Gracie knows how to endure an economic downturn. Although founded in New York in 1898 by James Gracie—the great-great-grandfather of the current fifth-generation sibling leadership team, Mike and Jennifer Gracie—the company was transformed into the interiors brand of today by James’s son, Charles R. Gracie. In the 1920s, the brand, then focused on interior moldings and Chinese porcelain, boomed in popularity, attracting the era’s top designers, including Elsie de Wolfe. In 1927, Charles started working with a hand-painted wallpaper studio in Beijing on the product that would eventually become the company’s bread and butter. “Charles R. felt he could sell anything that wasn’t nailed down, so he had a new product that he couldn’t wait to sell in New York,” Mike Gracie, the company’s president, tells Dennis Scully on the latest episode of The Business of Home Podcast. “That was quickly followed by the [Great] Depression, the first roadblock to the development of the hand-painted wallpaper business.”

The company survived through many global challenges, including World War II and China’s Communist revolution, until Jennifer and Mike’s father, Brian Gracie (now chairman), purchased the business in the 1970s. That’s when the company’s leadership pivoted to focus on building up the wallpaper side of the brand, forging a partnership with a studio in China that has continued for more than 50 years. “There’s an enduring appeal for hand-painted Chinese wallpaper. It’s clear for so long now, the opulence that it brings to a room, and this beauty and specialness looking back through the decades,” says Mike.

He and Jennifer took over more than 10 years ago, and are now battling the brand’s next economic opponent: tariffs. The company immediately felt the costs of the recent tariffs, having to pay for open orders to meet their deadlines. The family has decided not to raise the prices or put in a tariff clause for as long as possible. “Things have seemed so tumultuous, and we wanted to try to be relatively calm in a sea of uncertainty,” says creative director Jennifer Gracie. “That was our plan, and we hoped that it would only be a couple of weeks before the tariffs were reduced, and it wasn’t a couple of weeks.” The duo felt a wave of relief last week after the tariffs were reduced, and they hope it continues. “We have no choice. This is a Chinese art. It’s like saying, ‘Let’s make Italian shoes in Iowa.’ It’s not an option for it to be made anywhere else,” she adds. “It’s a Chinese craft that was invented there in the late 1600s, so it will continue to be made there. We have a very strong relationship with our artist family, and so it’s very important to us to support them.”

Elsewhere in the episode, the siblings discuss their efficient business setup in China, their love for antiques, how they have expanded their brand’s design offerings and reach, and why they decided to go back to having in-stock inventory.

Crucial insight: Gracie has long had a roster of notable clients, such as Alexa Hampton and the late Mario Buatta, and the company treats designers as an integral part of its ordering process. “We love our interior designer clients. They are so essential. Homeowners get overwhelmed. They start to worry about the turn of every butterfly wing, and the direction of every leaf, and they do tend to get bogged down in the details,” says Jennifer. “Designers are so important in helping homeowners see the big picture, and we couldn’t live without them.” For custom orders, designers work with their clients’ ideas and will offer some samples before approving the final design. The order goes into production and right now can be produced in 14 to 16 weeks. “Each panel takes, depending on the design and the background material, about 80 to 120 hours. We don’t put little orders before big orders. We don’t feel it’s fair, so we actually just do things in chronological order from the date we receive it. And I don’t think that’s terribly long,” she explains.

Key quote: “I say to people sometimes that this may not be the product for you, because it’s not made with machine-made precision. So sometimes people will look at our silk wallpapers and say, ‘Oh, I can see the seam.’ And I will say, ‘Silk is not for you, then, because you will,’” says Jennifer. “I actually love seeing those little things that some people might call imperfections, but that I see as being able to see where that artist touched that paper.”

This episode is sponsored by Ernesta and Thibaut. Listen to the show below. If you like what you hear, subscribe on Apple Podcasts or Spotify.

The Thursday Show

Host Dennis Scully and BOH executive editor Fred Nicolaus discuss the biggest news in the design world, including a tariff rollback, Lawson-Fenning’s surprising deal and the rise of the recliner.

This episode is sponsored by Jaipur Living and Crate & Barrel. If you like what you hear, subscribe on Apple Podcasts or Spotify.