The CEO of Four Hands has one fear: standing still

This is Business of Home. I'm your host, Dennis Scully. Every week, I'll be speaking with leaders and innovators from all corners of the home industry. My guess this week is Matthew Briggs, president and CEO of Forens. Over his 25 years with the company Matt has helped transform a small and teak SIM quarter into one of the industry's most successful furniture businesses, with annual revenue approaching a billion dollars. But as Forehand celebrates its 30th anniversary, Matt is navigating some of the biggest changes in the company's history, including a difficult year that tested the business in ways he never imagined. I spoke with Matt about why the traditional furniture retail model is under threat. What happens when a company famous for its customer service suddenly can't deliver it. And why he believes the biggest mistake a business can make is standing still. This podcast is sponsored by Laloi. In case you missed high point, there's a lot new at Laloi this fall. The season brings 36 new collections across Laloi and its collaborations, including new introductions from Amber Lewis, Magnolia home by Joanna Gaines and Jeremiah Brent. The assortment spans hand-botted wool, richly textured constructions, vintage-inspired patterns, relaxed neutrals and statement-making designs, offering something for any space and style. It's one of Laloi's biggest seasons of introductions yet. Explore all 36 new collections along with the latest pillows and wall art at LaloiRugs.com. That's L-O-L-O-I, rugs.com. And now, on with the show. I should say for listeners it's been a few years since Matt was last on the show, but that night I talk regularly and whenever I stop in to see him at high point we always end up having a great conversation. One of the things that we talked about recently is forehands becoming more of a brand. And that's where I would love to start. For years you were primarily a behind-the-scenes supplier to some of the biggest names in retail, but increasingly you're building forehands into a major brand in its own right. We're getting everything that's happened since you were last on the show, but sure. I'd love to start with that shift and what's driving it and how it's changing the way you think about the business. Sure, so like a lot of things in business, a lot of decisions were never made, they just happened. And part of the thing early on of when we really weren't a brand is a mixture of sort of market forces in the sense that when we started out and we got some big customers and one of them was Craig and Barrow and one of them was Pottery Barn. They made it fairly obvious that us spending a bunch of money building a brand wasn't going to be of any value to them because they were going to have us as private label manufacturers. So that was sort of one thing that sort of stopped us from really putting money into effort into building a true brand in the consumer sense. And the other was just sheer economics. When you're a small company and you look at what it takes to put full page ads into the shelter publications and stuff, it was kind of an easy decision of like, no, we're not going to do that. Combined with it wasn't sort of a natural skill set, and we were product guys starting out and putting product in front of people. So we're not brand guys. So with the advent of social media and we, at some stage, we're like, hey, we should be on Instagram. That's a good idea. And look, you know, like this, 400 people following us. And then there were a few thousand. And then at some stage, you know, what we found was that we sort of had to leap into it because we were becoming a brand whether we liked it or not. You know, so we did, we did embrace it and realize there were a lot of things we could do to control that. And we sort of revamped our logo and hired some people that knew something about that. So that was sort of, you know, where it came from. But probably the biggest transition that we saw was, you know, for many years, a lot of the retailers did not want the brands on the floor. They wanted to be the brand. And there was very little interest in promoting our name. And if we did put it out there, it was sort of a, you know, where is this whole thing going? Which again, it's all part of the entire evolution of the industry we've talked about over the last 10 years when like, nothing has held true for very long periods of time. And it is being redefined, you know, all the time. We're now at a point where the brand really doesn't mean something. And retailers and designers and people who have a great relationship with us are sort of proud to partner with us. So, you know, that's opened up a whole new world of opportunity for us in terms of, you know, doing store and store where we're doing a number of those now. Our brand is on it. And, you know, we're very proud of it. I think it stands for something. And we've got a lot of fans out there, not all fans, but we have a lot of fans out there. And we can talk about that too. But, but you do have a lot of fans. And so what I think is interesting and that I want to understand better is yours is a company that was built supplying big retailers. And initially, as you were just describing, you were white labeling for companies. So who cared what your brand was? Who cared who you were? Just make the darn furniture. And if it sells great, and we've got a great partnership, right? And that grew the business for years. And there was no reason to deviate from that path. And part of what I'm curious about is when did you begin to see? Because one of the compliments that people will pay you regularly, Matt, is you have a, you have a great eye to sort of see where the industry is making this, this shift. And I'm wondering what you started to see when you were supplying these retailers that made you realize, hey, there's a, there's a different business model we need to start to build. And it was numerous things. And what you talked about, I think one of the strengths of where that came from is that neither me or very many of the people in our company grew up in the industry. So we didn't come up with this, you know, I'm third generation. This is how the industry works. And don't you dare rock that boat. I mean, I always loved meeting with the design community. You know, for so many reasons, one of the things I loved about the design community early on was the immediacy of feedback and of action. I think we may have covered before I do enjoy a generous dose of ADD. And you know, I also enjoy, you know, we like immediate gratification, right? So you give you two scenarios. One is a national retailer walks into your showroom and says, I love this product. We have to have it. It is sensational. It's April this year. We think we can launch this in fall next year, 18 months out. Compared to a designer walks in goes, I love this product snaps a picture, texts it to her client. And the clients is, I'll take it. And they write an order. You know, so, you know, you come out of market with the designer sales and you get this immediate feedback of what's