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Labor Day usually marks the slowdown. Not this year. From corner offices to checkout lines, businesses are scrambling as shaky markets test prices, patience, and loyalty. Tech is still the flashpointAI is fueling record demand while doubling as cover for layoffs and financial gymnastics. IPOs are slowly coming back, but only for companies that can prove theyve got the growth to back it up. Meanwhile, D.C. drama over tariffs and the Fed is shaking currencies, commodities, and investor confidence. On the consumer side of things, it was all about value this week. Retailers and restaurants are leaning on old tricks to keep shoppers spending. Housing is caught between too many unsold homes and buyers who cant afford them. And gold? It just smashed a record, flashing a warning about the nerves running through the economy. Heres your week in business: Oracle lays off thousandsor moreglobally amid rapid AI shifts A freh wave of cuts came this week at Oracle. The cuts expanded beyond 101 Seattle layoffs disclosed in state filings, with posts from Kansas, Massachusetts, and Texas suggesting a broader reduction. Anonymous boards noted that thousands were exiting company Slack, though Oracle hasnt confirmed totals. The belt-tightening contrasts with record stock highs and astronomical cloud/AI demand Larry Ellison touted. Translation: Oracle is racing to fund capacity while reshaping talent for its AI-first road map. Amazon ends Prime Invitee; household-only Family sharing begins Oct. 1 Amazon is sunsetting the Invitee program that let members share shipping perks beyond their household. The replacement, Amazon Family, limits benefits to one co-adult plus up to four kids (and legacy teen accounts), consolidating broader Prime perks under one roof. The move mirrors streamings crackdown on out-of-home sharing as Amazon chases higher paid conversion. Expect some churnand clearer attribution on whos paying for what. Frozen veggies recall: Endico peas, carrots, and mixes flagged for listeria Check your veggies! Endico Potatoes voluntarily recalled 2.5-lb bags of peas & carrots and mixed vegetables sold in six states and D.C. this week due to listeria concerns. No illnesses have been reported yet, but consumers should check lot codes and return affected bags for refunds. Listeria can be severe for pregnant people, seniors, and immunocompromised individuals. Retailers will be watching inventory pulls and shrink; brands will be revisiting QA and supplier audits. Homebuilder inventory hits 2009 levelscreating room for deals Completed but unsold single-family homes rose to 121,000 in July, the highest since 2009. While the Finished Homes Supply Index shows slack growing, its nowhere near the 200708 extremes. Pressure is sharpest in Sun Belt markets like Florida and Texas, where resale listings run hot. Expect incentives, price trims, and rate buydowns in oversupplied metros as builders protect pace. Gold sets a record above $3,551safe-haven bid returns Gold hit a record high this week. The surge caps a year of +36% gains, fueled by macro jitters, a softer dollar outlook, and expectations for a near-term Fed cut. Legal uncertainty around tariffs and escalating pressure on Fed independence add to haven demand. Non-yielding assets typically shine in lower-rate regimesand traders are positioning accordingly. For portfolios, the move is both a hedge and a sentiment signal. Trump to seek expedited Supreme Court ruling to save emergency tariffs After a 74 appeals court decision found broad IEEPA-based tariffs illegal, the administration is planning a fast-track appeal. If the Supreme Court curtails tariff power, the government could face duty refunds while pivoting to other authorities (e.g., Section 232, Smoot-Hawley §338). The case tests the major questions doctrine against executive trade leeway. Markets are bracing for policy whiplash into 2026. Lucids 1-for-10 reverse split fails to stop the slide LCID executed a reverse split to maintain Nasdaq compliance this week, consolidating shares ten-to-one. The stock still fell double digits post-action and remains down sharply YTD amid missed revenue expectations and steep losses. Reverse splits dont fix fundamentals; they buy time. Investors want delivery scale, cost control, and clearer demand signals beyond flagship models. Klarna sets $35$37 IPO range, eyeing a ~$14B valuation The BNPL pioneer filed to sell ~34.3M shares on the NYSE under KLAR, aiming to raise up to $1.27B. The valuation is well below the 2021 peak but reflects renewed IPO risk appetite for profitable (or near-profit) fintechs with durable top-line. Klarna posted 2024 profitability on rising revenuenow it must show operating discipline at public-market scrutiny. Execution post-listing will determine multiple expansion. Via Transportation files to go public at up to $44 a share The transit-tech operator, heavily tied to government contracts, is targeting a valuation up to ~$3.5B. Company revenue more than tripled since 2021, though losses persist with a narrowing trendline. The pitch: software-led, dynamically routed transit that augments aging bus networks. Investors will parse contract durability, unit economics, and path to profit across cities and rural deployments. Stocks notch worst day in a month as AI leaders drag Nvidia, Broadcom, and other AI beneficiaries led declines, with the S&P 500 off ~1.2% and yields climbing. Rising long rates, debt sustainability concerns, and political pressure on the Fed weighed on multiples. Tariff-lgal uncertainty added noise to Treasury trading. Defensive pockets (hello, gold) outperformed as investors rotated and trimmed froth. McDonalds revives Extra Value Mealsfor now Starting Sept. 8, the chain brings back bundled Extra Value Meals about 15% cheaper than la carte, part of a broader value push alongside $5 deals and nostalgic promos. The goal is traffic: meet cost-conscious diners where they are without deep margin erosion. Expect mix shifts toward bundles and potential competitive responses from rivals. Limited-time framing creates urgencyif it works, dont be surprised by an encore.
