The Thursday Show: RH is betting big on traditional. Plus: Homes & Gardens has a new US magazine

Business of Home Podcast

Dennis Scully and Fred Nicolaus discuss major design industry news, including RH's traditional-focused strategy, AI-driven spending habits a

Key takeaways

• RH is doubling down on traditional design despite market shifts toward modern styles.
• AI professionals are spending heavily on luxury home goods, signaling a new elite consumer segment.

Main topics

• RH's traditional design strategy
• AI elite spending habits

Notable quotes

"I hope to get down to Grand Rapids and see it. But I wish her great success. She's one of my favorites." – Dennis Scully on Sarah Sherman Samuel's gallery opening.

Conclusion

The design industry is evolving rapidly with shifting consumer behavior

Transcript preview

Speaker 3 (0:07) This is Business of Home. I'm Dennis Scully, and welcome to The Thursday Show. Later on, I'll be speaking with Sarah Spiteri about the launch of Homes and Gardens' new magazine, Anthology. But first, we're going to catch up on the news, including RH's latest earnings report, the spending habits of the AI elite, and a look at what home brands are doing with their tariff refunds. To do all that, I'm joined by Business of Home's executive editor, Fred Speaker 2 (0:34) Nikolaus. Hi, Fred. Hi, Dennis. How's it going? Great. How you doing? I'm doing busy, Dennis, but I'm not the only one. This is a busy time of year. And you're actually, after we press stop on this recording, you're about to jump on a plane and head to Dallas or something that sounds kind of exciting. Why don't you clue in the listeners on what you're up to? I Speaker 3 (0:52) said to myself, Fred, what's the hottest place I could go to right now? Turns out it's Dallas, Texas, where it's 100 degrees in the shade. The Lallois need me there. So darn it, I'm there for an exciting day that they are putting on. I'm actually doing a remarkable panel with Amir Lalloi, the founder of Lalloi, along with Irv Blumpkin of the Nebraska Furniture Mart. Yes, that Irv Blumpkin. And also Joanna Gaines is going to be on the panel. So, I mean, how much... How much more legendary do you get than that? It's a fun day. They brought together a bunch of their retail partners and a bunch of their design partners. The carriers are going to be in the house. I'm Speaker 2 (1:32) going Speaker 3 (1:32) to do a fun panel with them as well. And Lone Fox, I believe, will be there, former guest of the show. So it's going to be a fun time in Dallas. I'll just be wearing a see-through suit for the whole event. Speaker 2 (1:43) Well, I'm sorry to miss that. I'm happy to miss feels like 110 degrees, but it sounds like a fantastic, fantastic time. I'm here in New York. And Dennis, I hope you don't mind if I just talk past you a little bit. I want to directly address the listener who has this podcast on the subway up to 200 Lexington for What's New, What's Next. Please come to the Surya showroom at 115. I'm going to be doing a panel about AI and design. It should be really interesting and fun. Normally, I like to host panels. as a co-host with you, Dennis. Maybe you can sort of FaceTime and then bail me out if it goes rough. But I have some great guests, including Sarah Robertson from Studio Dearborn, who's been on the podcast. Blair Moore, a designer from Workshop APD. It's going to be a great time. And I hope people will head on up there to the sixth floor, 115. That's my plug. Well, Speaker 3 (2:31) I know it'll be a great panel, Fred, and everyone should drop what they're doing and get there. And I'm a big fan of Sarah Robertson. Please send her my best. And I know it will be Speaker 2 (2:40) great. Fantastic. I hope you're right. Let's quickly look back on Monday's episode of Conversation with Annie Meyer Shire, the daughter of a famous filmmaker and design tastemaker, Nancy Meyers, but also a great, you know, talent in her own right. It was really interesting to hear her story. Speaker 3 (2:55) And very fun to finally connect with her. Speaker 3 (2:59) And here both the story of how all of this blew up into, here's an Instagram account to share some of my paint color choices with some of my old friends back home and turned into a massive brand that includes a book that's just come out now and a brand collaboration with Target. And I sense many other collaborations to come in the future as well. So it was really fun to talk with her. It was a pleasure. Speaker 2 (3:29) Yeah, it was fun. I loved her. You know, we're always talking about everyone has to do vertical video. And you and I, Dennis, are trying in various embarrassing ways to do vertical video. And she was like, you don't have to do that. I'm not on camera at all. And I did very well. So I was like. Damn it, Annie. But it was a lot of fun takeaways and a good conversation. So I enjoyed it. Speaker 3 (3:47) Yeah, no, a fun one. And she does very candidly share that appearing on video is not her favorite thing. She said, once I'm done doing this darn book tour, look for me to be off camera for the rest of my life. We'll see if she can get away with that. OK, we're going to get into the news in just a moment. But first, a quick break. Speaker 3 (4:08) This podcast is sponsored by Chelsea House. For 10 years, interior designer and retailer Jamie Merida has been creating pieces for Chelsea House with a simple advantage. He