HR CEO Gary Friedman told CNBC on Thursday that he was confident of the company’s expansion vision, even though some questioned the luxury furniture retailer’s moves in the European market or in new industries.
“It takes a long time to build something extraordinary in this world, and we still feel like we’re just heating up, honestly,” Friedman said in an interview with Jim Cramer on “Mad Money”. “We are more excited than ever and we see more opportunities than ever.”
RH, formerly known as Restoration Hardware, is planning to open stores in England and Paris next year as part of the California-based company’s international expansion.
The company is also moving towards hospitality – it already operates restaurants – with the debut of its RH Guesthouse concept in New York City. The opening is scheduled for this fall, followed by an RH Guesthouse in Aspen, Colorado, next year. Friedman rejects labeling them as hotels, saying that HR is trying to “create a new market for privacy and luxury”.
In Aspen, RH also has plans to develop homes in what it is calling its first “HR ecosystem”.
“Many of the things we will do will initially be misunderstood. And until they are seen and respected … then you cannot ignore them,” said Friedman.
Friedman is confident in the company’s ability to succeed in Europe, pointing to RH’s experience in sourcing products from the region, along with its position as the largest seller of Italian Belgian bed linen and linen in the world.
Friedman acknowledged that, on the surface, HR’s foray into new sectors, such as residential real estate, may seem strange to a company traditionally seen as a retailer. “But if you are trying to build one of the most admired brands in the world, if you want to do something extraordinary, you cannot follow a common path,” he said.
Friedman’s appearance on Thursday on “Mad Money” came a day after HR released fourth quarter earnings and earnings that exceeded analysts’ expectations. RH ended fiscal year 2020 with sales of $ 2.85 billion. In a letter to shareholders, Friedman wrote that RH believes that “the data supports the RH brand that reaches $ 5 to $ 6 billion in North America and $ 20 to $ 25 billion globally”.
RH shares rose 9% in Thursday’s session, closing at $ 529.08 each. The stock has risen nearly 400% in the past 12 months.