Category:
E-Commerce
Last month, the online prediction market Kalshi filed some very dry but potentially very lucrative paperwork with the federal Commodity Futures Trading Commission (CFTC). The company, which allows users to predict real-world event outcomes that range from election winners to the annual number of U.S. cases of whooping cough, announced its intent to offer markets for football point spreads, totals, and individual touchdown scorers, too. In other words, Kalshi users would no longer be limited to predicting game results, awards winners, win totals, and end-of-season champions. Instead, they would be able to make these sportsbook-style wagers on the platform, without going through a state-licensed sportsbook to do it. Technically, Kalshi doesnt take bets or set odds itself, and the company carefully avoids referring to its business as gambling. Instead, it enables customers to trade event contracts priced between 1 and 99 cents, where the prices roughly correspond to the percentage chance that the market believes a given outcome will occur. Kalshi, which allows trading both on its own site and also through its partnership with Robinhood, makes its money on transaction fees. When the market resolves, those who hold the winning position are paid out at $1 per share. For example, if Kalshi offers a contract for whether Justin Jefferson catches a touchdown on Monday Night Football, and Jefferson promptly reels in a 77-yard bomb and then hits the Griddy, those who bought shares in the yes position would get to cash in. Those who banked on Vikings quarterback J.J. McCarthy struggling to throw downfield in his regular-season debut would get nothing. (As of this writing, Robinhood allows users to bet on some sports outcomes via its Kalshi partnership, but doesnt yet offer Kalshis prop bets.) Given how ubiquitous sports gambling has become since the Supreme Court struck down a near-total federal ban in 2018, the distinction between buying an event contract on Kalshi and placing a conventional bet on the DraftKings app might seem irrelevant. But there are differences that matter. Because Kalshi is regulated by the federal government, its contracts effectively enable people to skirt local regulations and place bets in states where sports betting is still illegalamong others, California, Georgia, and Texas. Unlike state-licensed sportsbooks, federally regulated exchanges like Kalshi are also not subject to state-mandated procedures for reporting suspicious sports betting patterns. Last year, Toronto Raptors forward Jontay Porter received a lifetime ban from the NBA for tipping off bettors that he intended to fake an injury to ensure that his under bets would hit. The NBA opened an investigation after sportsbooks found that prop bets on Porter, a fringe player on a bad team, were among the biggest winners of the night. If a player were to try the same stunt on a platform like Kalshi, it might be more challenging to find out that the game is literally rigged. In most states, users must be 21 to use DraftKings or FanDuel. Kalshi users, however, need only to be 18. Studies show that problem gamblers are disproportionately young men, who now have the ability to gamble away paychecks, inheritances, and student loan money via smartphone app. In my view, the nationwide availability of a lightly regulated platform that functionally lowers the gambling age from 21 to 18 is troubling, to say the least. Like all exchanges, Kalshi is subject to CFTC-required integrity and surveillance requirements. It also works with a third-party service to monitor for suspicious sports betting-related activity, and recently debuted responsible risk management tools, like those in use at sportsbooks, that allow users to cap their deposits, take breaks, and opt out of market access. That said, when asked about consumer protection concerns earlier this year, a lawyer for Kalshi said, People are adults, and theyre allowed to spend their money however they want it, and if they lose their shirt, thats on thema response that does not suggest that the company is terribly concerned with some of the bigger-picture issues here. To date, a few state regulators have sent the company cease-and-desist letters, but with limited success. Federal district courts in Nevada and New Jersey have found that the CFTCs jurisdiction over exchanges like Kalshi is likely exclusive, which means states would not have the legal authority to regulate themor, critically, to tax them. Robinhood quickly filed lawsuits of its own in both states, arguing that Kalshis victories clear the way for Robinhood to offer sports contracts on its platform, too. Those leery of using events contracts as a backdoor form of sports betting have what might, on paper, sound like a pretty good argument: CFTC regulations bar exchanges like Kalshi from listing contracts related to gaming, which, at least in the colloquial sense of the word, would seem to cover point spreads and player props. And as ESPNs David Purdum and Shwetha Surendran reported earlier this year, in early 2024, Kalshis own lawyers argued that this gaming language bars the sports-related contracts that the company is now rolling out. Why? At the time, the company wanted to list contracts for election outcomes, and asserted that regulators intended gaming to refer to sports, and thus not to politics. A federal court eventually greenlit Kalshis offerings in time for the 2024 elections, and the company says it posted around $1 billion in trading volume on the results. With the election behind it, though, Kalshi has spent 2025 pushing further into sports, notwithstanding its lawyers earlier arguments. And under President Donald Trump, Kalshi has good reasons to be optimistic about its chances of clearing whatever regulatory hurdles might stand in its way. In January, the company announced that Trumps son, Donald, Jr., would serve as a strategic advisor, touting his ability to help push prediction markets into the mainstream. Trumps nominee to serve as the