RH details multiple 2022 initiatives; CEO cites ‘chaotic’ challenges in retail
RH is moving full-speed ahead in a number of areas from new store (“galleries” in RH speak) and restaurant openings here and abroad to Gulfstream charter jet rentals.
In his quarterly letter, Gary Friedman, CEO and chairman of the luxury home furnishings retailer, formerly known as Restoration Hardware, noted that while many of the brand’s plans for the past two years were disrupted by the pandemic, they were not disrupted by it.
“We used these past two years to reimagine and reinvent ourselves once again, and believe 2022 will mark the beginning of the next chapter of growth and innovation for the RH brand. 2022,” he said.
Friedman said RH’s plans for the year include:
• The opening of RH San Francisco (located at the Historic Bethlehem Steel Building), described by the company as its “most extraordinary new Bespoke Gallery” to date.
• The unveiling of the first RH Guesthouse, a luxury boutique hotel in Manhattan.
• The introduction of two new culinary concepts, an elevated “live-fire” restaurant opening in San Francisco, England and the Manhattan hotel, plus a Champagne and Caviar Bar also opening in the hotel this year, Both concepts will be expanded to future RH locations in Paris, London, Milan and Aspen.
“With average restaurant volumes approaching $10 million annually, and a very profitable four-wall model, we are making significant investments to build a world-class hospitality organization and see endless opportunities to elevate and activate our places and spaces,” Friedman stated.
• The liftoff of RH1 & RH2, the company’s customized Gulfstream G650 and G550 planes that will be available for charter later this year.
• The christening of RH3, a luxury yacht that will be available for charter in the Mediterranean and Caribbean.
• The expansion of the RH brand globally, beginning with the opening of RH England, which will be located on a 17th-century, 73-acre estate in the English countryside.
In addition, RH has secured real estate for future locations in London, Paris, Munich and Dusseldorf, and is in lease or purchase negotiations for Galleries in Milan, Madrid, Brussels and France.
• The opening of RH at The Gallery at Stanford Shopping Center, Palo Alto, Calif., which will represent the next evolution of its “highly productive prototype Galleries.”
[Read More: RH details more global store expansion; luxury yacht, gulfstream jet for hire]
But while RH is bullish on its future opportunities, Friedman gave a frank outlook of the risks facing businesses today on the company’s earnings call.
"I've never seen it so chaotic, honestly, from an execution point of view, whether it's construction, sourcing, manufacturing, shifting the supply chains, freight," Friedman told analysts. “Everything is a little out of sync in the world right now.”
As for RH’s response to the uncertainty, Friedman said the company is “trying to be more thoughtful. We're trying to make fewer, bigger, more important moves.”
RH reported net income of $147.045 million, or earnings per share of $4.91, in the quarter ended Jan. 29, up from $130.2 million, or earnings per share of $4.31, in the year-ago period.
Fourth-quarter net revenues increased 11% to $902.7 million.
For the full year, RH’s net revenues rose 32% to $3.759 billion versus $2.849 billion a year ago, and up 42% versus 2019.
The company ended the year with $90 million of net debt and nearly $2.2 billion of cash on its balance sheet.