Issue #00016: February 26th, 2026

Hello readers, 

The Supreme Court just ruled Trump’s IEEPA tariffs unconstitutional in a 6–3 decision. This was a shock result, but keep the champagne on ice for now. The administration has other tools, and new tariffs are already being drawn up. Section 232 duties of 25% on furniture remain intact, rising to 50% in 2027. For the interior design business, the chaos continues.

Here’s the view from where I sit. We’ve lawyered up and we’re filing a lawsuit to recover what we’ve paid over the last year plus. For a small textiles business, we’ve spent a fortune in additional tariff costs that were, in the words of the court, “unconstitutional.” Our rates tripled—from an average of 5% to 16%. We implemented a tariff surcharge, and surprisingly, the response from customers has been zero pushback. Every business owner I know in this industry has passed the majority of these costs on to their clients. And none of us are happy about it. 

I’m actually all for the spirit behind bringing manufacturing back to America. We used to have a brilliant textile and furniture industry in this country. Policy changes in the early '80s gutted towns from Fall River, Massachusetts, to High Point, North Carolina. The factory closures decimated entire communities. 

I know this firsthand: my family runs a factory in an ancient city and hires skilled local workers. Keeping it open isn’t always the best move for our bottom line, but we stay because we believe our business is more than numbers on a spreadsheet. I recently met Jacob Long, an entrepreneur who bought a shuttering textile mill from Loro Piana in Connecticut. His mission is to make artisanal manufacturing cool again: You know, carpentry, cutting, sewing, the kind of deep, purpose-filled work that built the USA. The spirit behind tariff reform is dear to my heart. The execution is another story.

Managing against uncertainty is what business owners get paid to do. This week, I’ll be on the phone with colleagues across the supply chain, polling my sales team, and modeling out scenarios across the tariff spectrum. Now, the craziness is a known quantity. We know the maximums and the minimums. There’s no excuse not to be managing our businesses, our customers’ expectations, and our supply chains accordingly. So we file our papers, plan for the worst, and keep building. None of this dampens my optimism about the year ahead. 

Finally, the read of the week. The Culture Explorer published a piece that articulates something I believe deeply: beauty is essential to how we live, think, and build. Worth your time.

See you next week.

You can’t buy taste
House Beautiful assembled three experts to debate whether taste is taught or innate. Emmanuel Platt of MoMA says you can learn it through exposure. Omar Nobil of Design Within Reach says you can only let people form their own filter. Jeremiah Brent calls it curiosity and audacity. After 30 years selling handmade textiles to the best designers in the world, I’ll add the ingredient they’re missing: exposure with intention. I wasn’t born with taste. I don’t dress particularly well. Don’t ask me to pick complementary colors. But after decades immersed in this world—surrounded by people with extraordinary eyes—taste has seeped into me by osmosis. My wife has an art history degree. My brother has some of the sharpest aesthetic instincts in the industry. That kind of proximity, sustained over years, changes what you see and how you see it. (I can spot a quality textile on a sofa from 100 feet). 

The designers who develop the sharpest eye aren’t the most naturally gifted—they’re the most relentlessly curious. They want to know the origin of the weave, the history behind the pattern, the reason a certain hand-finish exists. Stop sending your junior team to Pinterest. Start sending them to mills, archives, and showrooms. Taste lives in your hands and your eyes. Drink it in.

Show house season is upon us
The Kips Bay Decorator Show House in Palm Beach just opened with two homes this year. Double the design inspiration. Designers love these projects because there’s no client to manage, just pure creative freedom across wildly decorated rooms. This is where serious buyers are paying attention. More show houses will follow throughout the year. We’ll cover them as the season unfolds.

Arhaus just showed its hand
The company posted $1.38 billion in revenue for 2025, up 8.5%, with comparable sales climbing 3.6% after a brutal 2023. I spent this morning reading their Q4 earnings report while waiting for my kid’s bus. The data says that clients using Arhaus’s in-house design services generate average order values four times higher than clients who don’t. That single data point should be pinned to every designer’s wall. Arhaus is also bringing its supply chain in-house, transitioning its Dallas distribution center to internal management and manufacturing 70% of upholstery domestically from its North Carolina facility. On the macro side, the company flagged the kind of things you read about in Mr. Thread: tariff uncertainty, skilled labor shortages, and a wealthy customer base whose spending tracks stock market volatility. They called the $100 billion US premium furnishings market “highly fragmented.” By the way, that’s corporate-speak for “ripe for consolidation.”

The Supreme Court rules—but the chaos continues
Despite the Supreme Court’s surprising ruling about Trump’s tariffs being unconstitutional, Section 232 tariffs of 25% on furniture remain intact. The de minimis loophole stays shut—a sneaky, painful ruling for wallpaper and fabric companies shipping smaller orders from warehouses abroad. Roughly 80% of our orders fall under de minimis thresholds. Business of Home’s Fred Nicolaus raised a sharp point this week: if companies that passed tariff costs on to customers now get refunds, do those customers have a claim? Legally, no—the importer paid the invoice, the refund belongs to us. But the question of whether it’s good business to keep those refunds is one worth thinking about.

Nobody is moving, just renovating
Lowe’s just confirmed what Home Depot reported last week: Americans are staying put. Lowe’s Q4 sales hit $20.6 billion—up more than 10% year over year—but CEO Marvin Ellison says the company is “still dealing with a housing market that does not have a lot of tailwind.” Comparable sales grew just 1.3%. The “lock-in effect” of low pandemic-era mortgage rates is keeping homeowners in place and forcing a renovate-in-place culture. The average American home is now 44 years old. That’s a lot of deferred upgrades. 