knows what designers actually want because he's one of them. This October, Chelsea House celebrates that decade-long collaboration with the Jamie Merida Edit, featuring more than 60 new designs shaped by Jamie's distinctive point of view and his passion for creating interiors with personality, sophistication, and a sense of the unexpected. A gentleman's take on classic design, duly shaken. Discover the Jamie Merida edit this fall in the Chelsea House showroom at 200 North Hamilton in the Hamilton Wren Design District. Speaker 3 (4:56) This podcast is sponsored by Hickory Chair. Since 1911, Hickory Chair's mission has been to combine the authenticity of classic craftsmanship with the efficiency of modern lean manufacturing. Over its remarkable 115-year history, the company's collection has evolved to include timeless, modern, and classic designs inspired by significant periods and places. as well as collaborations with some of the world's most respected designers, including Suzanne Kastler, Ray Booth, David Phoenix, Susan Habel, Kim Skodrow, and Mariette Himes Gomez. Working with interior designers, trade showrooms, and fine high-end boutiques, Hickory Chair's talented craftspeople bring each designer's vision to life, creating bespoke wood furniture and upholstery from the finest materials, for clients around the world. Nearly every detail can be customized from size and wood species to an extensive range of configurable options, COM fabrics, match panel finishes, and even customers' own hardware. The result is furniture that is truly made to order and made for you. Hickory Chair's hallmark is luxurious yet livable furniture made to order and built to last. The company is proud that the vast majority of its furnishings are made by hand in its Hickory, North Carolina workroom. Speaker 2 (6:30) And we're back. We're going to Speaker 3 (6:32) get Speaker 2 (6:32) into a few subjects really quickly here, Fred, starting with Kips Bay. Yes, the show house made its debut in a Greenwich Village townhouse this week. Dennis, you were one of the very first to see it. What do you think? Well, it is a it is a beautiful house. I don't know why John Philip Sousa ever left, frankly, Fred, but. Right, right. Who was it? It was Kylie Jenner and John Philip Sousa. I Speaker 3 (6:53) hope Speaker 2 (6:53) our listeners are Googling John Philip Sousa right now because you could not get a more diametrically opposed celebrity than Kylie Jenner. But yeah, I mean, you know, the interesting thing about Kips Bay in New York this year is it was downtown for the second time. in a row. I don't know. What was the energy like? They clearly think it worked last year. Did it work this year? Did you wear a leather jacket? That's my question. Speaker 3 (7:15) Sadly, I did not wear a leather jacket, but that is a surprise to no one who's listening to the show at the moment. But what was really spectacular about the house was it took full advantage of every balcony, every rooftop opportunity. There was a really fabulous rooftop. set up, a tented fabric unit. And there were several floors that had really spectacular views and could open up to the neighborhood. So I can see why they were so excited about this house down at 80 Washington Place. And it definitely did have a very downtown vibe and was very fun. Speaker 2 (7:55) I did notice there were a lot of newcomers to the show house on the list of designers. It seemed like it was changing of the guard, new blood. I'm curious if you talked to the designers who had never done it before or were newer to the industry. What was the vibe you picked up on that front? Speaker 3 (8:08) Well, it was fun, the energy of so many people that had never done it before. I mean, you and I have talked off air. I can't remember a year where there were fewer big marquee names from years past at Kips Bay. And in a way, I'm sure that for Nazira, it was probably a lot more for her to herd and manage and a lot of people. A lot more cats Speaker 2 (8:31) to herd, yeah. Speaker 3 (8:32) Exactly. I'm sure she had her hands full and I'm eager to share a drink with her and talk about that. But it was fun to see just a heightened level of excitement from so many people who had never done it before and who are eager to sort of see where it all goes. I mean, some of the names that we know and admire, Carrier and Company are introducing a new fabric. line with Lee Jofa, and they did a beautiful job of bringing it all to life in their space. The fabulous Peter Dunham did this incredible bedroom with a beautiful new striped fabric that used to be a wallpaper now is a fabric. fabric covered the walls of the room in a beautiful way. But there were so many people. I had never met Dunham Zerbini design before, and she just collected an incredible array of custom made pieces. I don't know how on earth she got them all done in six weeks. Shout out to Edward Fields and some of these other vendors who, I don't know, must have just been working around the clock, but making that incredible rug that's on her floor and some of the art pieces. It It's always incredible what people can do in such a short period of time. And it was fun to see so many new faces and the excitement around being there for the first time. Speaker 2 (9:50) Yeah, it kind of reminds me of the conversation we had about the AD100 a while back, how there's like a lot of new names on it. And, you