RH CEO is confident in the retailer’s expansion plans: “We still feel like we’re warming up.”
Gary Friedman, CEO of RH, told CNBC on Thursday that he was confident about the company’s expansion vision, even if some may question the luxury furniture retailer’s moves into the European market or into new industries as a whole.
“It takes a long time to build something extraordinary in this world, and we still feel like we’re honestly just warming up,” Friedman said in an interview with Jim Cramer about Mad Money. “We’re more excited than ever and see more opportunities than ever.”
RH, formerly known as Restoration Hardware, plans to open stores in England and Paris next year as the California-based company expands internationally.
With the debut of its RH Guesthouse concept in New York City, the company is also moving further towards the hospitality industry – it already operates restaurants. That is slated to open in the fall, followed by an RH guesthouse in Aspen, Colorado next year. Friedman refuses to refer to them as hotels, saying RH is trying to “create a new market for privacy and luxury”.
In Aspen, RH is also planning to develop homes in its first “RH ecosystem”.
“A lot of the things we’re going to do are just misunderstood at first. And until they’re seen and respected … then you can’t ignore it,” Friedman said.
Confident that the company can thrive in Europe, Friedman points to RH’s experience sourcing locally sourced products and its position as the leading Italian bedding and Belgian linen seller worldwide.
Friedman acknowledged that RH’s foray into new industries like residential real estate may seem strange at first for a company traditionally viewed as a retailer. “But when you’re trying to build one of the most admired brands in the world, when you want to do something extraordinary, you can’t go down an ordinary path,” he said.
Friedman’s appearance on “Mad Money” on Thursday came the day after RH posted fourth quarter revenue and earnings that exceeded analysts’ expectations. RH ended fiscal 2020 with sales of $ 2.85 billion. In a letter to shareholders, Friedman wrote that RH believes “the data supports the RH brand, which hits $ 5-6 billion in North America and $ 20-25 billion globally.”
RH stock rose 9% on Thursday to close at $ 529.08 apiece. The stock is up nearly 400% over the past 12 months.