RH CEO confident in the retailer’s expansion plans: ‘We still feel like we’re just warming up’
RH CEO Gary Friedman told CNBC on Thursday he was confident in the company’s expansion vision, even if some may question the luxury furniture retailer’s moves into the European market or new industries altogether.
“It takes a long time to build something extraordinary in this world, and we still feel like we’re just warming up, honestly,” Friedman said in interview with Jim Cramer on “Mad Money.” “We’re more excited than we’ve ever been and we see more opportunity than we’ve ever seen.”
RH, formerly known as Restoration Hardware, is planning to open stores in England and Paris next year as part of the California-based company’s international expansion.
The company is also moving further into hospitality — it already operates restaurants — with the debut of its RH Guesthouse concept in New York City. That is set to open this fall, followed by an RH Guesthouse in Aspen, Colorado, next year. Friedman rejects labeling them as hotels, saying RH is trying to “create a new market for privacy and luxury.”
In Aspen, RH also has plans to develop homes in what it’s calling its first “RH ecosystem.”
“A lot of the things we’re going to do are just going to be, initially, misunderstood. And until they’re seen and respected … then you can’t ignore it,” Friedman said.
Friedman is confident in the company’s ability to be successful in Europe, pointing to RH’s experience sourcing product from the region, along with its position as the top Italian bedding and Belgian linen sellers in the world.
Friedman acknowledged that on the surface, RH’s foray into new industries like residential real estate may seem odd for a company traditionally viewed as a retailer. “But if you’re trying to build one of the most admired brands in the world, if you want to do something extraordinary, you can’t take an ordinary path,” he said.
Friedman’s appearance Thursday on “Mad Money” came one day after RH posted fourth-quarter revenue and earnings that surpassed analyst expectations. RH finished fiscal 2020 with sales of $2.85 billion. In a letter to shareholders, Friedman wrote that RH believes the “data supports the RH brand reaching $5 to $6 billion in North America and $20 to $25 billion globally.”
RH shares rose 9% in Thursday’s session, closing at $529.08 apiece. The stock is up almost 400% in the past 12 months.