new CFTC chair, Brian Quintenz, is a Kalshi shareholder who sits on Kalshis board of directors. Quintenz plans to resign and sell his stock if confirmed; even so, if a recently departed board member takes over as the head of its primary regulator, Kalshi is probably going to feel pretty good about that relationship going forward. Already, Kalshi has scored a major legal victory since Trump took office: Shortly after that federal court allowed the company to list contracts related to the 2024 elections, the Biden administration appealed. But under new leadership, the CFTC voluntarily dropped its appeal in May, leaving users free to take long positions on whether JD Vance, Gavin Newsom, or someone else wins the White House in 2028. Kalshi has promised a slow rollout of its contracts on NFL props, and told InGame, a publication that covers the sports betting industry, that it has no immediate plans to offer college football props. But the success of its initial filings seems to have further emboldened the company: This week, Kalshi submitted additional paperwork to the CFTC to allow users to more or less construct parlayspopular sportsbook bets that require multiple events, or legs, to occur in order to pay out. One contracta market for predicting whether the Dallas Cowboys would beat the Philadelphia Eagles on Thursday, and the teams would combine to score at least 48 points, and Cowboys receiver CeeDee Lamb would score a touchdownwent live shortly before kickoff. (It did not hit.) To date, traditional sportsbooks have been publicly critical of exchanges like Kalshia position that makes sense, given that they have 70 billion reasons and counting to maintain their oligopoly on the market. But under an administration that has adopted a lax, industry-friendly stance to prediction markets regulation, sportsbooks are increasingly looking to get in on the action themselves: If they can persuade at least some customers to make basically the same wagers, but on a platform that isnt subject to state regulation or state taxes, they are going to get over their initial skepticism in a hurry. Sure enough, Underdog recently partnered with Crypto.com, which rolled out a sports event contract business in December. FanDuel has announced that it will offer event contracts with the CME Group, a derivatives marketplace; DraftKings says it is evaluating its prediction market-adjacent options, too. The growth of prediction market-based sports betting doesnt mean that traditional sports betting will disappear. But it does mean that the problems created by legal sports gamblingthe addiction epidemic, the embarrassing scandals, an increasingly captured sports media ecosystem that is seemingly incapable of covering games without incorporating an officially sponsored betting angleare going to get worse. The companies that take bets (by any name) care about making money. This is just one more way for them to do it.
Category:
E-Commerce
We live in a world where workers are doing more varied and complex tasks. And in most instances, theyre doing so at the expense of focus and performance, according to a global EY study. People are juggling priorities that shift by the hour and filling their days with decisions that drain more than they deliver. And after more than two decades working with leaders and teams on productivity and time management, Ive seen the same pattern play out again and again. That of smart, capable people caught in a cycle of saying yes to everything. As a result, they leave little space for what really matters. My client, Alex, was no exception to this. Most days were a familiar and exhausting routine. On a typical day, hed finally open his laptop around 10:15 a.m. By then, hed already had three conversations, reviewed an urgent email thread, made lunchbox sandwiches, resolved a childcare drop-off tantrum, and sat through half a leadership meeting with his camera off and a blank stare. His day had technically begun hours earlier, but it wasnt until then that he had a moment to look at his calendar and feel the weight of nine meetings, two deadlines, and yesterdays unfinished list pressing in. Breaking the cycle of yes If this sounds familiar to you, thats because most of us in the modern world have developed an unconscious reflex to keep saying yes to urgency, opportunity, and momentum. In doing so, weve trained ourselves to push forward without pause. We’ve also convinced ourselves that availability equals value and responsiveness equals worth. Our best thinking, most meaningful contributions, and clearest leadership rarely emerge from this state of constant forward motion. They emerge from space. And space is only possible when we learn to press pause, even briefly, and reclaim our right to decide when something deserves our time, attention, and energy. This echoes cognitive load research, which shows that the brain’s working memory can only process so much before it starts dropping or distorting information. Overcommitting is more of a capacity issue than a time issue. The power of a deliberate pause One of the most underused and undervalued tools in this regard is not a new app or a color-coded calendar system. Its a simple phrase: not now. Its not about avoidance or indecision. This phrase lets us be deliberate with how we navigate our days and our decisions. Not now allows us to acknowledge somethings importance without letting it run our schedule. It gives us permission to protect our current focus, preserve our mental bandwidth, and delay commitment until we have the capacity to give it our full attention. What makes this particularly powerful is that it doesnt rely on dramatic change. It asks only for awareness. In fact, small shifts in how we respond to requests and obligations can be the most transformative, precisely because theyre sustainable. Start by noticing where the automatic yes creeps in. That might be meetings you dont need to attend, projects that belong on someone elses desk, and tasks that are loud but not actually important. Begin