RH is a unicorn, not as the term is used by investors but in the more classical sense of a rare and mythical creature that is hard to catch. It defies conventional wisdom.
How many companies do you know that take an established, high-profile brand and change it to just initials? Who still prints massive catalogs? How many brands do you know that have been able, or even try, to go from mid-market or even upper-mid to unabashed, unapologetic luxury?
The reverse? Absolutely. In fact, that’s the norm. Take a once great name that’s gotten dusty, maybe a little tarnished and extend its life by making it available to people who always aspired but could never afford it. Few would have been surprised in 2007 when Sears took a position in the company, to see Restoration Hardware branded shops or merchandise in Sears or, heaven forbid, Kmart. I’m sure even today that thought makes Gary Friedman cringe.
Instead, RH has gone in the exact opposite direction opening massive opulent “galleries,” determinedly moving the brand, its merchandise and its presentation ever more upscale. Once termed a “lifestyle store,” RH is pushing even that envelope, setting its sights on becoming a multi-faceted global lifestyle brand encompassing hotels (or “guesthouses” in RH parlance), its own luxury yacht available for charter and high-end, fully furnished housing under the RH Residences brand.
Of course, none of this is without risk, and the company and its audacious leader are not without their detractors. Short sellers continue to make up a substantial portion of the company’s investor base, and for every article that praises Friedman’s vision and the company’s execution, there’s another suggesting its stock success is as much financial sleight of hand as merchandising acumen and its counter-intuitive store strategy is out of sync with today’s retail reality.
But win or lose, there are valuable lessons to be learned from RH and its ambitious vision that, at its core, is built on making furniture sexy. This is aspirational merchandising at its best. When industry experts talk about keeping stores viable by creating an experience, RH is what they mean.
Cynics might scoff at the nomenclature — “source books” instead of catalogs, “galleries” instead of the more prosaic “locations” — but all of these reflect the consistency of culture necessary to execute across a growing and increasingly diverse organization. RH has even put its own twist on the typical lifestyle retailer’s curation philosophy, eschewing in-house design teams in favor of “curating the work of artists we love,” as Friedman says.
Earlier this month the company opened its latest gallery, RH Marin, a three-story, 60,000-square-foot work of art with the now-requisite roof-top restaurant, wine bar, artistic installations and, another new venture, RH Interior Design Firm & Atelier, which provides professional design services. Next year, the retailer has set its sights on European expansion with plans for a gallery in England.
All these efforts reflect a culture defined by grand yet consistent vision, a willingness to embrace risk and the recognition that reinvention is to be embraced and pursued with relentless determination. Not everyone can be RH, nor should they try to be. But there many lessons to be learned from this former purveyor of hard-to-find hardware as it transforms itself and, in some ways, the industry.