Mortgage rates hit a four-year low
The 30-year fixed mortgage dropped to 5.95% as of Feb. 25—down from 6.85% a year ago. It’s nice to see a number in the fives, to be completely honest. Trump directed Fannie Mae and Freddie Mac to buy $200 billion in mortgage-backed securities, which helped push rates lower. Refinance applications have more than doubled over the past year. But purchase activity remains sluggish—just 8% higher year over year. Fannie Mae expects rates to hover around 6% through 2027. A thaw, not a flood.

Consumer confidence edges up
Here’s some good news. After a brutal January, consumer confidence ticked higher in February. Expectations for additional Fed cuts are helping, but inflationary pressures and tariff uncertainty keep the mood cautious. Consumers aren’t panicking, but they’re not spending with reckless abandon either.

AI-generated focus groups are here
Fashion brands are using synthetic consumer research—AI-modeled audiences that simulate how millions of users would react to a product, campaign, or website before launch. Business of Fashion reports brands are testing their sites against AI-generated user data that behaves like real consumer feedback. 

The applications for our industry are staggering. Imagine modeling 5,000 designers reviewing your fabric collection before you even launch it—testing reactions, preferences, and purchasing patterns without waiting two years for real-world data. The risk: design by algorithm. Chase patterns in data and you lose the art. But used alongside human judgment as a validation tool, synthetic research could change how brands develop products. I’m tracking it closely.

Using AI is becoming a dirty word
Also in Business of Fashion this week, a report finds that fashion brands are quietly using AI across their operations but actively avoiding talking about it. 

This makes sense to me because people unconsciously associate AI with laziness. Psychologist Justin Kruger and his colleagues proved it in a 2004 study published in the Journal of Experimental Social Psychology. Show someone identical work and tell them one version took 26 hours and the other took four, and they’ll rate the high-effort version as better in quality, value, and liking every time. The human mind equates time and effort with quality. 

This is why Mr. Thread is and will always be human-made. For luxury brands built on craftsmanship and heritage, admitting to AI use is a serious brand risk. The irony is that the smartest businesses are using it everywhere behind the scenes—they’re just wise enough not to admit it.

Great creative businesses need to step up, then step back
A new documentary on Franca Sozzani (Paving the Way—Franca’s Legacy) just premiered at the Fondazione Sozzani in Milan during Fashion Week. Sozzani ran Vogue Italia for 28 years. She gave her photographers complete creative freedom: choose your models, pick your subjects, take the shot you want. They stayed for decades and worked for less than competitors paid. Her best-selling issue came from that trust, not a boardroom.

Every designer knows the tension: You hire talented workrooms, installers, artisans—then hover around like a helicopter parent because your name is on it. Sozzani’s legacy is proof that stepping back produces better work than leaning in. But I have found that stepping back only works if you step up first. She spotted raw talent early, invested in developing it, and only then let go. If you’re a leader, find people whose instincts you trust, train them until their standards match yours, then get out of the way and let them cook.

This connects to something I’ve always admired about the Giancarlo Giammetti and Valentino partnership—every great artist needs someone to protect them, empower them, and create the conditions for their best work. Sozzani did that for an entire generation of photographers.

Dining rooms are back
This one will make Dennis Scully happy. Anyone who follows his excellent Business of Home podcast knows that Dennis has been dining room-maxxing for years, as the kids might say. Elle Decor calls the return of the formal dining room the biggest trend of 2026. After years of being sidelined by open-concept layouts, the dining room is one of the most energized spaces in the home. Homeowners want fully realized, design-forward rooms—not weird spaces wedged between the kitchen and the living room. Round tables are making a comeback. Bold jewel-tone palettes are replacing stark minimalism. The data finally agrees with Dennis: Even if you only use it twice a year, a great dining room earns its place. My wife would never, ever think of getting rid of ours. It’s her favorite room in the house.

The $400 million ballroom nobody asked for
The White House East Wing—home to every first lady’s office since Eleanor Roosevelt—is gone, demolished to make way for President Trump’s gilded ballroom. The project has doubled in cost and ambition since it was announced: from $200 million to $400 million, from 900 seats to 1,350. Original lead architect James McCrery stepped down in December after clashing with Trump over scale. The Commission of Fine Arts approved it unanimously despite 99% of public comments opposing it (guess what? All seven commissioners are Trump appointees). A federal judge is weighing whether it’s even legal without congressional approval. The interior will echo Trump’s Mar-a-Lago Grand Ballroom: coffered ceilings, crystal chandeliers, and plenty of gold leaf. For an industry built on preservation and craft, razing a 120-year-old wing to replicate Versailles-by-way-of-Palm-Beach is a tough watch. 

But the government can do good too
Transportation Secretary Sean Duffy created the Beautifying Transportation Infrastructure Council to advise on making highways, bridges, and transit hubs more attractive. The council held its inaugural meeting February 2 and is already planning a national design competition and a guidebook titled Beauty and Transportation. When public spaces are beautiful, people are less stressed; they take care of things; there’s less crime. I’m completely behind this. The administration has been consistent on this front—from Chief Design Officer of the United States Joe Gebbia heading up design efforts to returning federal architecture to neoclassical style. The execution will matter, though. The idea that infrastructure should uplift the human spirit is one this newsletter will always support.

Last Week’s Common Thread: VELVET
Congratulations to everyone who spotted the luxurious connection! VELVET was the word that tied it all together—a reminder that in design, texture is often the silent protagonist.

Let’s see who has the “eye” to untangle this week’s common thread. Good luck, Threaders!

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 22nd and announce them in the April 23rd issue. Our lucky winner gets:

The race is on, Threaders. Let’s see those answers.

Stay sharp,
Mr. Needle

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