questioning the pull to respond immediately by pausing before you commit. Let silence do some of the heavy lifting. This kind of deliberate delay can be uncomfortable at first. Were conditioned to equate speed with success. Slowing down can feel risky, even subversive. But what were really doing is replacing reflex with intention. And the impact can be profound. Leading with discernment By saying not now, we arent rejecting opportunity or disengaging from our responsibilities. Were creating room to assess whether those opportunities align with our values, goals, or priorities. Were choosing to invest our energy where it will have the most impact, not just where the noise is loudest. Over time, this practice becomes more than a productivity tactic. It becomes a leadership mindset. At some point, every effective leader needs to learn to stop reacting and start choosing. We all operate in dynamic environments. There will always be times when there is real urgency, and we need to respond. But even in those moments, the ability to discern between what demands our attention now and what can wait becomes a defining skill. Leaders who master this are often those who appear calm amid chaos. Not because they arent busy, but because theyve learned to carry less noise. They know how to separate the signal from the static. They are discerning with their time, and clear in their decisions. They’re also generous with their presence because theyve protected it from being scattered in too many directions at once. So when you next feel the tug of obligation, urgency, or expectation, try asking yourself one question: Does this need me now or am I simply in the habit of saying yes? Then, give yourself the grace to wait. Remember, its not forever. Its just for now.
Category:
E-Commerce
You know MillerKnoll as one of the few great American design brands. Or perhaps, a mega brand of design brands including Design Within Reach, Hay, and Muuto. But the furniture manufacturer is still shaking off a difficult few years. Its revenue dropped nearly half a billion dollars as COVID closed offices. And while margins are up since Herman Miller and Knoll joined forces in 2021, the company is still facing headwinds from global uncertainty around the economy, future of work, and tariffs. But when I spoke to CEO Andi Owen earlier this week, she was primed with energyand dare I say, real enthusiasm. Our conversation was pegged to the appointment of MillerKnolls new Board ChairJohn Hoke, the former chief innovation officer at Nike. But the frank, 45-minute discussion that followed touched upon every aspect of the MillerKnoll business and brand, including a spirited debate about RTO, why Herman Miller and DWR are central to her strategy to make up the $400 million in revenue lost thanks to COVID, and why she won’t try to sell you a new Eames Lounge to replace your old one. For anyone nervous about running a business in our current climate, Owens POV offers a masterclass in staying grounded. This conversation has been edited for length and clarity. So John Hoke recently left his role of Head of Innovation at Nikeone of the other few great American design brands. And hes just taken the role of Board Chair at MillerKnoll. It feels like you want to put the pedal to the metal on innovation. John’s been on the board for 25 years, almost, which is kind of hard to believe. He brings this incredible, enthusiastic, creative, sort of big thinking design vision to an environment which typically leans financial results oriented. When Mike Volkema [the former board chair] retiredwhich is very sad, he’s an amazing human being, but I think it’s the right time for him in his lifeJohn was just a natural choice for so many reasons. Because if I think about the journey we’ve been on in the last four or five years, MillerKnoll coming together as two companies and going through all the integration processwere at that stage where we can really lean in to sort of the fruits of our labor post integration, and really lean into all of our 15 brands and who they are and what they can do best. I’m really excited about his leadership at this time. I think what he’s done in the past helps us to think differently, helps us to look outside of our industry and what we’re doing and think more expansively. [Photo: courtesy MillerKnoll] Since the Knoll acquisition in 2021, its been what I assume is a massive amount of work around mass consolidation of brands. You closed two major production facilities. Youve joined offices. Obviously, there were layoffs. Do you feel like the merger is finally done? Yeah, I would say it felt like a gorilla off my back, and I think off all of our backs. So things that you just illustratedfinancially, the facilities, consolidationall of those things, those are hard but easier decisions. They’re sometimes very black and white. The harder things are understanding where you’re not going to encroach and what you’re not going to damage. So for us, as we went through this process, which took the better part of the last three and a half four years, it was really about, how do we keep each one of our brands, identity and creative juices intact? How do we keep the soul of each brand, while we find a way to build a culture that is all of us together? The good news is the heavy lift is behind us, which is why this time is so important because we feel like we can kind of lift up and look out we know who we are. Smooth sailing is the wrong word, but I think I would be remiss if I didnt mention, we’ve all been managing in a kind of perma-crisis mode for the last few years. [Photo: courtesy MillerKnoll] Perma-crisis seems like the perfect descriptor of our world today. I mean, it’s sort of been one thing after another thing after another thing. COVID was kind of the crisis that never stopped. That brought on a whole series of supply chain issues, and then you have changes in the administration and all these things. And I think at a certain point, as leaders in any business integration aside, you have to