Firm formerly called Restoration Hardware defends expansion as path to ‘very top of the luxury mountain,’ despite tough economy

Restoration Hardware, Marin County, has expanded its presence within the luxury lifestyle market by acquiring new custom furniture divisions. The company also hired a key employee to launch a media platform focused on high-end designs.

These actions were announced RH (NYSE: RH) reported lower fiscal third-quarter revenues and earnings than a year ago — but higher than at the same point in 2019, pre-pandemic. The Corte Madera-based company responded to the doubts surrounding its expansion in uncertain economic environments.

RH announced the acquisition of Dmitriy & Co., a New York-based business-to-business custom-upholstered company. It also hired Donna Feldman and David Feldman as its founders to manage the HR Couture Upholstery unit.

RH also acquired Jeup Inc. (Michigan), a B2B custom furniture manufacturer. Joseph Jeup was hired by RH Bespoke Furniture.

RH Media was launched by Margaret Russell, ex-editor-in-chief of Elle Decor and Architectural Digest. The company will produce content focused on “the most innovative and influential people and ideas that are shaping the world of architecture and design.”

CEO Gary Friedman wrote in a letter to shareholders Dec. 8 that the latest acquisitions and hires, along with the company’s previous pick-up of Waterworks, “firmly plant four RH flags at the very top of the luxury mountain, and clearly state our intention of establishing RH as an arbiter of taste and design.“

RH reports RH Contemporary has been launched. RH San Francisco also offers fine dining in multiple galleries. RH Guesthouse offers charter jets and yacht services. The company also purchased 857 acres of Napa Valley land as a resort/winery.

Friedman stated in the letter, “RH plans to redesign all U.S. store in 2023” and open its first gallery abroad in RH England. The estate covers 73 acres and will include three restaurants. For 2024–2025, galleries under construction are RH Paris and RH London. Locations have been secured for stores in Milan, Madrid, Munich, Germany’s Dusseldorf and Brussels, some also opening by 2025.

The company wants to be part of creating homes that customers can live in. RH Residences will build fully furnished luxury homes, condos and apartments. “integrated services”For “time-starved consumers,”Friedman wrote.

Dec. 8 saw net revenues for the quarter ending October 29 at $869m, a decrease from 13.6% compared to the previous year and $2.82billion in the first nine months. This was a decrease 1.3% However, net sales were greater than the pre-pandemic period. They rose by 28.2%, to $677m in Q3, and by 42.1%, to $1.98billion over the first nine month.

The company is revised down by 1 percentage point the top end of its fiscal-year revenue decline projection, now around $3.6 billion, or down 3.5%–4.5%, from fiscal 2021.

The net income for last quarter was $98.8million. That’s 46.3% lower than a year earlier. Nine-month earnings were also $421.7million. That’s 22.1% less. The diluted earnings per shares were $3.78, which is 35.7% less than the previous quarter.

During a conference telephone call on December 8, officials from the company discussed their plans for growth and milestones in 2022. Investor analysts were critical of the call.

Simeon Gutman, a retail analyst at Morgan Stanley, is Simeon Gutman. He asked if the firm would. “continue to invest for the future and still be somewhat responsible here for the near-term,”Economy can cause you to halt or reduce your plans.

“We’re not putting any longer-term investments on pause,”Friedman replied, according to the Seeking Alpha transcript. “I mean, we’re playing for the long-term. So we’re not doing irresponsible things that other people are doing like promoting their business and selling.”

He pointed to repeated promotional emails some competitors are sending to customers weekly, while RH hasn’t sent out an email to customers with discounts for two years. Friedman also mentioned other important moves. “reinvent the business,”It includes the move up during the 2001 recession, and further during Great Recession 2007-2009.

Firm formerly called Restoration Hardware defends expansion as path to ‘very top of the luxury mountain,’ despite tough economy

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