RH Stock

RH is a leading retailer and luxury lifestyle brand operating primarily in the home furnishings market. The company’s curated and fully integrated assortments are presented consistently across its sales channels, including its retail locations, websites and Source Books. The company offers merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, decor, outdoor and garden, and baby, child and teen furnishings.

The company’s retail business is fully integrated across its multiple channels of distribution. The company is positioning its Galleries as showrooms for its brand, while its websites and Source Books act as virtual and print extensions of its physical spaces, respectively. The company operates its retail locations throughout the United States, Canada, and the U.K., and has an integrated RH Hospitality experience in 14 of its Design Gallery locations, which includes Restaurants and Wine Bars.

In addition, the company opened its first RH Guesthouse in New York in September 2022, a first-of-its-kind hospitality experience for travelers seeking privacy and luxury. The property features six guest rooms, three guest suites and a private residence, as well as The Dining Room & Terrace.

Products and Product Development

The company has positioned RH as a lifestyle brand and design authority by offering expansive merchandise assortments. The company is merchant of luxury home furnishings and its products embody its design aesthetic and reflect inspiration from across the centuries and around the globe.

The company has developed a proprietary product development platform that is fully integrated from ideation to presentation. Key aspects of the company’s product development platform are:

Organization—The company has established a collaborative, cross-functional organization leading its product development, sourcing, merchandising, inventory and creative teams. The company’s product teams are focused on maximizing the sales potential of each product category across all channels, which eliminates channel conflicts and functional redundancies.

Process—For many of its products, the company works closely with its network of artisan partners who possess specialized product development and manufacturing capabilities and who it considers an extension of its product development team. The company collaborates with its global network of specialty vendors and manufacturers to produce artisanal pieces of high quality and value on a large scale, including both distinctive original designs and reinterpretations of antiques.

Facility—The company has built the RH Center of Innovation & Product Leadership, a facility that supports the entire product development process from product ideation to presentation across all channels.

The company’s proprietary organization, process and facility enhance its ability to introduce more new products with each collection.

Sales Channels

The company distributes its products through a fully integrated sales platform comprising its retail locations, including RH Galleries and Waterworks Showrooms, in addition to its websites, Source Books, Trade and Contract, and Outlets. The company encourages its customers to shop across its channels, which complement one another, and have aligned its business and internal organization to be channel agnostic.

Retail Locations

As of January 28, 2023, the company’s retail locations included RH Galleries and Waterworks Showrooms:

The company’s Galleries reinforce its luxury brand aesthetic and are highly differentiated from other home furnishings retailers. The company has revolutionized the customer experience by showcasing products in a sophisticated lifestyle setting, consistent with the imagery and product presentation featured on its websites and in its Source Books. Products in its Galleries are presented in fully appointed rooms, emphasizing collections over individual pieces. This presentation inspires the company’s customers to consider purchasing a full collection of products to replicate the design aesthetic experienced in its Galleries. In addition, the company’s associates use iPads and other devices to allow customers to shop its entire merchandise assortment while in a retail location.

Situating the company’s Galleries in desirable locations, such as iconic buildings and luxury retail shopping centers, is critical to the success of its business. New sites are identified based on a variety of store-specific factors – including unique architecture, geographic location, demographics, and proximity to affluent consumers – in addition to the company’s ability to negotiate favorable economic terms and to procure permits and complete construction in a timely manner. The company’s integrated RH hospitality experience, which includes Restaurants and Wine Bars, has created a unique new retail experience that cannot be replicated online, and that the addition of hospitality drives incremental sales of home furnishings in these Galleries. The company plans to incorporate hospitality into most of the new Galleries that it opens in the future.

The company plans to expand its product sales to additional international markets and has signed agreements for Design Galleries in several locations outside of North America, including the U.K., France, Germany, Spain, Italy and Belgium.

Websites

The company’s primary RH websites, www.rh.com, www.rhmodern.com, www.rhbabyandchild.com and www.rhteen.com, provide its customers with the ability to purchase its merchandise online. The company sells Waterworks products online through www.waterworks.com. The company’s websites allow its customers to experience the unique lifestyle settings reflected in its Source Books and throughout its Galleries and Showrooms, and to shop all of its current product assortment. The company updates its websites regularly to reflect new products, product availability and occasional special offers.

The RH websites also offer room-based navigation, which allows the customer to envision and shop items by room or by product, expanding on the richness of the online experience. Customers can search the websites for products by size or color, browse through the company’s extensive product categories and see detailed information about each item and collection, such as dimensions, materials and care instructions. Additionally, customers can select color swatches and view merchandise displayed with different color and fabric options.

Source Books

The company produces a series of catalogs, which it refers to as Source Books, to showcase its merchandise assortment. The company’s Source Books include RH Interiors, RH Modern, RH Outdoor, RH Baby & Child and TEEN, RH Beach House, RH Ski House and RH Rugs. Additionally, the company launched the RH Contemporary Source Book in fiscal 2022. The company’s Source Books are one of its primary branding and advertising vehicles. The company has found that merchandise assortments displayed in its Source Books contribute to increased sales of those products across all of its channels. As in its Galleries, the company’s Source Books present its merchandise in lifestyle settings that reflect its unique design aesthetic. The company’s Source Books also feature profiles of select artisan vendors and other compelling editorial content regarding home decor. A

The company’s Source Book mailings serve as a key driver of sales through both its retail locations and websites. The company’s customers respond to the Source Books across all of its channels, with sales trends closely correlating to the assortments that it emphasizes and features prominently in its Source Books, websites and Galleries. The company’s Source Books, in concert with its websites, are a cost-effective means to test new products, and allow it to launch categories in a disciplined, expeditious and cost-effective manner. The company continues to evaluate and optimizes its Source Book strategy based on its experience.