move past perma-crisis and just make your bets and manage a very uncertain environment. You have to steer clear and just be steady, because you can’t continue in crisis mode forever. It’s unhealthy, it’s difficult. What allowed you to get out from perma-crisis? Because you’re still dealing with a lot of these same problems you were a few years ago! Return-to-office not really happening. Supply chain uncertainty. Now tariffs. I think for me personally, and I think for the team, it was really more of a mindset shift. At first, there’s the surprise and shock and awe, and it’s one thing after another thing after another thing. And it’s very easy to get in your war room and start to plan everything you’re going to do, to react. And after a time, you realize you just can’t do that anymore. You’re exhausted. First of all, you lose sight of where you want to take the business, and you have to re-anchor on these are the bets we’re making. We can’t control the macroeconomic or the external environment. Things are going to happen. We just have to steer clear down the path that we feel is the right path, which is around product innovation, building culture, creating human centered environments, developing a really strong retail business, staying clear on our focus and our vision, and then we#8217;ll manage the day-to -day crisis as it comes. Its just too difficult to stay in reaction mode. You’re right, [the environment] hasn’t changed. But ultimately, that’s the only way I think you can really be healthy right now. I do want to get into some of the ongoing challenges of the business. Your profit margins are up post consolidations, but your revenue is still down about $400 million since COVID. How do you buck this trend in declining revenue? I think the downward trend in revenue can be attributed to a variety of things, right? You can say macroeconomic COVID. Ultimately, if you look at the industry in two buckets, there’s the commercial interior (office furniture) contract side of the business, and theres the retail side. The contract furniture side of the business was due for consolidation. Number one, it has never really consolidated in the history of the business. And secondarily, when COVID struck, people found a new way to work. So that drop in revenue, the bulk of that came immediately, when it was like, we’re all working from home and who needs to be in an office? I don’t think the industry has fully recovered, which I actually think is good news, because we’re starting to see that trend reverse. We’re starting to see the return to office debates become less of a debate. We’re starting to see people realize the value of human connection in a workspace and otherwise. So I think that trend is on an upward curve. And I also think the industry has consolidated in a very healthy way. So if you start with Miller and Knoll coming together, and then you look at the latest consolidation of Steelcase and HNIthat’s good for us, that’s good for the industry, that’s good for competition, that’s good for margins, it’s good for all the things. So I think we’ve right-sized to what demand should be in the future to how people are working today. The industry was due for a step-down. And then if you think about the residential side of the business, that’s where we see a huge amount of growth for us. Our business is very nascent. It’s smaller. We’re under-stored. We’re under-assorted. We have a huge advantage from a design perspectivean advantage in that we manufacture many of our own products. We have no real international footprint. So on the retail side of the business, opening 10 to 15 stores every year and continuing to build both of those brandsDWR and Herman Millerwe think is a top line and bottom line grower. And then if I take everything I just said about the contract side of the business, and I say that was mostly North America. If you look at the rest of the world from a commercial interior standpoint, we have a very small market share. It’s a very profitable business for us. So there’s a lot of opportunity for us to grow internationally. Jeff Stutz, our new COO [promoted from CFO], has a really critical understanding of the contract businesses, and as we grow the international contract businesshis financial expertise is going to be huge. So I think the worst has passed, and we’re in a growth mode now, which is really nice. [Photo: courtesy MillerKnoll] I think the return to office debate is still raging. You know, it was, though, not as much. I mean, every year, Im asked to moderate another panel on will we return to office? Isnt it old now? Aren’t you done with the conversation? [Photo: MillerKnoll] Oh, I’m so sick of it! Yet still, nobody exactly knows how its going to land. Offices have recovered a bit. The hybrid thing is here to say. I think a trend we do know now is that office footprints are shrinking. We have seen cutbacks in terms of overall square footage as companies re-invest in offices. And that doesn’t seem like it will be changing anytime soon. And so I wonder, do you accommodate that differently? Do you design differentlylike you did with the modular OE1 line? It doesn’t feel like a company of your size can just count on the office coming back to the substantial numbers people expect. I think what you’re saying, Mark, is absolutely right on. I don’t think anybody in this industry is banking on the days when there were rows and rows of cubicles and tons and tons of office space, because we don’t live that way anymore. When I think about whats cool about our company is that whether you’re downsizing, whether you’re moving, whether you have less people in the office, those are all opportunities to think differently about your space. And what’s interesting is that people are looking at smaller spaces nownot everyone, but many companies are looking at smaller spaces that are actually more enticing and more geared towards what they do. There are very few people that are sort of stamping out the same desk in the same chair for everybody. So that