Restoration Hardware today announced a reorganization in order to develop new lines of business including apparel, accessories, footwear and jewelry. Chairman and CEO Gary Friedman will transition to become Chairman and CEO of Hierarchy, the first newly created company. He will be involved with Restoration Hardware in an advisory role with a focus on strategy, creative, and design direction. He will remain the largest individual shareholder of Restoration Hardware.
Carlos Alberini, Co-CEO of Restoration Hardware, will become Restoration Hardware's sole CEO and will lead all major functions of the business.
"The new structure provides a creative and efficient way to develop new businesses," said J. Michael Chu, a Managing Partner of Catterton Partners and Chairman of the Board of Restoration Hardware.
"Today's announcement supports our goal and belief that we can curate a lifestyle well beyond the four walls of the home," said Friedman. "It allows us to leverage our core capabilities to innovate, curate, and integrate new businesses and develop a brand that transcends typical models existing today. I am proud of the strong brand we have built, excited to pursue this new paradigm and partnership with Carlos, and passionate about imagining and creating a truly special business and brand."
Restoration Hardware will own a minority stake in Hierarchy and will have the exclusive right to acquire each of the new businesses when they reach an appropriate level of maturity and profitability.
Update: Friedman has stepped down from his positions after an internal inquiry into an intimate relationship he had with a 26-year-old female employee, according to an article in the New York Times.