RH (Corte Madera, Calif.) says it plans to open seven new design galleries in the current year. The luxury home furnishings retailer disclosed those openings in its most recent quarterly earnings report, during which it reported revenues of $727 million and an adjusted operating margin of 6.5%.
“We are pleased to report that our demand trends inflected positive in the first quarter and continue to build momentum despite operating in the most challenging housing market in three decades,” said CEO Gary Friedman. “We believe our investments in the most prolific product transformation and platform expansion in our history has positioned RH to gain significant market share in North America while building the foundation for our long-term global expansion across the United Kingdom, Europe, Australia and the Middle East over the next several years.”
As for 2024, Friedman says RH’s expansion plans include:
• Opening five North American Design Galleries, including Cleveland and Palo Alto, which are now open, plus Raleigh, N.C., Newport Beach, Calif., and Montecito, Calif., all with integrated RH Interior Design Offices, restaurants and wine bars.
• Taking the wraps off two European Galleries – one in Brussels, which opened in the first quarter, and the other in Madrid. Both are in historic buildings, which RH says “elevates our product and renders our brand more valuable.”
• Opening an RH Interior Design Studio in Palm Desert, Calif. “We believe there is an opportunity to address new markets locally by opening Design Studios in neighborhoods, towns and small cities where the wealthy and affluent live, visit and vacation, as we’ve done in East Hampton and the Napa Valley, as well as augmenting some of our Design Galleries in larger markets with additional design services in stand-alone Design Studios,” Friedman says.
• Launching a 3500-square-foot Waterworks Showroom in its new Design Gallery in Newport Beach, Calif., in the fourth quarter of 2024. “Waterworks today is just shy of a $200 million dollar business with mid-to-high teens EBITDA margin that we believe has the potential to become a billion-dollar global brand on our platform,” said Friedman.
Overall, the CEO concludes, “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.”