's real utility. And I think even, you know, designers and architects will see new things they didn't see before. So I think let's maybe do a live podcast from one of these locations and maybe we can offer a more critical take on a very interesting idea. I'm there and we'll get some architects and some builders to come along and we can talk about the whole thing. I love that idea. Stay tuned for that fun live show. In the meantime, we're going to talk about Reddit. We mentioned it earlier. For this week's feature, Fred, you took a deep dive into the design community on Reddit.

18:45Once again, what did you find? I found a lot of very questionable design choices on Reddit, which will come as no shock. Um, I don't know. Reddit is sort of interesting. I mean, like I, I should explain why I was even interested in looking at it. I think like most people probably know vaguely what it is, but Reddit has been a lot more in the news and a lot more top of mind, I think over the past few years, because as you know, so much more content on the web is generated by AI or using AI to search, you know, existing sites. And I think that like, you know, social media has gotten a lot more performative and now it's all just influencers and algorithmically, you know, generated weird stuff.

19:29I think Reddit is one of the last places on the internet that is sort of reliably human, you know, like you go there and you're like, okay, this is a little weird, but I am going to actually have a conversation with a person or I'm going to see what people are actually talking about. And I think that it's traffic is, you know, through the roof. I think Reddit has a hundred million plus visitors every day, which is enormous. It's one of the top 10 most visited sites online. And it is, you know, it's a big deal. And so I kind of thought like the whole world is sort of talking on this platform. What are they saying about interior design?

20:00And that was kind of the premise for this piece. And I spent a fun week kind of kicking around some weird corners of Reddit. Do you use it by the way, Dennis? Well, you know, I, so I love to sort of crowdsource and, and find out what a big community is saying about this or that, or if they have an understanding of a brand? And if so, what is it? It's always interesting to read through threads like that. There's a lot of subreddits that are very quirky collector subreddits that are really interesting. I was having a DM exchange with Michael Diaz Griffith, actually, from the DLN. I think he was in a taxi cab, so he had lots of time to DM me.

20:40MDG. And he was saying that he actually, you know thinks it's it's really interesting uh sort of back and forth there's a sort of a lot going on there he's not he's not totally sure that it there's a lot of opportunity for a lot of the designers that we talk with on a daily basis but uh but it it sort of reminded him a little bit of old twitter before twitter became sort of overrun and kind of a different thing and then ultimately became x uh but it sort of had that feel to it yeah it's like twitter but a lot less vicious. I think people are not all nice on Reddit, but there's more kind of community support it feels like on the platform.

21:21Yeah. It's interesting. I went into it thinking like, is there going to be an opportunity for designers to like, you know, engage with this platform? I kind of think the answer is no really candidly. And I would agree with Michael on that regard. Like it's, it's, you're not going to get a great client on Reddit necessarily. It's just not the platform for that. I think there's like education to be had there. There's like a platform, you for professional designers. And the conversation there is very, you know, it's real in the way that Reddit often is. I also think Reddit is kind of like low key, a great place to vet vendors and retail brands, because if people are complaining about a company, it's going to pop up on Reddit in some form.

21:55Several of my stories have started with a Reddit thread. So, you know, that never hurts to look there if you're having an issue with a brand. But I think it's less of like a professionally useful tool than it is just kind of an interesting place to be. So much of the design content on Reddit is people just, you know, having problems with their homes. And I think that like, I really enjoyed just looking at those for hours on end, because it's a reminder that like, you know, in our little rarefied world, Dennis, it's all very aesthetic. It's all about high minded principles. But for most people in their homes, it's just like, where does the sofa go?

22:31Where does the coffee table go? And I think that that's like a helpful reminder for people, who are in this industry. I agree. It's very humanizing, as you say, to see everyone sort of struggling. It's funny. A doctor I was visiting recently asked me about some fireplace ideas. And of course, I had very expensive fireplace ideas for him. It's a reality check, yeah. Right? I was like, oh, Chesney's in the D &D building. But then I quickly sort of hopped on Reddit in the hopes of finding him some lower cost alternatives. And of course, there were a million conversations about mantles and fireplaces.

23:09And so I was able to give them some other ideas. But I do think it's a reminder that, as you say, everybody is struggling to figure out what to do in their space. And I don't know that there's a great opportunity for designers or other ways to sort of monetize this. But I do think it's a great reminder of the challenges that so many people are facing. And as you say, 100 million daily users. So it's also it's also just fun. It's funny. You know, there's so many like weird little Reddits dedicated to strange little corners of design. There's there's really popular Reddits that are just about bad design.

23:49So if you need a laugh, there's definitely a lot of that. One of the most popular design Reddits is male living, which is like over two million followers. It's just like guys posting pictures of their rooms. and uh it's uh that one is like simultaneously very earnest and very ironic at the same time it's it's such a fun little weird corner of the internet well and i mean and jake harrison who does the hubba hubba substack actually wrote to me to that very effect that's that male living spaces is one of the places you can find jake you know trying to get some insight into what's happening with with bachelors who are trying to figure out their their space another subreddit that I wasn't familiar with, one called DIY Snark was introduced to me from Mr.

24:34Jim Design, and I appreciate that very much. Apparently, there's some room to get a little snarky about some things that are happening in the DIY space, and as long as that doesn't get out of hand, I guess I'm okay with that, Fred. Yeah, I don't know. I mean, I think if you go looking for Snark on Reddit, you're going to find it, but I also think you'll find kindness, too. It is sincerely a platform where people try to help each other in certain subreddits, at least. So I don't know. It was just a fun piece. And if nothing else, it's check out male living spaces. Is that what it's called? Yes, exactly.

25:08I think we've talked about it on the show in the past. Some men out there need quite a bit of help with their space. Indeed. Moving on, we've got to talk about some sad news. Designer Bruce Bierman passed away earlier this month at the age of 72. Trained at the Rhode Island School of Design, Bruce went on to found his firm in 1984, building a practice rooted in what he called the psychology of space, creating environments that made clients, in his words, sigh with pleasure. He was inducted into the Interior Design Hall of Fame in the year 2000, and over the years his work appeared in Architectural Digest, El Decor, the New York Times Magazine, and publications across the globe.

25:50Bruce was an old friend, and my wife and I enjoyed many a fun dinner date with Bruce and his husband, William Secord. We send Bill our condolences. Everyone who knew Bruce loved him. Very nice guy. I didn't know him as well as you did, obviously, but I interviewed him a few times over the years, and he was always willing to hop on the phone and talk to a guy who didn't know what he was talking about. So yes, Bruce will certainly be remembered by all who knew him and a real talent in the industry. Knowing of a shared love that we both had for Dolce de Leche ice cream, Bruce one time showed up at my parents' apartment with a shopping bag full of pints of Dolce de Leche ice cream for my birthday.