HR CEO Gary Friedman told CNBC on Thursday that he is confident of the company’s expansion vision, even if some may question the luxury furniture retailer’s moves to the European market or new industries.
“It takes a long time to build something extraordinary in this world, and we still feel warm, honestly,” Friedman said in an interview with Jim Cramer on “Mad Money.” “We are more excited than we have ever been and we see more opportunities than we have ever seen.”
RH, formerly known as Restoration Hardware, plans to open stores in England and Paris next year as part of the company’s international expansion in California.
The company is also moving towards hospitality – it already operates restaurants – with the debut of its RH Guesthouse concept in New York. It will open this fall, followed by an RH boarding school in Aspen, Colorado, next year. Friedman rejects their labeling as hotels, saying RH is trying to “create a new market for privacy and luxury.”
In Aspen, HR also has plans to develop homes in what it calls its first “HR ecosystem”.
“Many of the things we will do will initially be misunderstood. And until they are seen and respected … then you can’t ignore it,” Friedman said.
Friedman is confident in the company’s ability to succeed in Europe, highlighting RH’s experience in sourcing products from the region, along with its position as the world’s top seller of Italian and Belgian bedding.
Friedman acknowledged that, on the surface, HR’s foray into new industries, such as residential real estate, may seem strange to a company traditionally considered a retailer. “But if you’re trying to build one of the most admired brands in the world, if you want to do something extraordinary, you can’t take an ordinary path,” he said.
Friedman’s appearance on “Mad Money” on Thursday came a day after RH posted revenue and earnings in the fourth quarter that exceeded analysts’ expectations. RH ended fiscal year 2020 with sales of $ 2.85 billion. In a letter to shareholders, Friedman wrote that RH believes that “the data claims that the RH brand reaches $ 5-6 billion in North America and $ 20-25 billion globally.”
RH shares rose 9% in Thursday’s session, closing at $ 529.08 a piece. The stock has grown by almost 400% in the last 12 months.