RH CEO Gary Friedman told CNBC on Thursday that he was confident in the company’s expansion vision, even if some may question the luxury furniture retailer’s moves in the European market or in new industries altogether.
“It takes a long time to build something extraordinary in this world, and we still feel like we’re 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 we have seen.”
RH, formerly known as Restoration Hardware, plans to open stores in England and Paris next year as part of the California-based company’s international expansion.
The company is also moving more into hospitality, already operating restaurants, with the debut of its RH Guesthouse concept in New York City. It’s scheduled to open this fall, followed by an RH Guesthouse in Aspen, Colorado, next year. Friedman refuses to label them hotels, saying RH is trying to “create a new market for privacy and luxury.”
In Aspen, RH also has plans to develop homes in what it calls its first “RH ecosystem.”
“Many of the things that we are going to do will be initially misunderstood. And until they are seen and respected … then you can’t ignore them,” Friedman said.
Friedman is confident in the company’s ability to succeed in Europe, pointing to RH’s expertise in sourcing products from the region, along with its position as the world’s leading sellers of Italian bedding and Belgian bedding. .
Friedman acknowledged that, on the surface, HR’s foray into new industries like residential real estate may seem odd for 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 take an ordinary path,” he said.
Friedman’s appearance on “Mad Money” on Thursday came a day after RH posted fourth-quarter earnings and earnings that beat analysts’ expectations. RH ended fiscal 2020 with sales of $ 2.85 billion. In a letter to shareholders, Friedman wrote that RH believes that “the data supports the RH brand reaching between $ 5 and $ 6 billion in North America and between $ 20 and $ 25 billion worldwide.”
RH shares rose 9% in Thursday’s session, closing at $ 529.08 each. The stock is up nearly 400% in the last 12 months.