opportunity to really uniquely think about space, to innovate around products that might suit an engineer versus a marketer versus a CEO, those are things we do really well. We think about the entire space. That’s all business opportunity. Less space is not necessarily a bad thing. We’re not sitting here banking on the days of yore in the 80s, when it was Action Office everywhere. What we’re banking on is that people will understand that a premium space thats geared to your employeesa place where people actually want to come, whether they’re coming for two days or three dayslike, I don’t care. Whatever your tenets are around being together, people want that space t be compelling. I’m just so bored by the conversation. But [back to office] mandates don’t work. Like whatever, you can try to do a mandate if you want to, but what works is people wanting to see each other and wanting to work in a space thats compelling. [Photo: MillerKnoll] Its like psychological theory, right? Positive reinforcement works better than negative. Treat people like adults. Give them a space they want to come to, create a culture they want to be in, and the problem is solved. That’s not easy to do, but space plays into that, and that’s really good for us. When you talk about expanding your office contract business internationally, what does that involve? Does that really just involve stepping up the amount of people who are doing direct sales to these companies? Overseas manufacturing? We try, and mostly do, manufacture in the locations where we sell our products. So we manufacture in Asia for Asia. We manufacture in Europe for Europe. So it’s a matter of manufacturing facilities. It’s a matter of building up internal teams, and it’s also a matter of building up our external dealer partners. So what countries do we have enough dealers? What countries do we need to add dealers? You know, the Middle East right now is on fire. How do we support growth in those areas? Then additionally, what are the products we need that we have to develop for these countries? Because it’s not the same everywhere. You can probably take 80% of your product portfolio unchanged everywhere, but that other 20% you really do have to be uniquely developed for that country in some cases. It seems like tariffs have made a minimal impact on your business thus far. Will that change? Now, I would say tariff planning has had maximal impact! I mean, it’s a lot of money for everyone, but I think we’re in the place of sort of waiting to see how this all comes out. We have our worst case scenario and our best case scenario, and we’re sort of taking it a day at a time. I don’t think we have seen every tariff fully enacted going through the supply chain. There will be an impact, and we’ll try to be as efficient and effective as we can to offset costs, because the last thing we want to do is keep [increasing] prices to cover these costs. So right now, we’re in a wait-and-see mode. I will say it has been impactful, but we have not gotten to our worst case scenario yet. [Photo: courtesy MillerKnoll] You also talk about the domestic sector being this big area of growth for you. Does that include the home office sales that you had that incredible spike during COVID? Or is it really like me getting that Eames Lounger for my living room? I think that it’s both. When I came to the company, we said Herman Miller is one of those brands that’s able to live in five or six or seven different places with equal authority. So it can be in a doctor’s office, a healthcare institution, it can be in an office, it can be your home. It can be gaming. And it has relevance everywhere. With Herman Miller retail stores, we said what if we took that thing that we do really well, which is ergonomic task seating, and expanded that part of the brand and the lifestyle piece. It’s been an amazing retail concept for a variety of reasons. Part of it is we attract that small business owner that doesn’t really want to work with an office furniture dealer, but wants five, ten, twenty setups for a startup or whatever that might be. Plus for the residential buyer, we’re on a street that they can easily access. They can come and get fitted for a chair. DWR is more of our marketplace of modern design, and we have 38 stores now. We’re opening them so quickly. I lose count of how many we have. But if you compare that to other folks in the residential home furnishings business, it’s dramatically under where we [we should be]. We have a great digital storefront. But what we find is that people want to have both. In places where we have both the brick and mortar and the digital it’s a really magic formula. So again, it’s kind of both. We experienced a massive bump during COVID with home office because we had a path to market that many folks didn’t have in office furniture. We’re still growing it, because we have the opportunity to get market share in places where we’re not. And I think that opportunity will exist for the next five to seven years, because we just are so under-stored. [Photo: courtesy MillerKnoll] You bring up brick and mortar retail. I know that you’re aiming to double it over the coming years. Could you speak more specifically on why it is such an opportunity for you. Because while I know were both sick of talking about if the office is coming back, we could say the same thing about is physical retail coming back? Having been in retail for so much of my career, there have been limitless debates over the years. Stores are down! Stores are not dead! No one will ever shop online! Name the debate. I think what works really well for us is that the people that staff our stores tend to be architects and designers. So yu’re not necessarily just buying a piece of furniture. We can help you with a variety of things. So we can help you design your space if you want that. I think our secret sauce is the people that work in our stores. That’s number one. Secondarily, I think that what works well for us is that people do want to understand touch and