- June 11, 2021
- Posted by: Stratford Team
- Category: Business
In his letter to stakeholders accompanying the company’s first-quarter results, RH Chief Executive Gary Friedman explained some of the attributes of the company’s business model.
Friedman says RH has become a “luxury brand generating luxury margins” for a few reasons, including its 2016 move to a membership model, its luxury positioning, which makes it less vulnerable to economic downturns, and its calendar-agnostic inventory.
“We don’t offer seasonal categories like Valentine’s Day, Easter, Halloween, Thanksgiving or Christmas,” the letter said.
“Nor do we carry collections or color palettes tied to spring, summer, fall or winter like many home furnishings or home improvement retailers. We spent years eliminating those categories to avoid seasonal markdowns, enabling us to have a significantly higher margin business.”
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