happening. And I love that, you know, because it just gives you something you're ready to work with. I think the real gap that I saw was the terrible experience that most designers had tried to buy a product from a retailer. So this is where the whole white label come things. Someone says, I own Houston, Matt, you cannot sell to any designers at Houston. If a designer from Houston contacts you send them to us. So you play along and they walk in the store and they say, I would like to see four hands in the sales person on the floor goes, I have no idea what you're talking about. And then they go speak to their manager and they're like, okay, I think these two chairs over here and maybe this cabinet are from them. But they're like, well, I wanted to see the full line. And, you know, we realized early on that they were having a horrendous experience. And essentially that was the thing where I was like, this isn't right for them. It's not right for the consumer. And early on, I just, you know, I wanted to challenge that that status quo that the retailers felt that they had a geographic lock up on our distribution in the area because I felt it was unreasonable. So that's fun conversation. That's exactly. Do you bring a knife for a gun or both? Like, how do you, how do you prepare for that conversation? Yeah. So, you know, I think lucky, you know, there were, there were market forces at play there. But, you know, I do feel to some extent we were on the cutting edge and on the forefront. And to me, it just made, it made basic business sense of, you know, if we've got a great website and product and you've got a designer, they want to work with you. And then you essentially have to cut a retailer into a middle to take 50 points of margin, plus, you know, out of the equation, it makes it, the designer has to work on race, race, thin margin, wear on thin margins. The consumer is paying substantially more to use a designer. And I do think one of the reasons the design industry has boomed is because when they work directly, you know, if people like us, and not through retailers, they don't really have to charge exorbitant fees to do it. I think in the end, the consumer is getting a pretty good deal around what they pay. Well, and that man. math is ever changing and I think faces greater challenges and there's more complexity around that today. So I'm curious how you began to think about creating a different set of margins for yourself. Because to your point about designers, so in my youth, Matt, I foolishly bought a classic mom and pop retail store. They sold Scandinavian furniture store and the lovely Danish woman who owned it told me, Dennis, don't pay any attention to those designers. They're just going to waste your time. They're asked you a bunch of questions. If you have to give them 10% off and send them on their way, right? And that was how much of the industry felt about designers at the time. And to my previous point, but if your supplier sold directly to them, you were outraged. Right. Exactly. So that was the landscape, which is basically, make their life as difficult as possible. Yes. And I wonder when all of that really began to shift and what you needed to do to change your model? I'll tell you one of the easiest things we did. And this was again, we've had these moments in forehand's history where I proposed an idea and I've had this look in the room, somewhere between shock horror or any of the five stages of grief. And one of the first ones was when I announced to the company, we were no longer going to have a paper catalog, a printed catalog. And my oldest, most revered salesperson said to me, but you don't understand that if we don't have that shelf space in those retail stores, we may as well not exist. And I said, well, we're going to try it because obviously those print catalogs were out of print the day you printed them out of date. So the one that I had was the whole industry was around minimum orders as you recall. And one of the statuses in our industry is as you grew, you put your opening order up and made it bigger because you could and you were more powerful and more intimidating. And it was a great source of pride. And you know, when we were starting out, I was impressed with these people that were like, you know, they had $25,000 opening orders for some of the upholstery lines. You had to have three room sets on. So forehand's had a, we had a $5,000, you know, minimum order. And then at one stage, we pushed it to 10,000, which we found out was really beyond us. And we went back down to 5,000. And when we wanted to really change things, I said to the, what if we reduced our minimum order? And the room talked about 2,500 and 2,000 of these things. And I said, what if the minimum order was one piece? And of course, this was heresy. And the people were like, but that's, and again, you know, the people who had been in the industry for 20 years who were working for you were like, you know, looking at me like, but how do we explain this to you? At where wholesalers, like, how can you sell one piece to one person? And we do have this retail store in Austin. And I said, we sell one piece to one person all day every day out of our retail store. Clearly, we can do it. But I mean, it sounds, it sounds incredibly obvious in retrospect. But that, that was sort of one of the big shifts in thinking. Now, of course, our bigger clients don't buy and our best clients don't buy one piece at a time. But I think it sends a message of like, we're not, we're trying to be inclusive. We're not trying to be exclusionary. If you're a registered customer and you've registered wealth for the right reasons that we want you as a customer, like, what do you need a minimum for? Just buy what you want to buy and, you know, and take the hassle out of it. So, you know, I think that was probably one of the biggest turning points philosophically. And once you did that and you're like, okay, the world didn't end. And in general, you know, these relationships work well. You know, it did change. And of course, over the years, we've had to fire customers and we've had people who don't play the game and, you know, game the system and that does happen. But in general, I think it's worked really well. And, and when people wouldn't play the game or you had to, you had to part ways with people, what typically was the issue or what was the challenge that they presented? I think at some stage, you look at this combination of maybe just not us being a good fit for them. But I think it's, you know, early on when people wanted a full retail experience at wholesale prices, which can be a bit of a challenge. You know, basically we'd like to pay 50% of retail, but we'd be like to be treated exactly like a retail customer and have, you know, that same level of, of same level of experience. And it's not to say they're wrong. And I do think we are converging onto that experience in wholesale. But early on, as we sort of said, hey, we're going to start working with designers. We need people who understood that the, you couldn't order three coffee tables from us and