feel. Our products tend to not be inexpensive products! They’re an investment for many people. I’ll give you a perfect example: When I joined the company, I was lucky enough to buy an Eames lounge and ottoman. My husband and I looked at it online forever, and I thought we were going to get the tall because my husband is taller than me. We went into a store. Sitting in both was what made the difference for us (and we didnt get the tall). Had we just done it online, we probably would have ended up with a very different decision. Unfortunately, I do have to bring up return-to-office one more time. Where we’re seeing investment in enterprise buildouts right now is actually in data centers. Every architecture firm we’re talking to is now designing data centers as their cash cow. How much is the data center an explorable market for you? You know, I would be lying if I said we weren’t thinking about how we play in this market, because it’s growing. I’m not sure yet how we can play in that. Theres probably a way, but not one I’m comfortable sharing at this point. Its interesting, though. Ive followed MillerKnolls efforts around incorporating recycled plastics, but I also just feel like what you do best is longevityif you just can convince people to stick with the products you built for a long time and for businesses not to throw them away. That’s what we hope. Where was I? I think I was in the La Jolla store, and a woman came in, and she brought the ottoman of her Eames Lounge that her father had. And she was an older woman, probably my age, and she’s like: I want it just like this, but I want a new one. And I was like, No, you don’t. I said, First of all, this is rosewood. You can’t get it anymore, and there was such a patina to the leathers. I said, Listen, keep this one. We can refurbish it. Well restuff it. We’ll do whatever you want, but hang on to this one. So anyway, I lost the sale, but on the other hand, that’s what we want. We want you to have something that’s an heirloom that you can keep for a very long time, that we can fix and repair. And if we can’t fix and repair it, let’s give it to another user, or recycle it. Something we really don’t want our products ending up in a landfill in any way, shape, or form. Old leather hits different. You bring up the Eames Lounge. So much of your brand storytelling is around archive pieces, archive releases, archive collaborations. How important is the archivethat sort of deeper mid century-plus archiveto your business versus the newer designs? Its hard to look at brands like Herman Miller and Knoll and not acknowledge that a big part of what we do is making sure that we honor that legacy, right? So I think if you look at everything from Eames Lounge and Ottoman to building our archives in West Michigan, to Hays latest collab with Emma Colemanlike we have both, right? And we just hired a new creative director for Herman Miller, Carlos Martinez. Because in my opinion, that’s amazing history. But we’re also at a point in time where we have to evolve into the future. So I think that’s one of the things that Carlos, who just joined us this week, will be really focused on. I think you make a good pointit’s hard when you have such an amazing history to make sure you’re moving quickly and effectively into the future. And I think with Knoll we’ve done a really nice job of that in the last three or four years. We’ve definitely done that with some of our newer brands, whether that’s Mutto, Hay, NaughtOne, CBS. With Herman Miller, we’re going to turn the corner. That’s interesting, because aesthetically, I don’t know how I would define Herman Miller today. Im a little historical storied out, and I feel like, well, what’s the future? Because I’m seeing the future everywhere else, and it’s depressing. We have to be the ones to make the future not depressing, right? And I think you’re right. I think the vision for Herman Miller is something we are in the process of evolving and unleashing. With all the things that are going on in the world, we have such an opportunity to be a force for good. Part of our goal [is]…how we do bring that human connection even in the darkest of times? [Photo: MillerKnoll]] An insider told me a while back that that your initial push into gamingthe Embody gaming chairwas actually a big disappointment: it had flopped and the sales had done poorly. No, actually, just just the opposite! I think our initial gaming chair was a huge success. Actually, it continues to be a huge success. So much so that we’ve invested pretty dramatically in this business…all the way to working with Esports teams and launching our second gaming chair. I would say our second gaming chair, which was really our attempt to do a lower cost chair, has been successful, but didn’t have all the bells and whistles that we really wanted for the either professional gamer as well as just the casual gamer. So we have two [new gaming chairs] in the works right now, and they take a long time to put together. But no, we believe in the business. We have not been disappointed by the business at all. I think if we’re disappointed in anything, it’s about the speedthe speed with which you can develop something like this, which, it takes time. Looking five years ahead as a customer or someone studying the company, what’s going to surprise me most? Oh, gosh, I think you’re going to be surprised most by how the brands have evolved and how much Herman Miller and DWR have grown. I think you’re going to be surprised by bottom line growth, too. Integration and all of that costs so much money and so much investmnt, and I think the years that we have ahead will be super profitable. You’re going to be surprised by how much noise we’re going to make and how many things we’re going to change in the world. I really do. I’m excited about it. I think our sustainability efforts will make a huge difference. And I think some of the people that we’ve brought on board have such unique and innovative perspectives that we’re thrilled where well be in five years.
