How My Interior Design Business Lost $30,000 The First Year

freaking-out-over-your-paint-colors

This post started out to be about other interior design mistakes. As I was writing it, I was falling asleep… So, I figured if I was, you would be too.

I realized what you probably want to know is the down and dirty…

The living nightmares.

In the last 19 years, it was three really big things.

Oh, it’s not that I haven’t had other unpleasant things happen. It’s the usual; damaged furniture, a vendor who wasn’t up to snuff, or took waaaaay too long to produce a piece of furniture, a delivery company run amok. Those sorts of things, while unpleasant, got resolved fairly quickly and life went on.

These three biggies are the ones that took me months or even years to recover from both financially and spiritually.

There ARE yucky people in the world. We all know that. Oh, we want to believe that most people are decent and kind, but the reality is, not everyone is. And I’m not talking about just having a random bad day, but a bad life kind of yucky.

Today’s post is about the first soul-sucking experience where my interior design business lost $30,000, the first year

how my interior design business lost 30k the first year

It was 1996 and 5 months into my first year of my brand new interior design business.

I was out shopping one day and ran into an acquaintance, N. She had bought a few things in the decorating store I had worked in before I started my new business. I knew about the fire that had gutted their lovely home in Katonah. Thank God, no one was hurt but the home was totaled and was about to be rebuilt.

She told me that she didn’t want to hire my previous boss because she wanted a different look; somewhat more contemporary and stylish, but still classic.

I got the job.

N was/is the perfect client. Nice, nice, nice, with a handsome budget, great taste and as easy-going as they come.

The home had a glamorous vibe to it. Besotted with Barbara Barry’s home in Los Angeles circa 1996, I used the general feel and palette as my inspiration. N loved it!

Dang it all! I saved that magazine for years and cannot find it. Maybe it got tossed before I moved? However, since I don’t have it and the only photo I found online is literally the size of a stamp, I found a somewhat similar Barbara Barry room to give you the idea of the styling and colors.

barbara-barry-pale-living-room

The furniture and fabrics we chose came from Baker Furniture, HBF, Donghia and Edward Ferrell. I designed and had built, a gorgeous mahogany dining table. The design was inspired by Barbara Barry’s vintage mahogany dining table that had been on the cover of House Beautiful

It was a good-sized home and required a lot of carpeting. My previous employer had used a gentleman in Manhattan, a Mr. Swindler as a source for fine carpeting. She had always spoken highly of him and so I thought that would be a good place to go for this job. He carried a lot of the same styles as Stark Carpets, but the prices were lower and the place wasn’t a zoo.

Formerly, Swindler was the head of the rug department at Schumacher. Since there was no longer any rug department, I assumed that was when he started his business. As a matter of fact, his compact showroom was housed just above where Schumacher had its showroom back in the mid-90’s. That was at 57th and Lex.

I made an appointment and N and I were ushered in by a kindly, elderly woman who sat at the front desk.

It was just her and Mr. Swindler who presented with a soft-spoken gentlemanly demeanor. He appeared to be in his late 60’s. It was a pleasure to visit the showroom as Mr. Swindler was extremely knowledgeable but also knew when to step away. It was all very low-key and we made our initial selections within an hour.

Crucial Trading Wool n Country Limestone-500x500

One of the carpets was this beautiful wool and sisal blend by Crucial Trading. It was the exact same rug that Barbara Barry had in her Hollywood Home! We would have this fabricated into 3 area rugs bound in heavy linen. There were 3 other high-end broadlooms, all monochromatic pale taupe colors for every room in the house. It was a sizable order and we were quite pleased.

One day, I was in the city shopping for clients and stopped in to give Swindler a check for another carpet we were ordering. He was sitting at his desk. I thought nothing of it at the time, but he was engrossed in about a couple dozen or so invoices spread over his desk like a piece of wallpaper. I guess I just figured that he was organizing things.

Weeks went by and I called Swindler to check on our order but there was no answer.

So, figuring the carpeting would be coming in soon, I sent in the final payment. I wanted everything to be perfect for N and her lovely family. They were moving back, in less than two months, so needed to get cracking with the carpeting order!

After a few days, I called to see if Swindler had received the check and still no answer, just the machine. I thought it was odd, but went about my business. Later that day, I tried again and still no response. The next day, I tried again and still no answer.

It was then, that it dawned on me that something was just not right, but I figured that someone was ill or something like that.

At the time, my husband was working a few blocks away, so I had him go over to investigate.

He called me from a pay phone.

“Laurel, there’s a marshal’s notice on the door and a huge dead bolt. The place has been shut down!”

I don’t remember many details of what happened next. Nauseated beyond belief and more scared than angry at that point; that crook had 30,000 dollars of my client’s money! Money that was supposed to go for expensive carpeting for my client’s new home! No trust funds laying in wait for things like this.

That money would have to come out of my pocket because my client still needed her carpeting!

I was supposed to go to a business luncheon, but instead, I spent the rest of the day on the phone–spinning my wheels.