then return the two that you didn't like because the one worked in the space, you know, there's things like that where, you know, these had to be serious orders and, you know, things that you can do, you know, from the big retailers of buy multiple pieces to pick one, you know, that's not something that we can really love with. Well, and I wonder as this shift towards designers has happened, what we also talk about simultaneously is this massive shift happening in retail, in part, so many of these big retail businesses going away. And at the same time, we talk about, oh, the department stores aren't the big operations. They once were, we're not putting on all these extra flights to bring all the people to market in the way we once did. But it's okay because we've got all these designers now. And now they represent 60% of who's coming to market. Everybody says to me, oh, great news, 60% designers, no problem. And I don't see, I see so many of those businesses. And a designer wrote to me after high point and said one of the things that she noticed as she went around was you could tell the businesses that have really started to embrace the designer, both how they looked and how they felt. And then the ones that didn't felt like there was no energy, they were sort of dated. There was just a different vibe to it, right? Because they were still waiting for these big retailers who guess what? Aren't coming. And then you go into the nightclub that is the forehand space and the drinks have served and people are wearing cowboy hats and having a good old time. And right? And it just it like it makes the distinction between what's happening with you and other parts of the business just look so dramatic. Clearly a very high percentage of the industry is in no way equipped for the shift. And I mean, for me, it's like, you know, it's like if I tried to learn French right now, I could have the best of intentions. But any Frenchman speaking to me is going to have a horrendous experience, you know, for both of us. And I think, you know, for some of these companies, it's just not a shift that they're going to make. And this is part of, you know, the carnage we've seen in the furniture industry of the last 10 years, whether it's, you know, retailers and designers, people who have embraced the concept that you have to reevaluate your business and redesign it and think about it differently on a consistent basis have made these changes sort of in time to make them. And I think, you know, all around the industry, people, you know, who've hung onto a business model, hoping that that the next turn of the housing market, it may work again. You know, I think in some ways, you know, they are fairly doomed. And the industry will move on from them relatively quickly. Now, that's not to be said, there isn't great businesses out there that don't sell to the design community directly and don't pretend to and don't struggle the line. I think the real, the ones you're talking about are the ones who like business isn't great. We don't know what to do. So we're going to try this, but we don't really know how as opposed to, you know, knowing who you are and having a clear philosophy. Well, and I think to your earlier point, having a point of distinction or a reason why, oh, let me tell you why I go to this retail store. You know, my grandparents started a retail store way back when and it's pretty clear why people go there. People, people like the whole sort of upper east side aesthetic of that store. And if you happen to like little herend figurines, well, heck, they've got a lot of them, right? And so it's very clear who's going there and why. And believe me, you know, there could technology make all kinds of improvements to that operation. I am sure, but they are not suffering from that because they have that that core customer base. And I think a lot of the retailers just lost what they were all about or they were no longer this wonderful experience. And that actually is what I think is the opportunity for the next batch of retailers in the future, but they're going to have to go up against Wayfair, which I want to talk to you about and the RHS and the R houses, which seem to be doing a pretty good job of putting product on the floor and moving it. Sure. Okay. I mean, there's a couple of things I want to talk about here that you brought up. But I think, you know, one of the things we're both talking about the design community, right? And people talk about the design community. It is a huge term for an extremely large variety of business models. So, you know, we have design firms that we work with spend well over a million dollars a year with us. Every time we see them, we've got new stuff, they can write $200,000 orders at market at the drop of a hat. When they do installs across multiple projects, they have install teams. They have furniture texts there. They have a team around them. At the same time, we're going to be dealing with someone who maybe buys 10 pieces a year from us and maybe does three or four jobs and works from home. And has one part time assistant or none. Putting them together into the design community. and just collectively calling them the trade. - Yes, the trade is extremely challenging. And I think when you talk about the complexity of business models, if you're sitting in our seat and you build a pricing model, right, you've got those people who spend $200,000 of the drop of a hat looking at you going, "Please tell me that person is not paying what I'm paying for a product." Like that is not fair. Like I am a serious, serious customer, right? And then you've got that person working from their, you know, they're home doing a few jobs a year going, you know, I seem to pay more than some of the other designers and I can't compete directly with retail and make a huge profit selling your product to our customers. You know, how is that? I mean, you've got all these, you know, you've got the forces both ways and there's, you know, where we are. You're trying to, you know, have a business model that does cater fairly and equitably to this entire spectrum of the design community that goes from, you know, one man's shop to extremely sophisticated businesses doing very, very serious work. So how did you figure out how to handle that? How did you figure out how to address and scale? Do you have different, different pricing models? Do you have tiers? Do you go back to retroactively and see what somebody spent last year and kind of gray? I mean, how did you come up with a model to address that issue? So if I look, I'll explain the model, but, you know, in reality, we are doing a whole other exercise around stratification right now because there are so many nuances and subtlety to it where, you know, we have all these businesses that don't fit Niki into a category. You now have design firms that are selling products online. Yes. And you have, you know, you have retailers that sell some product online and you have retailers with design service. I mean, you know, so there is something, but essentially, you know, we have different sales teams. So we do have, you