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E-Commerce
Most types of financial fraud are relatively straightforward: the fraudster uses creative accounting, inflated numbers, or out-and-out lies to trick their victim into handing over money or valuables they wouldnt otherwise part with, usually while twirling a villainous mustache. You can probably think of a dozen examples off the top of your head, from Bernie Madoffs Ponzi scheme to the phone scams that try to convince your Nana her Social Security benefits are in danger. But until allegations were recently brought against Federal Reserve governor Lisa Cook, most people had never heard of mortgage fraudand for good reason. This type of fraud is exceedingly rare. In 2021, only 58 mortgage fraud offenders were sentenced in the federal system, and the number of offenders has decreased by nearly 70% since 2017. Understanding what makes mortgage fraud such an uncommon financial crime can help clarify whats behind the recent allegationsand can make your own brushes with mortgage underwriting feel less opaque. Heres what you need to know. Defining mortgage fraud The specific type of mortgage fraud that Federal Reserve governor Cook (as well as New York Attorney General Letitia James and California Senator Adam Schiff) have been accused of is intentionally deceiving a mortgage lender or underwriter in order to secure a mortgage loan. There are several types of mortgage fraud that a borrower may engage in, including: Income fraud: When a buyer misrepresents their income to the mortgage lender. Straw buyer: When a fake buyer acts on behalf of a true borrower to misrepresent the transaction because the real borrower couldnt qualify for the loan. Typically, the straw buyer transfers the title to the property after the sale is done. Illegal property flip: When a buyer purchases a property at below market value and quickly resells it at an artificially inflated price. Although flipping a house for a nice profit is not illegal, if it involves a fraudulent appraisal or misleading the new buyer, it is considered mortgage fraud. Occupancy fraud: When the borrower lies about the occupancy status of the property to obtain a better rate, since owner-occupied primary residences receive more favorable terms than second homes or rental properties. Occupancy fraud is the type of fraud that Cook, James, and Schiff have been accused of, since the allegations against all three center on which of their properties are designated as primary residences. (Its important to note that Schiff claims he got permission from his lender to consider two homes as primary residences because of his need for a home base in both California and the D.C. area.) The high bar for mortgage underwriting Mortgage fraud is not so easy to pull off, as anyone who has been through mortgage underwriting can attest. This process puts the borrowers credit, income, and financial background under the microscope to determine if they are a good candidate for the loan. Specifically, mortgage underwriting looks at things like: employment records for the previous two years W-2 tax records for the past two years pay stubs for the past 30 to 60 days account information for every type of account you have, includingchecking and savings accountsCDsinvestment accountsretirement accounts that money market account you opened three years ago and forgot about additional income, like alimony, child support, bonuses a gift letter if friends or family have given you money to help with your down payment Underwriters have the tenacity of a bloodhound and will halt the process to ask for additional information about unexplained gaps in employment or funds that they consider unverified. (The card that Nana sent the $500 birthday check in may not be enough to satisfy your underwriter about the source of that unverified extra five Benjamins. Ask me how I know.) Depending on the lender, underwriting may also require the borrower to provide an intent to occupy letter as part of the process. This legal document offers proof that the borrower is purchasing the property as a primary residence, and works as a legal protection against occupancy fraud. Why is mortgage fraud different from all other fraud? With the exception of illegal property flipping, the most common types of mortgage fraud involve a borrower deceiving a mortgage lenderin order to borrow hundreds of thousands of dollars. This is not like tricking someone into giving you money and disappearing with it. The mortgage lender literally knows where the borrower lives. Additionally, if the borrower succeeds in deceiving the lender into a more favorable loan through mortgage fraud, the bank risks losing money if the borrower defaults, but the borrower faces higher risks. If they default, they will ruin their own credit. The lender can easily write off the loss of the money, especially since it still has the property as collateral, while the borrower will be in much worse financial straits after defaulting. This is not to say that mortgage fraud is some kind of victimless crime that can only hurt the borrower. But a type of fraud where you plan to make monthly payments to your victim is a noticeably different beast from simply illegally transferring money from victim to fraudster. Fraud or error? Fed Governor Cook has responded to the allegations that she fraudulently took out mortgages on two primary residencesone in Michigan and another in Georgiaby claiming she made no attempt to deceive anyone and that an unintentional error may be behind the problem. It is impossible to know for certain what happened in this situation. Mistakes certainly happen in mortgage paperwork. There is no specific definition of primary residence, which can vary from one state or county to another, and from one lender to another. And while mortgage records are public, they do not necessarily include all the information shared between borrowers and lenders. There is no way to prove or disprove fraudulent intent on Cooks part. Along with the fact that mortgage underwriting is very effective, the difficulty of proving mortgage fraud is why there are so few convictions. Yes, its possible that many borrowers are fibbing about their income or where they plan to live. (Donald Trump was famously found liable for fraud by a New York state judge for inflating his net worth in order to secure more favorabe loan and insurance terms.) Or they may have an agreement in place with their lenders. Or there may be a clerical error on their mortgage records. If they are making their mortgage payments on time, no one is paying much attention. Borrowing with an intent to defraud Mortgage fraud is a real financial crime where a home buyer deceives a lender in order to get more favorable loan terms. But its a difficult fraud to pull off because the mortgage underwriting process requires such attention to the borrowers financial situationalthough falsely claiming that a property will be a primary residence is probably one of the easiest types of mortgage fraud. While mortgage fraud is not a victimless crime we can simply accept from governors of the Federal Reservewho need to be above reproachits also unlike most other types of fraud. The fraudster is committing to years of monthly payments and faces financial ruin if they default. Lenders are in an excellent position to protect themselves from mortgage fraud through underwriting. The system appears to be working as intended, considering how difficult it is to identify or prove definitive cases of fraud. Which raises the questiondo we really need to examine the intent behind the borrowing irregularities that are currently in the news cycle?
Category:
E-Commerce
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