RH spring books will be ‘revolutionary’
Home & Textiles Today Staff -- Home Textiles Today, March 28, 2014
Corte Madera, Calif. — Coming in May: 3,200 pages of home furnishings, hand-delivered to the front door by UPS.
RH, the rebrand for Restoration Hardware, is upping the ante on consumer engagement with 13 spring “source book” catalogs dropping in May vs. six last spring. Total page count is double last year’s 1,600.
“There's a very new and, we think, highly logical experience that is going to especially translate well when shopping by lifestyle and/or category,” chairman and ceo Gary Friedman told analysts during the company’s quarterly conference call yesterday afternoon. “I think this is the most revolutionary thing I've been involved with in my entire career.” While he demurred on specifics, Friedman said the new approach involves spotlighting merchandise that hadn’t received adequate display space previously. “If the customers can't see it, you usually can't sell it,” he added.
Only about 10% of the company’s product assortment is displayed at retail.
By shifting delivery from the U.S. Post Office to UPS, RH will receive daily notification of addresses that have been serviced, allowing it to generate follow-up email notifications to those households, Friedman said. “As a result, we expect an increased response rate will offset increased cost and greatly enhance the perception of our books and our brand.”
During the fourth quarter ended Feb. 1, net income totaled $26.6 million or 65 cents per share vs. a net loss of $28.4 million or 79 cents per share in the year-ago period.
Revenues totaled $471.7 million for the 13-week quarter ended Feb. 1. That was up from $398.1 million in the comparable quarter, which was 14 weeks. Excluding the additional week in the previous year’s fourth quarter, the company said revenues rose 26%. Same-store sales were up 17%, and comparable-brand revenue growth, which includes catalog and ecommerce sales, rose 24.
Results were even stronger for the fiscal year ended Feb. 1. Revenues rose 30% to $1.55 billion, while same-store sales jumped 27% and comparable-brand revenue growth shot up 31%.
Net income for the year totaled $18.2 million or 45 cents per share. That reversed the previous year’s net loss of $12.8 million or $1.36 per share.
As of Feb. 1, Restoration Hardware operated 70 stores including 62 galleries, five Full Line Design Galleries, three Baby & Child Galleries and 17 outlet stores.
Later this year, the company plans to open stores in Los Angeles and Atlanta, and will significantly expand its flagship New York City location.
Friedman said the company has signed five more leases for Full Line Design Galleries, and is in negotiations for another 25 locations.
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