2 weeks Ago By CBS Bay Area
Dana Borneo is between a rock and a hard place. She's an interior designer who uses Corte Madera-based RH, formerly Restoration Hardware, to find her pieces. But the retailer's stunning stock drop and looming tariffs have Borneo and her clients on edge.
"A lot of them have been in contact with me today, saying we want to buy right now, before you know anything goes any higher," Borneo said. "So, I don't really know how to advise them at this point, I understand their panic." RH stock tanked more than 40 percent as investors responded to the double blow of the company's poor earnings report and President Trump's tariffs.
RH sources a majority of its products from Asian countries, including Vietnam and China. Both are countries the president is targeting with tariffs. CEO Gary Friedman's shock was recorded as he reacted to the stock tanking during the company's earnings call.
RH isn't the only Bay Area retailer that was hit. GAP and Williams Sonoma also saw their stock plunge. UC Berkeley business professor, Jeep Klien isn't surprised.
"The cost would rise, would squeeze down the margin that there are certain things that they cannot pass on to the consumer," Klien said. "They have to absorb themselves. And this is why we see a lot of movement in the stock market.
" Klien said businesses can shop around for other raw materials, but it won't change much. "We expect to see the rise of the pricing, and that is something to be concerned about, because, you know, we just experienced inflation in the past few years." Her best advice right now: Don't panic.
"We have been through this before. During the you know, 1930s, 1940s and this is why we created a World Trade Organization. And we know that ultimately, the lower price level benefits the consumers overall," Klien said.
Charlotte Ruffner tried not to panic. But she was worried. "I thought about things that I need to purchase this year, and so I headed out," Ruffner said.
"I'm here today to buy this new iPhone 16, and I usually don't get a lot of memory, but I decided this phone is going to have to last me for the next three years." The stock market brought home a global crisis impacting all Americans. Interior designer Borneo just hopes she can survive it.
"I'm just trying to keep it all in perspective and move forward, really, trying to not only protect myself, but try to protect my clients in this scenario," Borneo said..
