retail | Dec 27, 2021 |
Will 2022 be RH’s biggest year ever?

Rarely have two letters of the alphabet had the power to evoke such a strong response in the home industry as R and H. Over the past decade, the home retailer formerly known as Restoration Hardware has carved out a significant slice of the market for high-end home goods, redefining the landscape in the process. Marvel at its success or grumble at its ubiquity, everyone has an opinion about RH.

To some, it may seem like RH is already everywhere, but the company’s chairman and CEO, Gary Friedman, no plans to slow down, and 2022 promises to be a pivotal year for the California-based brand. The stakes are high. In 2021, the company’s stock price peaked in the wake of the pandemic home boom but has since leveled off and is currently trading near where it was in the beginning of the year. The coming period will determine whether Friedman can reverse the momentum (or at least halt the slide) and get Wall Street excited about RH outside of the context of a red-hot market for home.

Luckily for Friedman, he has plenty of levers to pull. A huge swath of new product and new initiatives, delayed or paused by COVID, are slated to see the light of day next year. Taken together, they make up what may prove to be RH’s biggest 12 months in recent memory—in a recent earnings call, Friedman referred to 2022 as “the year of the new.” Below, we’ve compiled what the brand has on deck and what it might mean.

Tons of new product
RH has not had a significant release of new product in two years. That’s about to change. The brand’s forthcoming RH Contemporary line is set to debut in 2022, and according to Friedman, it marks “the most meaningful new product launch in our history,” with an accompanying 500-page sourcebook, its own standalone gallery, and a national advertising campaign. That’s alongside new introductions in the brand’s existing collections as well. Simply put, RH is about to unleash an avalanche of new goods into the market.

Only time will tell whether it catches on (and whether there will be a big appetite for new furniture as the home boom recedes), but Friedman is confident RH Contemporary, in particular, will make a splash. “I think it will attract some of the highest-end interior designers to our brand. I think it will have the customers of the highest-end interior designers point them to our brand,” he said in a recent earnings call. “I think it is one of those undeniable things that we are going to do—that you can’t ignore it. It’s going to be a big deal in our industry.”

Global Expansion
It’s been in the works for some time, but RH is finally making its debut across the pond. In late spring or early summer, the brand is set to open its first gallery in England, and it’s a marquee location: an estate outside of London originally designed in 1615 by architect Sir John Soane. Interestingly, Friedman says that the ultimate open date might depend on the weather as much as the market. “When we see the first few sunny days, we will be ready, and we want to open on a day that everybody is smiling and everybody is happy,” he told investors. Whenever the day comes, it will be a significant event for RH. Friedman has long been vocal about his goal of turning the company into a global luxury brand—one that is mentioned in the same conversation as LVMH—and having a presence in Europe is a crucial piece of that vision. In addition, the company has already secured locations for future showrooms in London and Paris as well as Munich and Düsseldorf in Germany.

Hospitality
Friedman has been talking about expanding into the hospitality market for some time—this year, it’ll start to happen in earnest. In late spring, the company will finally open its already-completed RH Guesthouse in New York, marking the first step toward breaking into the enormous hospitality market and just in time for (knock on wood) the return to travel in earnest. Friedman has long promised a hotel experience unlike any other, and in 2022, we’ll finally see what the company has cooked up. Though guesthouses will only be a tiny drop in the revenue bucket, they could represent a significant source of income in the years ahead (the next location is Aspen, which will include a bathhouse and spa). If nothing else, they’ll keep the company in the headlines throughout the coming year.

One of Friedman’s greatest insights over the past decade has been to identify a white space of the market that existed above mass-market retail and below bespoke trade makers. Thus far, RH has mostly occupied that space alone, but that may be changing. Arhaus, the Ohio-based high-end retailer, just went public and is planning to double its showroom footprint. Oka, the British chain, has started opening locations in the U.S. and is looking to swim in the same waters as RH. Meanwhile, direct-to-consumer brands like Interior Define are looking to grow big next year as well. All that is to say, 2022 will be a big year for RH—and its competitors, too.

Homepage image: The interior great room of RH Dallas | Courtesy of RH

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