know, the normal employees that have a territory and work across the country. If you're a bigger design firm, you're going to have a dedicated relationship with a full-time salesperson, you know, as we used to in the industry. We also have internal sales. We have some people, essentially, our only business we do with them is online. They may have never been into forehands. You know, there's a ton of designers that never go to market ever. Yeah. And they may just have an online relationship with us where they, you know, they do a few orders a year. So they're getting a different level of service with us. There are different benefits they get in terms of SWAT programs, et cetera, et cetera. And we do also address it with pricing, you know. So absolutely, the more you spend with us and the more important we are to you, the more important you're going to be to us, absolutely. Well, and many designers, it's come up to me and they tell me, I mean, I was at a dinner just recently in L.A. And I think most of the room doesn't go to high point. Or right, and many of them have never been to high point. And just don't even have an understanding of it. And so how to your point, how do you touch and connect with those people? So again, I think that's, you know, circles back to our original discussion about just being so much more brand awareness around us where, and again, there are times really better than others. But in general, our ability to sign up as a customer online, talk with someone who will explain how to work with us best, have an online account, and get product to you where you are in the country. We've built out, and we've built a business model that absolutely does not rely on people having to come to market. And I think that is a, you know, again, it seems like a subtle shift. But a lot of the businesses out there are still the business model that essentially is based on the fact that people need to come to the showrooms and see you. One of our huge investments is in photography. So again, if you look at the forehand website, and we have a photo studio out here that is 25,000 square feet, 15 photo bays we have, I think 40 people on the team, you know, between photography and merchandising, and, you know, people who make the photography come to life. I mean, that is a big operation. And we do video, we show drawers opening and closing, extension tables opening and closing. So, you know, a lot of these are building digital assets that give people the experience and really give them the confidence to buy the product. - Well, it's interesting that you say that because I was keen to talk to you about this, Fred, my colleague, Fred Nicholas, just recently wrote an article about the heavy and ever-increasing AI usage in photography, right? And a lot of companies have found a great savings to be had by incorporating AI. You're not leaning in that direction. And I don't know if that is partially because photography is in your roots and sort of open the doors for much of your career and that impacts how you think about it, but tell me how you look at all of that. - So look, I mean, we have embraced them in the sense, you know, if we're doing 10 different fabric coverings for a sofa, we are happy to use, you know, digital method, you know, something to do that that isn't taking pictures of 10 different sofas or 10 different fabrics. - He doesn't even like to say AI. Get stuck in his throat. (laughing) But when it comes down to it, there is a beauty and a depth and a realness around creating a beautiful photograph that still beats AI. Will it be that way forever? You know, probably not. - Right. - But for us, I think it is a huge differentiator. And you know, there's a lot of things I've learnt over the years and talked about the history, but you know, one of the reasons prints often don't grab people the way an old photograph does is because of, you know, matrix dot printing or some printing methodology that the human eye doesn't know why, you just know it doesn't speak to you. In the same way that you've heard those stories of, you know, when people play final and the birds sing along to it and they play, you know, an MP3 and the birds don't care. (laughing) And I think there is something to do that with photography and you still see it and in art where someone doesn't know why, but a picture doesn't resonate with them. And I think there is still a huge value add to creating beautiful scene, putting the right pieces in it. The proportions are right and it shows how to use the, it gives the furniture context and scale in a way that, you know, we all see this, you still see AI pictures where someone's got seven fingers and three arms or something like that. And I think in the furniture, in a lot of them, there is some depth of field and other issues that just don't look quite natural. Now, I think it's an unbelievable opportunity and does a fantastic job of getting us 90% of the way there, but for now, forehands are still gonna create real images. - Yeah. - The other thing I wanted to circle back to you that you talked about with the customer experience, we just had our 30th anniversary party that you attended nightward. I've just had my 25th anniversary since I started with forehands. And when you talk about an experience and when one thing is that it is totally organic and honest, there is nothing manufactured about the customer experience. We never have these conversations or have had it forehands of like, what if we were really friendly to people? What if we had good quality drinks? You know, we're not trying to manufacture anything. You know, this is who we are in our DNA. We first came to the industry and I would walk by these trade shows in Vegas in the morning, you know, traips into the showroom, cup of coffee in your hand, and you'd see those 10 guys in suits in a circle having their morning meeting, you know, being led by a guy in a slightly more expensive suit. And then you look at our buyers who are mixed between, whether they're retailers or not, most of them kind of are wearing jeans or, you know, fairly casual. And that was one of the things that sort of struck me early on in the industry. I'm like, what is this mismatch in the experience of basically a pretty casual industry going into these suit and tie, you know, showrooms? And that to me was sort of a mismatch. And when we started out, you know, I wore a suit and tie to a few markets because I was told I had to. And then at some point, you know, basically I said, I don't want to do this anymore. And not because, you know, because it did feel, it just felt like unnecessary. And I don't think our customers really liked it. And I still think to this day, if they walked into the showroom and every salesperson was dressed extremely formally and had a very formal disposition, I think it's just a, it creates a different environment. So, you know, we do think about it in those terms. - Yeah, and it makes sense. And again, I think it seems like it's part of the brand. So coming back to this brand and understanding what forehands is really all about, it seems like there's a