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From Home Furnishing Business

Restoration Revamps Retail Strategy

By Home Furnishings Business in Retail Technology on April 2007 Restoration Hardware executives have decided to shift the retailer€™s strategy to focus on online and catalog business for future growth.

During a conference call Wednesday afternoon in which the company reported its year-end results, the company said it will shift the focus from retail sales to direct sales this year. The Corte Madera, Calif., retailer€™s direct sales, which include online and catalog sales, were $244 million, or 34 percent of the company€™s total revenue.

The retailer announced a $13.6 million profit for the fourth quarter ended Feb. 3, compared with a loss of $19.5 million during the same quarter last year. Sales for the quarter were $243 million, compared with sales of $191 million a year ago.

For the year ended Feb. 3, the company reported profit of $3.2 million on sales of $712.8 million. In the previous year, ended Jan. 28, 2006, the retailer lost $29.3 million on sales of $581.7 million.

Gary Friedman, chief executive officer said the company has no plans to open new stores this year and that the direct business will become the majority of the retailer€™s business in the next three years.

Other strategies for this year include a new Bed & Bath catalog and a division to serve hoteliers, builders and the hospitality industry.

Next year, the company will introduce Restoration Hardware Kids focusing on a premium line of children€™s home furnishings. The catalog and Web site are set to debut in the spring of 2008.

In addition, Friedman said the company continues to build its fashion home brand, Brocade Home, which was introduced last fall. The company recently introduced an e-commerce site at brocadehome.com.

Friedman said it would stop reporting same-store sales because they no longer will be an accurate measure of business because of the new focus on the direct channel.


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