CORTE MADERA, Calif. — Top 100 retailer RH’s plans in the luxury space go beyond selling home furnishings products. It wants the whole home.
However, selling product remains a cornerstone of the Corte Madera, Calif.-based brand’s plans.
In its second quarter earnings report, Gary Friedman, chairman and CEO of RH, detailed the company’s plans for home furnishings, hospitality, architecture and more.
“Our strategy is to move the brand beyond curating and selling product to conceptualizing and selling spaces, by building an ecosystem of Products, Places, Services and Spaces that establishes the RH brand as a global thought leader, taste and place maker,” Friedman wrote in an executive statement that accompanied earnings.
Friedman said RH Guesthouses represent the brand’s goal to create a new market for travelers seeking privacy and luxury in the $200 billion North American hotel industry. It’s also creating bespoke experiences like RH Yountville, “an integration of Food, Wine, Art & Design” in the Napa Valley; private jets RH1 and RH2; and RH3, a luxury yacht that is available for charter in the Caribbean and Mediterranean where the wealthy and affluent visit and vacation.
Friedman called it all RH’s long-term strategy of building the world’s first consumer-facing architecture, interior design and landscape architecture services platform inside its Galleries, elevating the RH brand and amplifying core business by adding new revenue streams while disrupting and redefining multiple industries.
“Our strategy comes full circle as we begin to conceptualize and sell spaces, moving beyond the $170 billion home furnishings market into the $1.7 trillion North American housing market with the launch of RH Residences: fully furnished luxury homes, condominiums and apartments with integrated services that deliver taste and time value to discerning time-starved consumers,” he wrote.
Retail remains a key piece of the puzzle, which Friedman said represents a multi-billion dollar opportunity.
Recently, RH opened RH England, The Gallery at the Historic Aynho Park, a 17th-century, 73-acre estate. Friedman said due to its countryside location, officials expect most of its revenues to be driven by interior design and trade businesses.
“While pleased with the early response, there is still much to learn about the seasonality of the business in the English countryside, especially in the winter season,” he wrote. “We will know more once we start mailing Sourcebooks and experience a couple of seasons.”
Global expansion also includes openings in Düsseldorf and Munich later this year, with Paris, Brussels and Madrid for 2024, and London, Milan and Sydney for 2025.
Domestically, RH plans to open RH Indianapolis and RH Cleveland in the second half of this year, while RH Palo Alto and RH Montecito will now open in early 2024. Additionally, Friedman said there are an additional 12 Galleries in development for North America, as well as multiple Design Studios, with more than 40 potential identified locations. He said the smaller footprint stores have proven to be a success.
“We have several existing locations that have validated this strategy in East Hampton, Yountville, Los Gatos, Pasadena and our former San Francisco Gallery in the Design District, where we have generated annual revenues in the range of $5 to $20 million in 2,000 to 5,000 square feet. We have just secured our first new location for a Design Studio in Palm Desert, which should open in the first half of 2024.”