hospitality element to it. Even though PS, you've only recently created an actual hospitality division to go after that, right? - Sure. - So tell me about that. - It represents a huge market and opportunity. I mean, I think, you know, easy to be, you know, 20% of the business. But it's also, it can be countercyclical to residential. So I also view it as just, you know, a great addition to the business, you know, overall, because as you know, through times, there's times that hospitality booms when residential isn't and there's times when residential is booming and hospitality is absolutely dead quiet. And I think being stuck in, you know, it just, it feels more balanced to have a foot in both of those, in both of those games. (upbeat music) - We're taking a quick break to remind you about Laloi. We all know great design depends on more than what you see. This fall, Laloi opened a new distribution center in N.S. Texas, expanding the company's capacity to serve its growing network of business. designers and retailers. The investment means more space to stock a growing assortment and more infrastructure behind getting the right product where it needs to go. For LaLoi, original design and dependable service have always gone hand in hand. As the assortment grows, the commitment to being a stronger partner grows with it. Learn more about what's new at LaLoiRugs.com And now, back to the show. And I want to come back to Wayfair and some of these other big companies because Wayfair has decided, "Hey, you know what, we need a bunch of stores. Forget this online business that we've been burning through three or four billion dollars to build. We need a bunch of locations, so we need them like now. And suddenly they're opening, I don't know, 10 Wayfair stores that got a couple of paragold stores open and I assume many, many more to come there. You're a big partner of theirs. How do you look at that? How do you think about that?" Well, I mean, my first reaction when they told me about it was, was definitely head scratcher. I mean, I left the meeting like, you're doing what? Like, I thought the entire genius of your model was not having, you know, physical retail stores. That's what they told us, though. Yeah, yeah. But I think it speaks to their ambition as a company. I mean, they are, they're in it to win it. There's no way around us. Yeah, they're in it to win it and they've obviously realized, and again, whether you want to say omnichannel or whether you want to be where the customer is and meet them where they are, sure. We all want to meet everyone where they are. Sure. Versus what, meeting them where they're not, I guess, what the other side of that is. But I just, it's fascinating to me that they shifted so quickly and now they seem to have an urgency. And before it was like, oh, we opened a store and we'll see how that does. But now it seems like pedal to the metal with getting doors open. Yeah. And I think with the paragold ones, I mean, the first thing when I went to the first paragold stores, I was pretty impressed with how they pulled it off because in my mind, you know, when they first described it, I wasn't sure if we were going to have something that resembled the TJ Maxx or a, you know, a factory outlet. Yeah. And they didn't, and again, I think there's something they're useful, they are doing in the market, which, you know, there is a place for us. It reminded me, do you remember the great indoors part of the CS brand, you know, where you could go there in that furniture, but they also had, you know, done aware and cookware and plumbing, fixtures and all that. That was my first reaction. And I was like, okay, so, you know, in that old thing of like, everything old is new again, you know, it was interesting walking around that store and seeing that, you know, you can buy bathroom tile, you know, kitchen, bath fixtures, all that kind of thing. And I think that that is an interesting offering. And obviously from what they do with their online business, they've got some pretty ferocious data to work with on, you know, on what people are looking for. Well, exactly. And they've, and they've always talked about being such a data-driven company. Yeah. And here is where all of that data is, is really going to help them to understand. And listen, getting back to the designer and, and the challenge there, I think initially a lot of designers wrote to me saying, oh boy, all of our, all of our high point brands are now going to be available on paragold. And suddenly they're going to be in these stores. Am I going to have the same exclusivity? Am I going to have the same pricing model? And, and my client's going to be able to see everything. And I think, I think that is going to create a shift in how designers think about that part of their, of their model. What are you? Yes. Well, I, I just called a few moments of your, uh, Ambulus interview, finished that. And, you know, obviously the first thing was intimidation because she's such a, she's a tough act to follow for you, Matt, you know, I mean, yeah, she's a tough act to follow and, uh, you know, has the media eating out of her hand, you know, she, she's a great talent. But, uh, you know, she referenced the same thing is that just as we are designed as having to constantly evolve their business model and how they make money from their customers and what, again, you know, what feels good to customers and not so absolutely, you know, we're in a day and age where I don't think anyone's business model and the side of the industry gets to stay static for very long. It just doesn't because things that were true two years ago and not true today, things that were true five years ago aren't even on the same, you know, board anymore. So it is going to be a constant evolution for the design trade of, you know, how do they have a business model where, you know, in the end, what the consumer is getting from them is tons of years of experience and putting together a great look for their house and making their house look infinitely better than it would without them. And how do they get compensated for that service in a way that everyone feels good about it? Exactly. And it's the compensation part. And it's one of the challenges that the design industry often has is that there's this perception of 10 different designers, 10 different pricing models, what kind of business is this? And am I the customer or the client getting the best deal? Am I getting the best price? Am I, do I understand how this all works? But you say that, but should they be getting the best price? I think for the best design, this is like, are they getting the best outcome at an acceptable price? You know, I think for any designer to be, you know, in a process, in a position to say, never in any way will you find anything you buy from me cheaper anywhere in the next 12 months, you know, setting yourself up for failure. Of course, at some point, something they bought is going to be 20 percent or from some person who's getting rid of something. I think that's such a great point because I think we need to, I think designers would be well-served