Restoration Hardware puts the push on direct biz
Staff Staff -- Furniture Today, April 5, 2007
Corte Madera,Calif.– Restoration Hardware plans to focus outside of the box – literally. The retailer told analysts late yesterday that it will put store expansion on hold for at least two years while it drives direct-to-consumer sales and expands its brand portfolio.
By the end of three years, more than half the company’s sales should be generated by catalog and internet transactions, according to Gary Friedman, chairman, president and ceo.
The direct approach allows the company to broaden sku offers beyond merchandise carried by its 103 stores. “Our business is primarily about selling more [goods] to our best customers, not necessarily exponentially growing the customer base, though we’d like to grow that, too,” he said.
This month brings the debut of another new Restoration-branded catalog: bed and bath. Last year, Restoration launched an outdoor catalog and Brocade, a book of interior home furnishings (including textiles). Next year, the company said, it will launch a kids home furnishings book.
Fourth-quarter sales, reported yesterday, rose 27% to $243 million. Direct-to-consumer jumped 59%, with store comps climbed 9.1%
Operating income rose to $15.7 million, up 9%. EBITDA (earnings before interest, taxes, depreciation and amortization) were $21.4 million, up 8.6%. Net income per fully diluted share was 34 cents, compared to a net loss of 53 cents in the previous year’s fourth quarter.
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