Interior design is a beautiful business, full of bold colors, vibrant imaginations and overflowing inspiration. It’s also a welcoming place, decidedly more warm and fuzzy than other creative fields like fashion or entertainment. What the design industry is not is clear and orderly. It’s a knotty business, with complicated layers of rules regarding who can sell what to whom, and for how much. Stephane Silverman—founder of fabric brand Castel and president of the Decorative Furnishings Association—has made it a lifelong mission to try and untangle at least a few of those knots.
Most of them have to do with pricing. For example, the notion that fabric brands who sell exclusively to the trade have both a net price and a retail price—even though they don’t sell to consumers—has long been a sticking point. The irony is, of course, that the retail price is higher, even though the presumable level of service (no CFAs, no samples, and so on) is lower. “I ask anyone out there to please explain to me, because after all these years I’m still stuck on this. If we’re selling ‘retail’ at a higher price than trade net pricing, but we’re not offering trade services, there is a disconnect in my mind,” he tells host Dennis Scully on the latest episode of The Business of Home Podcast. “Trade is not wholesale. Trade is trade.”
Most of what Silverman argues for is clarity: fixed, publicly available pricing for brands in the design trade, even if they’re only doing business with designers. The need for more transparency, he argues, has gone from “would be nice” to “essential” in an age where retail brands are pitching their business to designers and online sellers are flooding the market.
“There are lots of cross-channel pieces that are mixed, fuzzy and difficult to identify. I think this is part of our Achilles heel in the trade—when you look at the retail giants coming in and catering to the trade customer, they’re clear. Everybody knows what price is what, where the markups are and for what reason,” says Silverman, arguing that retailers’ ability to list prices publicly allows them to define their brand in consumers’ minds. “Everyone is saying RH is luxury. Well, how did they do that? Not because they have a pretty picture and say ‘inquire for price.’ Because there is a price.”
In a fascinating discussion on the intricacies of the modern trade business, Silverman weighs in on Fabricut’s recent decision to pull out of online retail; Material Bank’s past, present and future; and whether the home boom will last.
“I’d say this is a perfect time to start making changes and to start gingerly and carefully investing into the future,” he says. “I don’t think [the increase in home spending] is going to last. People are going to start spending on their travel and stop spending on their drapes and carpets and on fabrics … What I would say is: be smart, be conservative, take it in, put your money in your coffers, but invest in where you see the future of our business.”
Listen to the show below. If you like what you hear, subscribe on Apple Podcasts or Spotify. This episode was sponsored by High Point Market and Modern Matter.