One call of course, was to N. I braced myself because I had no idea how she would react and she had every right to be mighty upset.

N was her usual nice self and felt horrible for me. I’ll never forget what she said.

“I want to rip his eyeballs out for what he did to you!”

Part of being nice is having a great sense of right and wrong and knowing the appropriate way to express an injustice.

I told N not to worry. I would take care of everything as quickly as possible. She told me that she wasn’t worried and she knew that it would all come right.

While that much did make me feel better, it didn’t stop me from being worried sick.

I called the wholesalers. At least I still had the samples so I knew where everything came from. Back then, it was not a common practice to give an interior designer a wholesale account, but they took pity on me and granted me wholesale accounts! Can we say, silver lining?

Meanwhile, I had a connection at the DA’s office and pressed criminal charges. This is the district attorney of New York City. You got that, right?

Granted, they had far larger fish to fry than an unsavory miscreant running off with 30k worth of carpeting sold to some Westchester pillow-fluffer. But, they should’ve been straight with me from the get go. Instead, it took them nearly a year to blow me off.

Again, I was devastated.

I know what you’re going to say. Why didn’t you hire a lawyer, Laurel?

Right. That’s a reasonable question. I didn’t have a lawyer, but our three-year-old’s psychologist (yes, you heard that right) recommended a local White Plains lawyer, Ed Frey.

I called him up.

I told him the entire story.

What happened next shocked me almost as much as finding out I had been robbed.

This lawyer in Westchester County KNEW all about Swindler— our kindly carpetbagger. As it turned out, I wasn’t the only one who had been robbed. Swindler had other businesses and aliases and a long stream of angry chumps.

Frey matter-of-factly told me that he was all-too-happy to put the screws to this guy. I had every confidence in his abilities to do that. Interestingly, I never actually met Ed Frey face-to-face. All of our business was done with faxes, phone and of course, snail mail. After all, it was 1998. I felt fortunate to have found him. I was also fortunate that Swindler hadn’t declared bankruptcy.

I can’t tell you how much time went by. I wasn’t counting on ever seeing that money again. That’s life. However, one day I received notification that Frey had won a handsome judgment on my behalf against Swindler. It included lawyer’s fees AND interest.

In short order, I received a check every week. It went on for years until all the money had been paid back.

Shortly after that, N and family renovated another even larger home and she hired me again!

n-dining-room-1

Here is their current home. Sorry, not a great shot. But you can see the dining table I had commissioned and Barbara Barry’s dining chairs for HBF and Baker. (both are no longer manufactured) The HBF chairs were reupholstered in a Donghia fabric which I think looks amazing on those pretty chairs. I mentioned in a recent post that I don’t have this home in my portfolio because it’s so different from all of my other work. It was published, however in Westchester Magazine several years ago.

*********

Is there something to be learned from this story?

Aside from “this business is not for the faint of heart?”

There is always the possibility of great financial reversal with any young company and even an older company. One has to be prepared for this possibility and hopefully weather the storm.

Could the whole thing have been avoided? In this case, I don’t think so. I wasn’t going to some shady dude in a shabby part of town. He had an elegant showroom in the heart of midtown one block from the D&D building. He had an excellent reputation as far as I knew. How could I have known that the invoices spread all over his desk  meant something nefarious? I realized after the fact, that he must’ve been taking from one order to pay for another! It was like a carpeting Ponzi scheme of sorts. That is… until he was caught and shut down!

It took me a while to get over this. Certainly, getting the money back helped enormously. I lost large amounts in the other two situations and did not get any of it back.

I’ll save those stories for another time. Or maybe I’ll just let them stay buried. We’ll see.

Any of you have any horror stories you wish to share? If the mood strikes you, please let us know in the comments.

Thanks again, to all who shared their gallery wall stories in the last post. That was a lot of fun and very helpful!

xo,

laurel

  • Patricia Cahill - March 16, 2016 - 9:41 AM

    My first time reading your blog. You sound like a spirited personality and I like your style. Thank you for sharing, I look forward to next time. As ever, PatReplyCancel

    • Laurel Bern - March 16, 2016 - 10:47 PM

      Hi Patricia,

      In person, I’m very boring. haha! But thank you so much!ReplyCancel

  • Christina Rodriguez - April 16, 2015 - 6:56 PM

    Hi Laurel. I know what it’s like when a client “goes off” on you. It sucks. It happened with one of our software clients. My husband made the mistake of offering free customizations (w/o a limit) so he could improve our software from the user perspective. She told her boss that “the system” wasn’t finished when my husband told her no more. The man called and screamed at me over the phone. I finally told him that I would talk to him when he decided to be civil and hung up. I hate that kind of thing. 1) what she said wasn’t true, and 2) he didn’t need to scream at me. My hearing is just fine. lolReplyCancel

    • Laurel Bern - April 17, 2015 - 1:13 AM

      Hi Christina,

      Oh, I’m so sorry about that. If it makes you feel any better, Bunny Williams told us at the design bloggers conference that she’s had people calling her up and screaming at her! How do you scream at someone named Bunny? lol (who also happens to be super nice!)ReplyCancel

