RH Revving Up In-House Capabilities

Like many other retailers catering to the luxury market, RH has experienced major challenges over the past year or so. As a result, in its fiscal first quarter end May 2, the California-based company took a $45 million hit stemming mainly tariff-related delays. The result: its net 1Q revenues fell by 1.7%, to $800.3 million, and it experienced a net loss of $13.7 million.

But Gary Friedman, Chairman and CEO of RH, which sells high-end indoor and outdoor furniture, lighting, textiles, bathware and décor, notes that those figures nonetheless exceeded analysts’ expectations and that the company “expects a similar elevated balance in Q2, with balances returning to normalized levels by the end of 2026, resulting in a revenue pick up of approximately $75 million in the second half of this year.”

Under Friedman’s guidance, the company once known as Restoration Hardware has spent the past several years opening opulent new stores, including such high-profile European cities as London, Milan and Paris. Now, he says RH will turn its attention to beefing up its in-house services via the launch of RH Estates, RH Bespoke Furniture and RH Couture Upholstery.

“With RH Bespoke, we are offering a level of customization never seen before at scale, Friedman wrote in his letter to shareholders about the 1Q results. “Interior designers and architects can now specify dimensions for dressers, dining tables, sideboards, and cabinets to fit the exact proportions of their architectural canvas.

“Simultaneously, RH Couture Upholstery will redefine the boundaries by integrating custom sizing with COM into the RH ecosystem. We are giving designers the creative freedom to specify custom sizes and fabrics for sofas, sectionals, chairs, ottomans and beds. You source the fabric from anywhere in the world; we provide atelier level construction and craftsmanship.”

Never one for the understatement, Friedman frames what his firm is up to with a historical analogy: “Nearly forty years ago, standing at the Brandenburg Gate [in Berlin], a former American president looked out at a divided world and issued a defiant, historic decree: ‘Mr. Gorbachev, tear down this wall.’ Today, we look at the luxury home industry and ask the same.

“With the launch of RH Estates, we are removing the barriers that have segregated taste from scale. We are amplifying the work of the world’s most elite designers, artisans and manufactures on our global platform. This is not a compromise of quality; it is a liberation of mastery. By uniting these legendary ateliers and elevating their work in architecturally significant spaces, we are providing access to some of the most beautifully designed, highest quality classic, contemporary and modern furniture in the world.”

Click here to read Friedman’s letter in its entirety.