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retail watch | Nov 30, 2023 |
A tale of three RH openings

When RH opens a new store, it likes to make a big splash—except when it doesn’t.

Over the past few weeks, the high-end home furnishings retailer has turned on its big publicity machine for the RH opening in Indianapolis, inside what had been a private estate. The space is one of the brand’s most prominent locations besides its stores in high-profile urban centers like New York, San Francisco, Miami and Houston (to say nothing of the retail complex it debuted two hours outside of London earlier this year).

Meanwhile, across an ocean, RH also quietly opened two new locations in Germany (Düsseldorf and Munich), and both events were as low-key as we’ve seen from the decidedly theatrical company and its impresario CEO, Gary Friedman.

It’s not just a tale of three cities. It seems to be more about the statement stores RH has been opening over the past few years, balanced by its need to continue to expand in somewhat less grandiose ways.

The Indianapolis outpost is classic RH spectacle. Opened in mid-November, the Gallery—as they call their stores—is located inside the former home of the late philanthropist and residential real estate developer Christel DeHaan. The estate has more than 60 rooms and sits on 151 lakeside acres; in RH speak: “The property is a study in balance, symmetry and perfect proportions … and represents one of the largest, most inspiring and immersive physical expressions of the brand to date,” according to a company press release.

In keeping with RH’s penchant for blending hospitality with retail, the new location includes a restaurant (The Dining Room) in the former grand ballroom, as well as a wine bar in what it describes as “a luminous Calacatta gold-marble” space.

A tale of three RH openings
The Dining Room restaurant in the RH gallery in IndianapolisCourtesy of RH

“The DeHaan Estate is one of the most magical properties in North America, and we are honored to open its gates to the public for the first time,” said Friedman in a release announcing the opening. “From the immaculately groomed grounds and tree-lined driveway, to the massive stone terrace and boat dock overlooking the lake and forest, and the perfectly proportioned rooms filled with natural light from the abundance of windows, RH Indianapolis is a place to come and dream, be inspired by the architecture; get lost in the views, enjoy a meal in the grand ballroom or sip a glass of wine while strolling through the gardens.”

Several years ago, Friedman envisioned cities like Indianapolis being metro areas that would get smaller versions of the signature RH Gallery footprint as part of a second-tier expansion plan. Apparently, that has changed, at least when it comes to this new location—there is nothing small about it.

The contrast between the Indianapolis location and the Düsseldorf and Munich stores couldn’t be more stark. Both the stores are located in city centers, in what had been Abercrombie & Fitch “flagships” that closed as part of the clothing brand’s retrenchment in the European market. Abercrombie has shuttered seven of these stores, and RH is expected to take over a third one in Berlin as part of its European expansion, which is also slated to include Galleries in London, Paris, Brussels and Madrid over the next two years.

In its report, the German news site wrote that “the space RH is moving into is beautiful and prestigious, but Düsseldorf is a market with prominent, well-connected interior designers and numerous luxury interior brands already have their own showrooms in the city.” A picture of the new store shows a seven-story building on Königsallee, the city’s best-known shopping street.

The RH website also shows a U.K. location in Essex, about two hours from its flagship Aynho Park Gallery. It’s labeled an “outlet,” in keeping with the brand’s U.S. strategy of opening clearance stores near its bigger conventional ones.

The curiously under-the-radar Düsseldorf and Munich openings may be in response to the company’s recent financial performance, which has shown a slowdown in revenues; RH’s stock price has bounced around from its 52-week high of just over $400 a share to around $273 in November.

Whatever the reasons for the contrast between the openings, it shows that RH remains intent on going its own way and playing the long game in its expansion plans. So far, that strategy has worked here in the U.S. We will see if the same approach works overseas.

Correction: December 1, 2023
An earlier version of this story misstated that RH had not hosted an opening party for the German galleries. The brand did hold opening night events at both stores in November.

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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.

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