RH to Remodel All Stores, Unveil New Gallery Design

Upscale furniture maker RH (Corte Madera, Calif.) will remodel all of its stores and introduce a new gallery design as it looks toward the coming year.

That plan was disclosed by CEO Gary Friedman in the company’s third quarter earnings call, though he didn’t offer details on the upcoming brick-and-mortar initiatives.

RH, formerly known as Restoration Hardware, also announced a pair of acquisitions. The company is buying Dmitriy & Co., a to-the-trade upholstery atelier, as well as Jeup Inc., a custom furniture designer. Terms of those deals were not revealed.

Additionally, RH is launching an editorial-content platform “that will celebrate the most innovative and influential people and ideas that are shaping the world of architecture and design.” The brand has hired Margaret Russell, the former Editor-in-Chief of Architectural Digest and Elle Decor, to head that effort.

For its third quarter, RH reported net revenue of $869 million, beating Wall Street estimates. That figure, however, marks a 13.7 percent decline compared to the $1.006 billion in revenue generated in the year-ago quarter.

In a letter to shareholders, Friedman again lamented the “widespread discounting” across the home furnishings industry.

“ … While it’s been almost two years since we’ve deployed a promotional email, we’ve been receiving two sale emails per day from many home furnishings retailers,” Friedman wrote. “Although the stark contrast in strategy may lead to a short-term risk of market share loss, we believe there is certain long-term risk of brand erosion and model destruction for those who choose the promotional path.”

The retailer operates 67 stores, which it calls galleries, as of Oct. 29.