Home Furniture Retailer Plans More Stores, Warehouses After Thriving In 2020
Retailers that managed to thrive during an otherwise brutal year for the sector are doubling down on that success with real estate investments.
RH, formerly Restoration Hardware, announced that it had outperformed analyst projections in both earnings and sales in its fourth-quarter filing, CNBC reports. The luxury home furnishings company reported net income of $130M in 2020, far outpacing 2019's figure of $68M, and topped analysts' revenue projections by $14M.
Over the course of 2020, RH leased 60K SF of new retail space and plans to open four more locations in 2021, CoStar Group reports. The new locations will be iterations of its "design gallery" concept and include integrated restaurants and wine bars. The company also plans to open a 1M SF distribution center in Southern California this spring.
As American consumers were stuck at home for the bulk of 2020, they invested more in their living space than ever before, lifting RH as part of a rising tide for the home goods industry. Though it didn't quite match online seller Wayfair's 1,000% stock growth over the past year, its 375% rise over that period is nothing to sneeze at.
RH projects even more growth for 2021, expecting a 15% to 20% year-over-year increase in revenue, CNBC reports. Company leadership exuded confidence over its physical footprint strategy, dismissing notions that it would be better served by shifting more investment into an omnichannel supply chain, CoStar reports.
On RH's year-end earnings call Thursday, CEO Gary Friedman said the company is "indifferent" to the acceleration of e-commerce adoption by consumers over the course of the pandemic, CoStar reports.
"We don't really care where anybody places an order," Friedman said on the call, according to CoStar. "It doesn't change anything about our real estate strategy or online strategy or anything we're doing."
Friedman's confidence isn't precluding the brand from expanding into other ventures. Its RH Guesthouses hotel concept in New York City is approaching a fall opening, and it is in the early stages of planning a residential community in Aspen, Colorado, CNBC reports.