At first, it was a standard RH earnings call. Chairman and CEO Gary Friedman kicked off the festivities with some impressive numbers: The company had once again exceeded analyst predictions, beating expected earnings per share by 20 percent and drawing in an impressive $869 million in revenue for the third quarter. Those figures were followed by a recitation of the now-familiar “climbing the luxury mountain” metaphor that Friedman uses to describe RH’s continuing ascent from humble tchotchke retailer to high-end brand.

But from there, it felt less like a mountaineering expedition, and more like Friedman was on a rollercoaster ride.

Let’s start with the ups. Friedman used the call as an opportunity to announce three big pieces of news, starting with the acquisitions of Los Angeles–based upholstery brand Dmitriy, and Michigan-based furniture maker Jeup. In addition to buying both companies, RH has hired their respective founders to develop and run in-house programs: Donna and David Feldman of Dmitriy will launch RH Couture Upholstery, while Joseph Jeup will oversee the new RH Bespoke Furniture. Though Friedman didn’t get into specifics, the branding and the talent involved highly suggest that he’s looking to offer a version of the custom workroom experience at retail scale.

Finally, the marquee hire. Friedman announced that former Architectural Digest editor in chief Margaret Russell would be joining the Corte Madera, California–based retailer’s team, where she’ll be tasked with launching a forthcoming editorial platform Friedman dubbed RH Media, a publication that will “celebrate the most innovative and influential people and ideas that are shaping the world of architecture and design.”

Each of the three moves are significant news in the design industry—Friedman seemed to acknowledge as much, responding to an analyst inquiry about the news by noting that “right now, there [are] a bunch of people in the high-end trade that just said WTF.” They may also not be new news, exactly—rumors about Jeup and Dmitriy being snapped up by RH had been swirling in the industry for some time—but whatever the timing, the implication is clear: RH is making a concerted effort to compete in the tip-top of the design market.

“We’re not just going after a market [based on] how big a revenue opportunity is there,” said Friedman, noting that the high-end was the most profitable sector. “We’re also going to create a market, because that product at that level of the market is not accessible. You can’t go into those showrooms. The goods aren’t priced. You’re kind of blind, and you have to go through a middle person to have that quality and that design … We think it will be a big plus to our brand.”

The incorporation of Dmitriy and Jeup and the hiring of Russell, alongside RH’s 2016 acquisition of Waterworks, “firmly plant four RH flags at the very top of the luxury mountain, and clearly state our intention of establishing RH as an arbiter of taste and design,” said Friedman. He indicated that additional future acquisitions at the top of the market are a possibility.

Friedman also offered a frank assessment of where the company is competitive with trade brands at present, but also where he hopes his product will soon land within consumers’ homes: “Today, we mostly play in the family room [and] second bedroom. I don’t know [that] we get that customer’s living room, master bedroom, main house. I think it’s just going to open up a lot of opportunity.”

Despite all of the big news, it wasn’t all sunshine in Corte Madera. Though Friedman took a positive tone about his company’s long-term future, he’s “never been more uncertain about the present” and was candid that he was “not optimistic” about the short term.

RH did have a few financial misses: The company’s gross profit margin had contracted by 50 basis points, and it slightly downgraded its expectations for the remainder of the year. But the real cause of Friedman’s woe wasn’t the nitty gritty of his balance sheet, but the “complete collapse” of the luxury housing market—a dropoff that he compared to the 2008 recession several times. “If you track the performance of home furnishings retailers against past housing downturns, that would tell you things are going to get worse before they get better,” he said, quoting dire statistics from online brokerage Redfin and the National Association of Realtors. “The housing industry is in a free fall.”

Friedman went on to suggest that the pain would be felt most acutely at the top of the market. “With the greatest migration of people moving from cities to suburbs in the history of America during COVID, and to second-home markets, the people that did that [were the ones who] could afford to do that,” he said. “The luxury housing market went up faster and higher, and the luxury housing market is going to go down faster and lower.”

Homepage photo: Pieces from RH’s Contemporary collection | Courtesy of RH