Restoration Hardware Boston and Tampa stores.
Most plants die in retail stores
Most retail stores have no natural light and according to the RH CEO Gary Friedman are where plants go to die! While most retailers are introducing smaller store formats and pulling back on mail catalogs, RH is doing the exact opposite. Technology is just another sales channel for them like the catalog business but for RH product presentation is key. They continue to buck the trend of smaller stores by opening large galleries. They believe that the best retailers will have the best physical and virtual experiences, it's not one or the other. Half of their sales are from stores the rest are direct. They recently announced the opening of a new concept RH modern. It will expand RH from just retro-classic looks to a more modern feel. In some cities the concept will have its own stores in others it will occupy current stores.
Earnings presentations are just as impressive. Cue the music!
RH has some beautiful stores but they also have an impressive video presentation. He even quotes Steve Jobs. The videos were introduced to help us analysts understand the company visually. See their Q1 presentation below.
They are also infamous for their large catalogs. 3,300 pages or weighing in 7.7 kilograms of photos across 13 catalogs double last years count. They received a lot of free media coverage some positive and some negative (my favourite deforestation hardware) but it got their brand out there. RH Modern will start out with a 300 page catalog.
Best stores and comps in retail
RH just reported a 15% increase in comparable stores sales on top of 18% last year. Over the past five years comps have averaged 24%. RH are targeting $4-$5 billion in future sales up from $2 billion today just in North America. They also have long term targets of mid to high twenties earnings growth. Range extensions are a big driver of growth including apparel accessories, antiques, art and kitchens. RH has 67 stores they have identified an additional 25 locations for 2016 and beyond. They are also in early discussions with international partners. If you can shop at RH you are doing well the company's target is consumers with an annual income over $200,000.
Jason
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