know, maybe there's some sense of, oh, what happened to the old guard? And some people might question that. But it's nice to see, you know, new blood get into the mix and have new people get a chance to sort of tackle this and get the honor of doing it. So, you know, I think a little, you know, changing of the guard is a good thing, except when it comes to podcasts. We're going to keep everything exactly as it is. Not us. But I can't wait to go check it out next week. Speaker 3 (10:18) Yeah, I'm eager to hear. what you think and I'm eager to hear what listeners think. I think this feels like a very different house and I'll be keen to hear the reviews from everyone who went to the opening last night. We're going to talk about the bond market now, Fred, because who doesn't follow a Kips Bay discussion with Speaker 2 (10:35) a chat about the bond market, right? Yeah, a little peek behind the curtain, listeners. We were trying to figure out what's the Venn diagram where Dennis Scully is in the middle. And on the left, you have Kips Bay Showhouse. On the right, you have the bond market. So this is Dennis's corner. But yeah, the bond market has been kind of in a tizzy over the past few weeks, months. It's been sending a very strong message. Dennis, I'm hoping you can sort of break down. What is the bond market telling us at the moment? Well, Fred, basically, Basically, what Speaker 3 (10:59) the bond market is telling us is it has a lot on its mind. It's very concerned about a whole range of issues. We don't have to get into all of them. But basically, what you've been seeing over the past few weeks is that the rates on the 10-year yield have been creeping higher. And so the market is simply demanding a higher interest rate for the borrowing that the government and many others are trying to do at the moment. And the bond market is saying, we're concerned about inflation. We're concerned about some other things. So we want to to be paid more to take on your borrowing, right? That's what's going on. Speaker 2 (11:33) Exactly. I mean, like some of the numbers are kind of crazy. I mean, the 10-year treasury is over 5%, which it hasn't been at since 2007. I mean, these are real benchmarks that are getting hit, which is why there's been so much chatter about it. I kind of feel like there's sort of like two divergent effects that this is going to have on people that are listening to this podcast. I mean, I think... you know, the most immediate one is that it's going to get more expensive to borrow money. Because as you said, the treasury rate sort of determines the baseline of what it costs. And so everybody else charges a margin on top of that. So, you know, if you wanted to take out a small business loan. Please have done it last month because it's going to get more expensive in the weeks to come. And the same goes, of course, for mortgages. The other effect, though, is that the bond market is much, much bigger than the stock market. We talk about stocks are going up, stocks are going down, but bonds are really like the underpinning of the global financial system. So when things are kind of hinky and weird there, I feel like the affluent, which is the client base for the listeners of this podcast, feel a little uncertain. So the vibes might just be a little bit weird there. I don't know. It's a little imprecise, but I'm wondering if you could back me up on that one, Dennis. Speaker 3 (12:38) There's always been a feeling on Wall Street that when the bond market starts to speak in this manner, it's the grownups entering the room. The stock market is sort of a crazy misbehaving children, which get all worked up and move in all sorts of crazy directions. But the bond market shows up and says, now, now, let's settle down, everyone. And it bigfoots everything else that's going on. And so people weren't. paying much attention to it weeks ago, but they have absolutely begun to pay attention to it. And so has the Treasury Secretary. And he stepped in to try and allay some of the concerns and actually talk down and in fact, try to buy down some of the interest rates. And what we've seen in the short term is that hasn't been successful, which makes people even more concerned about what's going on. And we're waiting for the new Federal Reserve chairman to come in and likely. raise rates to calm things down. And you and I have talked in the past, he was brought on with a very different directive to lower rates. But clearly, we're not in an environment where the Fed can be seen to be lowering rates. And the market is just screaming that it's concerned about inflation and that it wants the markets to be addressed. And so there is more than a 90 % likelihood this morning, the day we're speaking, that rates will be raised at two o'clock this afternoon by at least a quarter of a percent. Speaker 2 (14:00) Yeah, I mean, this could be a different show if you're recording six hours later, but we're going to stick our stick our neck out and say that's, you know, it's likely to go up. So, yeah, just, you know, upshot. There's there's stormy financial weather going on and we'll keep you guys posted on what happens next week. But it's Speaker 3 (14:16) a Speaker 2 (14:16) strange time. Yeah. Speaker 3 (14:17) And as you were alluding to. If you've got clients who work in finance, and many designers do, chances are your clients are a little bit more preoccupied than