From Home Furnishing Business
Restoration Hardware Shifts Focus to Large Format Stores
Restoration Hardware has made the strategic decision to focus on larger format stores as part of its ongoing transformation.
The home furnishings retailer released is first quarter earnings Wednesday afternoon. Gary Friedman, CEO, said in a conference call that the shift to larger stores and away from smaller footprints was an effort to become a more dominant force in its markets.
"We're positioning ourselves as a next generation anchor tenant," he said, adding that stores would range from 25,000 to 60,000 square feet.
The retailer recently opened a complete Design Gallery in Greenwich, Conn., and has plans to open large format stores in Los Angeles and Atlanta later this year. The company has signed leases for six other stores and is negotiating leases for more than 25 other locations.
The company is also expanding the size of its New York Gallery—the top-performing location in the chain—by adding two floors.
"Once our real estate transformation is complete in North America, we believe we will deliver $4 billion to $5 billion in annual sales, achieve mid-teens operating margins and generate significant free cash flow," Friedman said.
For the first quarter, the furniture retailer reported net sales of $366.3 million for the first quarter ended May 3, a 22 percent leap from $301.3 million in the first quarter last year.
Adjusted net income for the first quarter increased 217 percent to $7.2 million from $2.3 million. The adjusted total excludes the impact of non-recurring and other items.
The complete earnings release is available on the Restoration Hardware Web site.