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July 24, 2023 : RH CEO Gary Friedman emphasizes the success of RH’s first international venture, RH England, which recently opened in Aynho Park. This launch is a crucial milestone for the company’s planned expansions in major markets like Brussels, Dusseldorf, Munich, Madrid, London, Paris, Milan, and Sydney over the next two years.
RH is introducing the new RH Contemporary collection and other collections across different categories to achieve their ambitious goals of “climbing the luxury mountain” and generating $20 to $25 billion globally and $5 to $6 billion in North America.
While RH had made significant progress towards its North American revenue target, reaching $3.6 billion in 2022, there have been recent setbacks. In the first quarter of 2023, revenues dropped by 23% year-over-year, and the company forecasts another big drop for the second quarter. Additionally, the RH Members Program, crucial for the core furniture business, experienced a significant decline of 24% in membership.
RH’s expansion into the U.K. market with RH England has sparked curiosity among interior designers. However, concerns have been raised about the suitability of RH’s super-sized furniture for smaller U.K. spaces, and adjustments to the assortment to reflect local tastes might be necessary.
The introduction of the RH Contemporary collection has faced challenges due to supply chain issues and pricing concerns. Despite early consumer interest, visits to the RH Contemporary site have declined. The company believes the line holds potential, but more advertising and marketing efforts will be needed to increase awareness and demand, particularly among U.K. designers.
The RH Members Program’s decline raises questions about the company’s reliance on this membership model. While current members value early access to sales and discounts, this strategy may impact RH’s luxury brand status in the long term.
Despite the challenges, affluent consumers are still actively investing in home furnishings, and RH has an opportunity to capture a significant share of this market. The company’s newness, curiosity, and dedication to introducing fresh collections will stimulate customer interest and ultimately benefit its bottom line. However, challenges remain as RH works towards its ambitious growth targets.
