RH CEO Gary Friedman told CNBC on Thursday that he was confident in the company’s expansion vision, even if some may question the luxury furniture dealer’s moves in the European market or in new industries.
“It takes a long time to build something extraordinary in this world, and we still feel like we’re heating up, frankly,” Friedman said in an interview with Jim Cramer about “Mad Money.” “We’re more excited than we’ve ever been and we’re seeing more opportunities than we’ve ever seen.”
Formerly known as Restoration Hardware, RH plans to open stores in England and Paris next year as part of the California-based company’s international expansion.
The company is also moving into the hospitality industry – it already operates restaurants – with the debut of its RH Guesthouse concept in New York City. It will open this fall, followed by a RH Guesthouse in Aspen, Colorado, next year. Friedman rejects labeling them as hotels, saying RH is trying to “create a new market for privacy and luxury.”
In Aspen, RH also has plans to develop homes in what it calls its first “RH ecosystem”.
“A lot of the things we’re going to do will just be misunderstood at first. And until they’re seen and respected… then you can’t ignore them,” Friedman said.
Friedman is confident in the company’s ability to be successful in Europe, highlighting RH’s experience sourcing products from the region, along with its position as the top Italian bedding and Belgian linen sellers in the world.
Friedman acknowledged that at first glance, RH’s foray into new industries like residential real estate may seem strange to a company traditionally viewed as 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 go down an ordinary road,” he said.
Friedman’s performance Thursday on “Mad Money” came a day after RH posted fourth-quarter earnings and earnings that exceed analyst expectations. RH closed fiscal year 2020 with sales of $ 2.85 billion. In a letter to shareholders, Friedman wrote that RH believes the “data supports the RH brand reaching $ 5 to $ 6 billion in North America and $ 20 to $ 25 billion worldwide.”
RH shares were up 9% during Thursday’s session, closing at $ 529.08 each. The stock is up nearly 400% in the past 12 months.