to your point, to move away from, as you were just suggesting, almost this price assurance model, right, that you'll never find a better price than good old, denises design for them. I give you the best price every day, seven days a week. That's ridiculous, especially with all of these different online retail, everybody is having to compete on price today. Right. Right. Right. Absolutely. So, you know, that is not a business model that I would suggest. Should we talk about designers taking a social media mat sometimes and calling people out or, I mean, and some lessons there because, you know, I think you've handled some heat. Yes. Yeah. Tell me about that. Yeah. Obviously, you know, we had an incident a few months ago where a designer took a fairly solid shot at us and it sort of took off on a life of its own and got all kinds of attention and the great thing about being in my position is at least 45 people felt the need to text me that day and point it out to me. So, I did get a lot of awareness of it. First of all, let's just break it down. They took to social media and what were they upset about? What had happened? What were they calling out? Yeah. No, but it was a small design firm and then, you know, made a presentation for Instagram that said we're breaking up with four hands, you know, due to quality and customer service and, you know, et cetera, et cetera. Yeah. And I did land up speaking to the lady in a very nice lady, but, you know, we learnt a lot from it. So, obviously, there was a ton of reaction to it, and you saw everything from, you know, people piling on to a conversation about how the entire industry sucks. We had our competitors going, "Bye for us, bye for us, we're way better." We had ex-employees, you know, piling on there, and we had a lot of people come to our defense, there was a ton of activity around, this seems a little unfair of a way to handle this, and probably not the best way to, you know, to air grievance, and there were things that we were aware of, and there were things that maybe we were aware of, but not the extent of some of the feelings and all of that. And, you know, we took it very seriously, and, you know, there were some things that had sped up that we took action on. So, you know, to give you an example is, there was a lot of comments that our freight rates were high. Right. We were aware of some of that, in all honesty. The reason we hadn't changed them at this point was because we just had the Iran war breakout, and diesel prices were going up. So, we were in this, like, you know, how do you adjust pricing on outbound shipping when, you know, all our shipping costs are going up. So, we were sort of in this, you know, no man's land of, like, we want to do something, but we got to see it. And we realized we were playing on our time frame, and not on our customers. So when you get that feedback of like, hey, this just feels out of market, and it's really annoying us. You're like, I mean, there's just a wake-up call to be like, hey, we can't always deal with everything on our time frame. We need to handle some things, you know, on our customers' time frame. So we took some fairly immediate action, you know, around things like that. Yeah. And it came at a time where you had had some internal technology struggles, right? Which we should also talk about, and so you had been, and listen, you'd already been dealing with tariffs, you'd already been dealing with all of the many challenges that have been thrown at us in the last few years as an industry, and trying to relocate some of your manufacturing to different countries, which you thought was what the administration was encouraging you to do, and that you would be rewarded for that. But that turned out those rewards, perhaps, are still in the future. We'll see. But talk to me a little bit about that, because we had a guest on not too long ago who talked about technology upgrades often can-- Sure. --in the agenda. --so we had a 20-year-old. old system that, and again, as a student of business, we all know that changing ERP systems is one of the handfuls of things that kills businesses. Don't do it. If I can give people the advice, don't do it. Yeah, don't do it. So we went into it, eyes open, we thought we'd hide the right people, we did all the research, and we went about it as diligently as we do everything, and we were really hoping for a fairly positive outcome. And it was not a problem about it. It put us in just a really, really horrible position, just the most sort of unbelievable position, where we lost a lot of transparency into where our product was and whenever it was arriving. And you know, we had these sort of, we put us in having these ludicrous conversations of people where you can't even believe you're saying, like someone's like, how can you not know where this product is, and we're like, we're staring at a blank screen, yesterday I said it was going to be a tomorrow, and then today it says it's going to be seven months. But you know, it obviously joking aside, it really impacted the customer experience. It also put unbelievable strain on our teams. And the way we had to compensate for it was by hiring people and putting a lot of manual workarounds. But the truth is a lot of customers had really, really tough experiences. Yeah. And we were very well aware of it, but we're sort of somewhat powerless to change. It just had to be worked through. And we've got through a lot of those. And then you sort of alluded to it at the same time, we went through the whole tariff thing where, you know, we moved a lot of product from one place to another. And when you do that, no matter how well you do it, the supply chain, you know, we spent 20 years building these highly efficient international supply chains. And you know, the first runs of production aren't going to be done on time. And lead times are not known. I mean, you're pining new territory. And you know, that's sort of exasperated the situation too. And I also think there's going to be a fixing quality that you don't pick up right away when you change, you know, change these things. So, you know, when you compound all these things, I think we've had a challenge. We've definitely had a very challenging last year. And you know, we're very glad to be through the worst of it. But yeah, it was a, it was definitely a tough year. Would you say it was the toughest years since you've been there? I mean, just mention you've been there for 25 years. I mean, was this, was this the worst of it? Or do you still feel the global financial crisis, perhaps, even? No, no, no, that was challenging in a different way, but it was sort of, everyone's in the same boat. I think in terms of the timing about ERP change as well as just because we do import from nine countries and about 100 different factories, you know, I think for us, the whole effort around, you know, moving products and the challenges with it was probably bigger than, you know, than some other companies faced. So, I would say, you know, without doubt, in terms of a feeling of sort of helplessness around, you know, some of the stuff