Given your career and your long time in the industry, I’m curious about what you think about the relative headwinds in this business. Obviously, Covid was a discontinuity but I’m wondering if people are moving around less because of affordability issues and mortgages. For example, they’re locked in at 2% or 3%, and in a hybrid working arrangement where they are at home more than pre-Covid, but less now than in maybe the last two years? There is less household formation and it’s still lagging behind where it probably should be, with less movement in general due to the affordability of new homes. How do you look at the different variables and assess what the cycle should look like from here?

If you look historically at home furnishings, the biggest indicator is housing sales. When housing sales start to drop, there is a lessening demand for furniture simply because if people aren’t moving, they don’t need as much. We saw a huge increase in business during Covid because of second homes. The great thing about second homes is that when someone buys them, typically, they have nothing so they need to buy all their furniture immediately, whereas if it’s your primary home, typically you already have furniture that you move so, in many cases, you don’t buy right away. The second home market is softening so yes, absolutely, lower home sales will lead to slower demand for home furnishings.

Given your career and your long time in the industry, I’m curious about what you think about the relative headwinds in this business. Obviously, Covid was a discontinuity but I’m wondering if people are moving around less because of affordability issues and mortgages. For example, they’re locked in at 2% or 3%, and in a hybrid working arrangement where they are at home more than pre-Covid, but less now than in maybe the last two years? There is less household formation and it’s still lagging behind where it probably should be, with less movement in general due to the affordability of new homes. How do you look at the different variables and assess what the cycle should look like from here?

The last recession we had was in 2008 and that was a bad one; we lost 40% of our business overnight. The difference is that it has slowed down this year. I think, on average, people will tell you their business is down anywhere from 22% to 30% compared to the previous year. You have to remember that 2021 was a huge year, so if I look at my business – and I don’t think we’re very different to others – my 2021 versus 2019 business was up about 55%. 2020 was a strange year because we had no business for a large part of the second quarter and then huge business for the third and fourth quarters. Therefore, if I’m now down 32% from 55%, it still means I’m up 23% – dollar wise – over 2019 which is still pretty good.

With the contemporary, they talk about the materials, such as the upholstery coming from Savile Row, or that they are getting Italian fabric to put on some of the sofas.

You have Mathis Brothers, which is okay, but they have a lot of the mom-and-pop stores which are horrible. Why would somebody want to go into those stores and spend big money? Then you walk into a RH store and it’s magnificent. You feel like if you buy there, you’d feel wealthy. You’d feel privileged to be able to buy it. It’s just a great experience, it’s beautiful. I don’t love their furniture – it’s okay – but I would go into that store and I would furnish my whole house because they just make it look so great and so easy. You can have a drink, you can have a meal, there’s so much you can do.