An ugly week for a beautiful industry

Issue #00023: April 16th, 2026

Hello readers,

There’s an exhibition at Bozar in Brussels right now that really caught my attention. It’s called Bellezza e Bruttezza (Beauty and Ugliness in the Renaissance) and its thesis is that you cannot have one without the other. The masters knew it five hundred years ago. Titian painted gorgeous goddesses alongside toothless drunks and leering tax collectors, because beauty only means something when ugliness is standing right next to it. This resonated with me because the economic news this week is ugly. Hideously ugly.

Hermès shares plunged 14%. Gucci revenue slid 8%. LVMH has stalled. Furniture stores are shuttering by the hundreds: Conn’s, the Texas-based owner of Conn’s HomePlus and Badcock Home Furniture & More, shut all 550 of its locations (who knew Badcock had so many stores?). American Freight liquidated all 328 of its stores. Even Circle Furniture closed nine shops that had been selling couches since Truman was president. 

I stumbled on a graph showing the National Association of Home Builders’ Housing Market Index going back to 1985, and it matches the performance of the interior design industry with uncanny precision. Every boom, every bust, every COVID spike and crash. Right now, the arrow is pointing down. Wars, tariffs, AI doom, housing crisis, mortgage rates. There’s a relentless stream of headwinds blowing at our industry (just ask RH’s Gary Friedman), and it’s scary out there.

But here’s the beauty standing right next to the ugliness: Poliform—the family-owned Italian furniture maker—just posted €350 million in sales, grew 5% last year, and operates 120 flagships worldwide. Their new CEO, Marco Spinelli, just 42, told WWD that “our 2026 started incredibly well with great expectations.” They are renovating their New York store—opening in September—expanding into Rome, Madrid, Riyadh, and Abu Dhabi, and just took over Trussardi’s iconic Piazza della Scala in Milan for a three-story retail space with a café. They are just one of many independent luxury brands that are thriving because they offer an exceptional product, made with humanity and soul. Meanwhile, Kering launched an entire university dedicated to luxury craft, and the shoe company Golden Goose is turning its stores into artisan workshops. There are beautiful opportunities everywhere if you know where to look (hint: we see tons of opportunities in the human-made space).

The editor-in-chief of Furniture Today, Bill McLoughlin, just told the industry to stop waiting for a return to normal, because this is the ‘new normal.’ I think he’s right. And if the Renaissance taught us anything, it’s that the ugly times are exactly when the most beautiful things get made. That’s why Mr. Thread exists. Tax day is behind us, the birds are singing for spring, so let’s get into it.

Keep reading to find out why performance fabrics are now in the hot seat, why trouble is brewing in the prosperous NYC luxury real estate market, and how 20,000 micro-lights created Hong Kong’s trippiest bar.

See you next week.

Mr. Thread

P.S.  Don’t just read—play. We’ve woven a new mystery into this issue in our PLAYTIME segment. Three correct guesses last week. Congratulations to Dianne M., Chad S., and Parker W.! Let’s see who has the “eye” to claim the win this time and secure a spot for our grand prize draw. Scroll to the bottom to join the fun.

Pied-à-TERROR in NYC
New York Governor Kathy Hochul is proposing a new tax on city second homes worth $5 million or more, aligning with Mayor Zohran Mamdani’s push to shake down the ultra-wealthy. Mamdani pointed directly to Ken Griffin’s $238 million Central Park South penthouse as exhibit A. The mayor’s office projects $500 million in annual revenue from this new tax. 

The Real Estate Board of New York is furious: President Jim Whelan says the tax “will eliminate thousands of construction jobs, lower property values, and raise costs for New Yorkers.” Serhant’s Ravi Kantha is blunter, calling it: “Death by a thousand cuts.”

But here’s the bit I can’t understand. Manhattan commercial property sales just hit a five-year high in Q1—92 transactions totaling $3.7 billion, a 37% increase year-over-year. Multifamily alone exploded 141%. So while Albany squeezes the golden goose, the golden goose keeps laying. New York is the largest interior design market in America (most likely in the world), and this new wave of tax policy aimed at the wealthy is a story we are tracking closely. How it plays out will ripple through every showroom in the country.

The heat is on Lululemon
Texas Attorney General Ken Paxton just launched an investigation into Lululemon over PFAS (aka “Forever Chemicals”) in their athletic wear. The concentration is reportedly highest at the crotch (yikes). We’ve been tracking this story for weeks, and the Overton Window is now wide open. If a state attorney general is going after the biggest name in activewear, the reckoning is real and heading straight for us next. I’m looking at you, outdoor textile and carpet manufacturers. 

It’s not just about non-toxicity, it’s also about having a more beautiful product: There’s something about synthetic fibers that makes it hard to capture the colors of nature. If fashion is about to face a major backlash against synthetics, the home industry is right behind it. The first company to crack all-natural beautiful performance owns the future.

Meanwhile, there has been some progress in the science world: Researchers at Flinders University in Australia have developed nanosized molecular cages capable of removing up to 98% of PFAS from water—a breakthrough that could reshape how the textile industry deals with chemical contamination. Watch this space.

The nightmare continues for furniture stores
As I mentioned earlier, furniture stores are closing at a terrifying pace. Conn’s shut all 550 of its Badcock stores across 15 states in 2024. American Freight liquidated all 328 of its locations. Circle Furniture—selling to Bostonians since 1952—closed nine stores after sales plummeted 20%. Weir’s Furniture in Dallas, open since the Cold War, shuttered four locations. American Signature’s 89 Value City Furniture locations are boarded up. 