that was definitely the toughest time we've ever been through as a company, because it was also just so out of character of us, you know, if this company has great customer service and, you know, and a lot of times industry leading technology where people like buying from you guys is the best experience, you know, in the industry. And then at times being like, you know, being absolutely, you know, basically driving your car at 100 miles an hour with your eyes closed, you know, and it, you know, for me, even personally, it was, it was a, you know, it was a really sort of unpleasant time because it's so at odds with who we are as a company, but there's nothing you could really do about it other than just get through it. And it sounds like you've, you've largely gotten through it, you have, you have the visibility that you need. Yeah, yeah, yeah. Okay. Well, now we're in the position where we can start actually having it make things better than we were before as opposed to just trying to catch up to, right, you know, to getting where, you know, to the sort of as good as we were. Okay. Okay. So, it seems, it seems hopeful. Let's talk about, you mentioned Amber Lewis earlier. For a long time, it was all about your own product and, and it seemed as though you never really wanted to collaborate with somebody else along came Amber Lewis. It seems so worked out terribly well. Yeah. If I read the things correctly. Yeah. Yeah. In all honesty, we were never keen to do it before because the whole celebrity concept just never resonated with us, which was, you know, you get a famous person and whack their name on a bunch of furniture and do that. But, you know, the difference, you know, with Amber is she's genuinely a creative person with a perspective and a point of view. And, you know, she's got a super coherent look that all works together and I think it's really added something to the company. So, you know, from that perspective, it's been a massive success. It's also sold unbelievably well, so, you know, that's helped too. But to your point, you know, we're not looking to go and sign up a whole bunch of other designers and have a whole bunch of collaborations and not focus on our brand. It really has to be something where it really fits in with who we are and adds something to the company. Well, and to that point, last time you were on the show, I think you suggested that the business was doing around 500 million. I don't know what the business is doing today. I don't know how much you've grown since then. Quite a bit. No, we've grown substantially. We're closer to a billion than 500 million now. Okay. So getting close to the billion dollar mark and where has that growth come from? So what's going on all cylinders? I mean, Amber's collection sounds like it's done tremendously well. It sounds like hospitality as we were talking about earlier. It's been well received. But where's the real growth driver for you today? So, you know, we do measure the company in each of those channels, you know, from e-commerce, retail, design, hospitality, et cetera, and every single one of them is growing. So you know, for a while, retail was stagnant for a couple of years. It wasn't moving at all, but they've come back as well. I think the retailers have found a way to be relevant and grow their business again. So our growth, it's not coming exactly equally, of course. But e-commerce, obviously, doing incredibly well, the design community is doing incredibly well. The retail has found it's footing again and it's solid. You know, it's not going to grow in the boom thing, you know, to the boom numbers that others are, but it's growing nicely. So when you say retail, are you talking about traditional retail, yeah, physical retail, people that buy a product and put it on a retail floor and net business is growing. And then the hospitality is off to, you know, it's off to an incredible start. So it really is coming from everywhere. Okay. Well, so how is that possible, Matt, when I'm told that the housing market is frozen and I don't, I don't see any signs that things are going to get all of that much easier in the short term rates move, move to the opposite direction that many thought they were going to. I don't, I don't see what's going to get easier. I think AI is going to be very disruptive. I think, and we haven't had a recession in how long I mean, at some point, and correct me if I'm wrong, what tends to lead to recessions is oil spikes and the fed increasing rates, both of which we seem to have right now, which makes me wonder, do we need to be looking in that direction? And are you thinking about that? Is that a concern that you have looking out into the future? So look, one of the things I've never done is wait around for better times. And it's always something, you know, there've been so many of those conversations in the industry over the years where people are like, we're just treading water and that's why we're not introducing you product right now. We're just treading water until, you know, good times come. I have never thought about it that way. I've always sort of charged full steam ahead and doing, you know, how do we, how do we do the best we can, you know, every single day? But I always step back from it and go, the good times bring opportunity and the bad times bring opportunity. They both do. So you just kind of have to, you know, you just have to chill out and just ride through the good times, but you'll accept to ride through the bad times that both going to create opportunities and you've got to jump on those opportunities. My biggest fear is not moving forward. Yeah. I don't think you can maintain, no one can maintain sort of homeostasis. So if you're not moving forward, I feel like you're going to move backwards. Do you think it gets any easier in the, in the coming years? Does, does something meaningfully change? Do we ease off of tariffs? Do we, do we move? I mean, what, what, what do you think? How would love to believe it's going to get easier, but there is absolutely zero evidence that anything is going to get any easier? I mean, I think, I mean, I don't know if it's spacious, like the speed at which things just come at us just seems to increase. I think what I look for out there in the future is how does the politics around our industry change? You know, one of my concerns is we're this weird size industry where we are big enough at times to get attention paid to us, like the 232 tariffs on, on a poultry. Right. But we're not big enough say to be automotive to where they can be a public outcry of like, hey, we need something to change. And one of my concerns is does the industry get left, you know, over the next few years in this sort of weird political situation where we begin an industry that gets left with an entire, you know, load of these political choices of the moment, but we're not quite big enough for there to be, you know, to be changed later on that sort of rectifies them. You know, one of the things I look at is we've got that weird Chinese anti-dumping [BLANK_AUDIO] bedroom law that has been around as long as I've been