On January 30, 2010, my wife and I met with Sarah Blank, the founding partner and head-designer of SBD Kitchens, LLC in order to discuss renovations to our home in Darien, Connecticut. During the course of our meeting, I asked Ms. Blank about how SBD would be compensated if we selected it as our designer. My wife and I, who both have post-graduate business degrees from top business schools, left the meeting under the impression that we understood how SBD would charge us for the work on our home.
After that meeting, we asked Ms. Blank to complete a pricing exercise in order to evaluate the cost of SBD’s services in comparison to another designer. Ms. Blank and the other designer both completed the exercise and based on SBD’s response we felt comfortable retaining SBD and providing it with a substantial non-refundable payment. Subsequently we proceeded under two contracts that we believed included the pricing methodology that we thought SBD had conveyed to us.
Close to the end of the project, after we had paid SBD over $500,000, we became concerned that we had not been charged in accordance with our original understanding. We requested to see all of the bills and invoices, which would reflect the actual costs of the materials involved in the renovation, but SBD declined to provide us with this information. We subsequently filed suit against SBD.
During the case, SBD claimed that we had been charged an “industry standard” markup on the entire project. Charles Karas, co-owner of SBD, testified that SBD applied a multiplier to all of the materials associated with the project. When asked what he would say if a potential client asked the exact amount of SBD’s markup, Mr. Karas testified that he would respond “None of your business.” He also told us that SBD could charge us as it “saw fit.” He further acknowledged that nothing in SBD’s proposed budgets for our project indicated that a multiplier was being applied to all of the materials involved and that there was no way that we could have figured out the amount of SBD’s markup on materials. Mr. Karas also testified that SBD never diverges from the pricing methodology used in our renovation. We were totally shocked by the amount of the markup. It was far beyond what we ever could have imagined, especially because we had met with another designer who conveyed that she charged a markup of less than 20%. We did not get into detailed discussions with this vendor if there were any other peripheral charges, but regardless, SBD’s markup on materials was multiples higher then the markup on materials of this other vendor that we had rejected. If Ms. Blank had informed us at our January 30 meeting that SBD, in accordance with “industry standards” charged the substantial markup on materials that it did, we never would have retained SBD.
Our counsel contacted the National Kitchen and Bath Association in order to obtain more information about the supposed “industry standard” and received the following in reply from a NKBA member:
“There is no industry standard for mark-ups. I have heard discussions by various dealers about their mark-ups and I can assure you the general mark-up for a total kitchen project is nowhere near the [figure] you mentioned. Keep in mind that each kitchen dealer is their own boss. The[y] can charge what they want.”
I am posting this information to inform people about my experience with SBD.
As a postscript to the case, in the end, the arbitrator concluded, among other things, that SBD’s contracts violated the Connecticut Home Improvement Act and that we were not required to pay its last invoice because its contracts violated this important consumer protection law. The arbitrator also found that I made some defamatory statements about SBD on a prior version of this website. I am appealing that portion of the arbitrator’s decision in Connecticut Superior Court.