The company maintains a database of customer information, including information from its RH Members Program. The company’s customer database includes sales patterns, detailed purchasing information and certain demographic information, as well as mailing and email addresses. The company mails its Source Books to addresses within this database and to addresses provided to it by third parties. The database, which is maintained in accordance with the company’s privacy policy disclosed on its website, supports its ability to analyze its customers’ buying behaviors across sales channels, facilitates the development of targeted marketing strategies, and supports prospecting new customers. The company segments its customer files based on multiple variables, and it tailors its Source Book mailings and emails in response to the purchasing patterns and product needs of its customers. The company continues to improve the segmentation of customer files and the expansion of its customer database.

Trade and Contract

In the Trade channel, the company works directly with residential interior designers and decorators purchasing products for their clients’ residential projects. The company also sells directly to consumers who make purchases with the assistance of their residential interior designer or decorator. The company’s Contract business supplies products to large-scale, luxury hospitality, commercial and residential development projects globally, working directly with hotel ownership groups and brands, commercial property owners, single-family and multi-family builders and developers and their ecosystem of architecture, interior design and purchasing business partners. These channels enable the company to reach new business customers and the consumers they influence.

Outlet Stores

The company’s outlet stores are branded as RH Outlet or Restoration Hardware Outlet and are typically located in outlet malls. The company’s outlet stores serve as a key part of its reverse logistics platform and provides an efficient means to sell primarily returned merchandise and, to a lesser extent, discontinued and overstock merchandise outside of its core sales channels.

Marketing and Advertising

The company’s Galleries, websites and Source Books are the primary branding and advertising vehicles for the RH brand. In addition, the company employs a variety of marketing and advertising techniques to drive customer traffic across all its channels, strengthen and reinforce its brand image and acquire new customers. These include targeted Source Book circulation, email communications, promotional mailings, print advertisements, and public relations activities and events. The company uses its customer database to tailor its programs and increase the efficiency of its marketing and promotional initiatives. The company’s Source Books and targeted emails further reinforce the RH brand image and drive sales across all of its channels. The company also participates in a wide range of other marketing, promotional and public relations activities. These campaigns include media coverage in design, lifestyle, culture/society and specialty publications, as well as in-Gallery events related to new Gallery openings and product launches. In addition, the company engages in print advertising in brand-relevant publications, such as Architectural Digest, Elle Decor, T: The New York Times Style Magazine, WSJ. Magazine, Business of Home, Luxe Interiors + Designs, C Magazine and others.

RH Members Program

The RH Members Program reimagines and simplifies the shopping experience. For an annual fee, the RH Members Program provides a set discount every day across the RH brand, excluding RH Hospitality and Waterworks, in addition to other benefits, including complimentary design services through the RH Interior Design program and eligibility for preferred financing plans on the RH Credit Card. The RH Members Program allows the company’s customers to shop for what they want, when they want, and receive the greatest value, which has resulted in orders and sales being more evenly distributed throughout the year. The company’s core RH business reflects the product categories that the membership discount can be applied to, and, as a result, sales generated via Outlet, Contract, Hospitality or Waterworks are excluded.

Distribution and Delivery

The company manages the distribution and delivery of its products through its distribution centers. The company operates three furniture fulfillment centers and one small-parcel fulfillment center servicing RH products, which are located strategically in four markets throughout the United States. The company has one fulfillment center in the United States servicing Waterworks products.

The company operates portions of its home delivery services in 21 key markets to leverage operating costs and improve its customers’ delivery experience, while reducing returns and damage to its products. The company offers a white glove home delivery service for its larger merchandise and furniture categories, where third-party personnel deliver fully assembled items to the location of its customers’ choice.

In addition, the company has one third-party distribution center in Europe and continue to develop its supply chain strategy in connection with its global expansion.

Intellectual Property

The RH, Restoration Hardware, RH Interiors, RH Contemporary, RH Modern, RH Outdoor, RH Baby & Child, RH TEEN, RH Beach House, RH Ski House, RH Guesthouse, RH Rugs, The World of RH and Waterworks, trademarks, among others, are registered or are the subject of pending trademark applications with the United States Patent and Trademark Office and with the trademark registries of several foreign countries. Each of its trademark registrations is perpetually renewable provided that the company uses or continues to use the trademarks in commerce in the particular geographic market and for the goods or services covered by the registration. In addition, the company owns many domain names, including rh.com, restorationhardware.com, rhmodern.com, rhbabyandchild.com, rhteen.com, rhbeachouse.com, rhskihouse.com, rhguesthouse.com, waterworks.com and others that include its trademarks. These domain names are perpetually renewable. The company owns design patents or pending design patent applications to protect the ornamental appearance of several of its products. These design patents are valid for 15 years from their date of issuance. The company owns copyrights, including copyright registrations or pending applications, for its website.

History

The company, a Delaware corporation, was founded in 2011. It was incorporated in 2011. The company was formerly known as Restoration Hardware Holdings, Inc. and changed its name to RH in 2017.