Annual sales for furniture stores are down about 8% since 2022, with January at its lowest since the pandemic. The New York Times connects the dots: mortgage rates have climbed since the war with Iran began in February, housing turnover is at near-record lows, and when people stop moving, they stop buying furniture.

Throw tariffs on top and these companies are getting squeezed from both sides—pressure on revenue and pressure on costs. Ashley Furniture, the largest manufacturer in the US, is shutting a Texas plant and cutting more than 250 jobs. 

The renovation market is booming, yet the furniture market is barely surviving. It’s hard to fully reconcile those two data sets. But the editor-in-chief of Furniture Today said it best: after eight years of tariffs, pandemics, and wars, this is what normal looks like. Get used to it or get out.

The titans of luxury are shrinking
Hermès, Gucci, LVMH—the titans of luxury—all reported earnings this week. Cue the sad trombone. Hermès shares plunged as much as 14% after Q1 sales rose just 5.6% versus the 7.44% analysts expected. UBS called it “a relatively weak start to the year.” Gucci revenue slid 8%—nearly double the 4.3% decline Wall Street predicted. LVMH group sales rose just 1% to €19.1 billion, with the critical fashion and leather goods unit falling 2%. When the three biggest names in luxury stumble together, our industry pays attention because their customers are our customers.

The cause is twofold. Consumer confidence among the ultra-wealthy is shaky—the Middle East war, surging gas prices, and tariffs again. But I’ve said it before: there’s also a self-inflicted wound here—overexposure. Too many influencer ambassadors, too much social media, too much chasing scale at the cost of scarcity. 

UBS analyst Zuzanna Pusz put it plainly: “People are concerned that the sector is not growing, that LVMH is big and not growing.” Bernstein’s Luca Solca agreed this is “likely not enough to convince investors to step off the fence.” 

I’m hopeful a realignment is already underway, moving toward smaller artisanal brands, quiet luxury, and handmade goods. More on that below.

America’s builders have stopped believing
The National Association of Home Builders’ Housing Market Index is basically a monthly mood ring for America's homebuilders. Every month, the NAHB calls up about 900 builders and asks them three simple questions: How are your sales right now? How do you think sales will be six months from now? And how many people are actually walking through your model homes?

This month the sentiment index dropped to 34—its lowest in eight months. NAHB Chairman Bill Owens: “The year started with hopes for housing momentum growth, but risks with respect to the Iran war, energy costs, and declines for consumer confidence have slowed the market.” NAHB Chief Economist Robert Dietz reported that 62% of builders said suppliers have raised material costs due to higher fuel prices. Existing home sales fell 3.6% in March, and NAR’s Lawrence Yun slashed his 2026 forecast from a projected 14% increase to just 4%. 

Meanwhile, inflation soared to 3.3% in March; gasoline is up 18.9%; fuel oil up 44.2%. Real weekly earnings fell 0.9%. The spring selling season is off to the slowest start in years, and it’s easy to see why.

The handmade revolution
The signals are everywhere. Kering just launched the Accademia per le Eccellenze—a full learning ecosystem with capacity for 1,000 to 2,000 students per year, starting Sept. 2026. Golden Goose CEO Silvio Campara is turning his 232 stores into arts-and-crafts workshops, offering 90-minute sessions in clay, textile printing, papier-mâché, and woodwork, guided by local artisans. Artemest launched Champions of Craft and partnered with Gachot Studios on a 36-piece collection of all-handcrafted furniture. And the Times just profiled San Patrignano, the Italian rehab where recovering addicts create handmade wallpapers for Chanel, Loro Piana, and every Rocco Forte hotel.

While the luxury giants stumble from overexposure, a quiet renaissance is forming around the handmade. Kering CEO Luca de Meo says the brand’s Accademia is about “preparing for the future” of luxury. Golden Goose’s Campara—whose company just posted €734 million in revenue, up 15%—says people “want to rediscover the pleasure of doing things together.” Artemest’s Ippolita Rostagno says when artisans collaborate with international designers, “they’re absorbing a new way of thinking.” And Paolo Moschino, who has worked with the San Patrignano rehab since 2018, says “the craftsmanship was extraordinary. We’d never been anywhere like it.” The handmade wallpapers run about $175 a meter—and every penny goes back to the community. 

I think we’re seeing a realignment of what luxury means, and that meaning thankfully appears to be human.

Beware the AI trap
Business of Fashion reports that AI-generated marketing is a minefield for luxury brands. Gucci’s Primavera campaign was attacked for using hyper-polished AI images that felt generic. Prada pissed off customers with uncanny AI-generated birds. But Moncler pulled it off—explicitly telling audiences they used AI to create “impossible” scenes that could not be staged by human hands. 

I think the difference comes down to honesty. Interactive Advertising Bureau (IAB) data reveals a brutal disconnect: 82% of ad executives believe Gen Z feels positive about AI ads, but only 45% of Gen Z actually does.

The takeaway is simple: use AI honestly or not at all. If you’re a century-old brand selling handmade textiles, the last thing your customer wants is to feel like a machine made the pitch. But Moncler can pull it off because its whole shtick is high-tech, futuristic fabrics. You need to make the call for your own brand.

Congratulations to Dianne M., Chad S., and Parker W. for guessing last week’s common thread: TEE!

This is it, Threaders—the absolute final game before our grand prize drawing! Let’s see if you can crack this week’s common thread to rack up one last point for the raffle. It’s playtime—good luck!

The Stakes: Every correct guess earns you an extra raffle entry, so play every week to boost your odds! We’ll draw the winner on April 22 and announce them in the April 23 issue. Our lucky winner gets:

Good luck, Threaders!

Stay sharp,
Mr. Needle

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