in the industry like you know 25 years It makes absolutely no logical sense that you know that Chinese bedroom furniture is getting dumped on the market The other isn't but you know that tariff got put in 20 something years ago It's never changed. It's still sitting there You know one of the things I've always felt I've always you know over the years I've always felt that Essentially there was fairly limited government interference in our industry. You know, I mean We're making people's homes pretty. This isn't defense or You know, in these other things. So, you know, there's been fairly limited intervention and we've run these businesses I think from a sort of very non-political perspective and I think it is a you know, it's a whole new territory to deal with it if we're going to be dealing with constant sort of shifting political wins around the industry. I think is you know, adds a different dimension that we've never had before and You know, I think that's the one I'm waiting to see how that plays out Well, and you mentioned the many places that you currently produce furniture Can you imagine growing or consolidating that list if if things were more or were better spelled out with with what the rewards were? Well, I think what you're referencing is there is a little bit of paralysis in the industry right now You know, if like way to invest money. So as an example During the first Trump administration where we put tariffs on China We got a very clear message of hey, like the you know, the country would like to see you Move out of China a bit. So we did that and we invested a lot of time and money in Mexico and you're sureing Product and we felt like that was a message being sent to us. It's like make it in North America You know, there's there's North American raw materials going into it. There's a whole bunch of good things that happen But then we got a sort of 232 tariff put on Mexican upholstery which sort of makes it now non-competitive But it doesn't make me want to go and invest a whole bunch of money or time anywhere else Until this sort of as you pointed there's got to be a little more direction of where this whole thing is going Do you feel like four hands's future is more in your your own hands and less in the hands of the of the crates and the RHS Then it was 15 20 years ago. Oh, absolutely in every way in my early days in the company. There were times that Up top three customers made up 50% of our revenue. Wow And I mean we used to work with this one business consultant every quarter when we got together He's like I'd like I really want us to do this project where we analyze the business and what it looks like if we lost one of those top three Customers and I was like it's a really simple analysis We don't need to spend a lot of time on this like we're out of business We would fold and that right exactly But right now, you know our biggest customer is less than 6% of our revenue. Is that right? Yeah, so You know, we're in it. We're in it. It's a entirely different playing field entirely different playing field So now it's just it's just interesting to watch all of them evolve and and see what happens But less of a waking up every every morning needing them to succeed to keep your business going Absolutely. Yeah, and and and what do you make of that landscape and and who do you think is is winning or or or doing particularly well? I mean some days it when the stock market seems to be favoring way fair a lot these days And I've noticed that our house has had quite a big move recently, too So I don't know what people are feeling good about there our age Less enthusiasm if you just look straight at the stock price, so I don't know Yeah, and I mean William Sonoma does great. I mean their stocks seems to perform pretty well near all time highs again Despite despite the housing crisis and everything else William Sonoma Right right at all time highs. So yeah, they they seem to have figured some things out Well, I would say one of the the effects of the the tumult of the last few years Is it is it always favors the big? I mean, and that's one of the things that I really don't you know really bums me out about it quite honestly is that I think it's so important for the country and for the industry to have smaller businesses, you know, and to have all these businesses, but you know if you look at the regulations around tariffs You know, we have a department that does nothing but enter a bunch of tariff codes all day every day that You know that these people didn't exist three years ago. I don't know how a small mom and pop importer You know is gonna navigate you know all these challenges So I think what you're talking about is you know all these companies are doing pretty well and they're gaining market share Is I think that tumult does favor the larger companies. Well, and and and finally Matt as we wrap up Where do you want to go next with all of this? So you mentioned the companies just hit 30 years. You're 25 years in Where do you where do you want to take this? What what's going to seem meaningful to you in the next five ten years? If you imagine yourself still still doing this. I'll still be doing it There's a few there's a few years left in the old boy Look, it hasn't changed that much for me what you know what it's always going to be about is How do we keep on evolving the business to being at the forefront of being relevant having great product in getting it to people and servicing our customers in a way they want to be serviced And that and that really isn't going to change And for me, it's always about just you know improving the company improving our offering improving how we work with our customers And just getting better in every way. Yeah, well, it makes a lot of sense It's it sounds like you don't think things are going to get any easier, but you're not you're not going anywhere So somehow you're still you're still enjoying it despite the many challenges at the industry faces Yeah, and maybe I'll be super pleasantly surprised in the next few years There'll be a whole six to nine months when nothing crazy happened And you don't have to reinvent everything and the things just Go smoothly and I'll go down to a three-day a week work week. It'll be awesome Yeah, I could really imagine that for you. I hope so maybe it'll get you back to the ski slopes I yeah, I wish that for you Matt It's it's a pleasure to get to speak with you and I thank you so much for making the time. Thank you Dennis Thanks for listening if you'd like to keep up with the latest design industry news visit us online at businessofhome.com Where you can sign up for our newsletter browse job listings and join our B oh H insider community for access to online workshops A free print subscription and much more if you have a note for the podcast drop us a line a podcast at businessofhome.com If you're enjoying these conversations, please leave us a review on Apple podcasts It helps others to discover the show This show was produced by Fred Nicholas and edited by Michael Castineda. I'm Dennis Sculling Thanks again for listening and I'll see you next week