  • Christina Rodriguez - April 14, 2015 - 5:21 PM

    Wow, Laurel! That’s horrible! I’m so glad your client understood. Thanks for making me dread my next carpeting order! lolReplyCancel

    • Laurel Bern - April 15, 2015 - 1:16 AM

      Hi Christina, haha! well, unlikely that you’ll meet up with a subhuman like that!

      it’s funny, but when I meet a prospective client, I have a little barometer, so to speak as I’m listening to them. It tells me how they’d react if/when the shite hits the fan. I won’t take the job if I feel that they won’t be able to handle something going wrong. I mean losing their rag with me. not cool. Fortunately all of my clients are wonderful!ReplyCancel

  • Molly - April 13, 2015 - 5:02 PM

    I know this was in the past, but I just felt awful reading about it. What a horrible thing! I’m glad he was finally made to pay for it. And I’m glad you got through it.ReplyCancel

  • Vicki Johnston - April 12, 2015 - 10:59 PM

    Hi Laurel,
    I just finished pinning some photos from your blog from your post “Twenty Interior Designers I would Hire”. Beautiful, and I agree!! Along with this current post, and so many others I have enjoyed on your blog, I want to tell you how much I appreciate your generosity in sharing your knowledge of the business. Your blog is like a fun classroom for people interested in design!ReplyCancel

    • Laurel Bern - April 13, 2015 - 11:55 AM

      Hi Vicki,

      Thanks for stopping by and leaving such a kind comment! I enjoy writing it. It becomes a reference for me too! ReplyCancel

  • Terri Davis - April 12, 2015 - 3:24 PM

    Wow , Lauren. So very happy to hear you are one that got your money back. I don’t have any personal horror stories that beat that. But I have witnessed many others who did not get their money back. I have seen many Interior Designers put out of business because of things like this. I guess it’s one reason why I always err on the side of caution and prefer to work mostly on a fee basis these days. There are so many liabilities in this business.ReplyCancel

    • Laurel Bern - April 12, 2015 - 10:08 PM

      Hi Terri,

      I’d love to talk to you about this sometime. I’m not sure if this is what you are saying, but some designers just design and specify and then the client is on their own unless they want to pay additional. Fair enough. But what happens if something like this were to happen? It’s very rare. But yes, I was very lucky. Thanks for stopping by! xoReplyCancel

  • Wendy - April 12, 2015 - 1:25 PM

    Wow, we always assume it is going to be the client who refuses to pay. Not the vendor refusing to order/ship even after payment. I’m so glad to hear you survived that one. Not many new designers would have. Definitely a conversation to have with an insurance agent! Thanks for sharing.ReplyCancel

    • Laurel Bern - April 12, 2015 - 10:04 PM

      Hi Wendy,
      Oh, I think over-all, I’ve had more problems with vendors than clients. There was one vendor I worked with for years, like 13 and occasionally there would be some minor issues, but they always got fixed. And then their quality suddenly took a turn south. Horrible because I’m sure that my clients thought I was intentionally selling them crap furniture. Of course, I had no choice but to drop the vendor!ReplyCancel

  • K - April 12, 2015 - 10:14 AM

    How awful! The world of interior design can be a sketchy place. Stolen designs, stolen money, crooked venders, it’s a scary place out here!
    One story of mine reminds me so much of this… I’m a designer myself, and when I was an intern, I was working with a small residential firm. My boss took me to the house of these lovely people for the first chat about what kind of design they wanted in their new living space. The owner made us cookies, was polite as can be, and even sent us home with more food! So sweet. Well, about a month later, when the sketches, designs, And specs had been completed, along with some other work, we billed them. The normal amount, nothing crazy. Just the first of two bills. Well we got a call the next day from the owner…that nice lady who baked us cookies…. Wouldn’t you know it she says “oh…I thought your services were free?”
    ………..like my poor boss just drove around doing design work for charity every single day. Of course, I was an intern and didn’t get paid anyway, but my poor boss was devistated. We’d been hustled! Well, needless to say, I will never work another job without some kind of contract written up beforehand. It may have been my bosses fault for not doing that in the first place, but it goes to show you that you never know!ReplyCancel

    • Laurel Bern - April 12, 2015 - 10:33 AM

      Hi K,

      What a dumb cow! Not your boss, lol the cookie lady, or perhaps should we say, kooky lady!

      and yeah… gotta get that letter of agreement out with a design fee and/or a retainer. I don’t even do consults any longer for free. It weeds out the ones who think this isn’t a real profession, just a hobby and there’s some rich husband in the wings.

      I wish!

      Thanks for sharing that! ReplyCancel

  • bianca - April 12, 2015 - 3:56 AM

    My goodness! You really are a natural born storyteller…you pillow-fluffer, you. It’s obvious you have another calling…give us more, please!ReplyCancel

    • Laurel Bern - April 12, 2015 - 10:27 AM

      oh thank you Bianca! I have an insane number of stories. I guess most of us do. Thanks for stopping by!ReplyCancel