RH galleries generating up to $1,200/sq. ft.
Staff Staff -- Furniture Today, September 11, 2013
Corte Madera, Calif. - Restoration Hardware's five full-line design galleries are exceeding expectations, executives said during the company's second quarter conference call late yesterday.
Same-store sales at the Los Angeles and Houston stores jumped more than 28% during the quarter, besting their peers, and churned more than $300 per selling square foot in 2013, according to Carlos Alberini, co-ceo. The Scottsdale unit is on track to deliver annual sales per selling square foot of over $1,200, also ahead of expectations. The company's newest galleries, located in Boston and Indianapolis, are expected to deliver nearly $1,000 in annual sales per selling square foot, he said.
"All these markets have experienced a lift in direct demand [i.e., interet and catalog orders] anywhere in the range of 30% to 120% since opening," added Alberini.
In 2014, RH plans to open additional full-line gallery stores in Greenwich, Conn., and Los Angeles and plans to expand its Flatiron District store in New York.
Alberini said RH will open "next generation" galleries in Atlanta and Chicago next year sized at 65,000-sq.-ft. and 55,000-sq.-ft, respectively. The larger stores will carry a larger array of RH's core assortment, as well as its small spaces collection, Baby & Child and "the future new businesses that we are planning."
The company believes it can operate gallery stores in some 50 markets in the U.S. and Canada, he said.
But as the company continue to invest it both its retail operations and new ventures into artwork and music, costs have been escalating, outstripping strong sales growth.
For the quarter ended Aug. 3, the company showed a net loss of $17.8 million. Adjusted net income climbed 62% to $19.8 million.
Sales rose 30% to $382.1 million, with comp up 26%.
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