EXPERT PERSPECTIVE

RH: Presenting the art of retail restoration and elevation

Karl McKeever visits San Francisco and the recently opened RH Gallery. He explores the remarkable RH transformation, what lies in store for UK shoppers, eagerly awaiting the opening of the American luxury brand’s first European outpost in Oxfordshire this summer, and many notable things which other retailers should take note of.

By Karl McKeever
Posted 23.06.2022

This summer, the first European outpost of American luxury brand RH (formerly known as Restoration Hardware) will open as RH England in scenic rural Oxfordshire. RH will take up residence at Aynhoe Park. The family home of James and Sophie Perkins and their children, Aynhoe Park is a smart 73-acre historic estate designed in 1615 by Sir John Soane, arguably one of the most respected and celebrated architects of his time.

Representing a very big bet on the brand’s ability to stretch over continents and create a whole new UK following, RH England will feature The Aynhoe Architectural Library, The Aynhoe Organic Gardens, The RH Restaurant & Orangery, and The RH Champagne & Caviar Cellar among other unique experiences.

The location choice for the new Oxfordshire RH Gallery is bold. Its North American Galleries are conveniently sited in ‘off pitch’ areas, within a short travelling distance for a massive catchment of affluent consumers. Aynhoe Park is not. That will present a different challenge for RH if it is to attract visitors.

Whilst close to the M40 for London and southbound travellers, for those further afield, this will be a good ‘half day’ drive. Certainly, the spectacle that awaits will make this trip a must-do for many. But will the remote country location simply encourage day tripping curiosity seekers, rather than well-healed brand devotees – and customers?

With inevitable positive reviews in Sunday newspapers and UK interiors magazines, there’s little doubt that RH will be satisfied with their big gamble and foray into the staid and somewhat formulaic UK interiors market when RH England officially opens.

The brand is confident that it has found the formula for accelerated global expansion. A further ten European RH Galleries are also planned, starting with France and Germany.

So, last month I travelled to San Francisco to tour the recently opened RH Gallery for a flavour of what we could expect when RH England opens.

For those unfamiliar with the concept, this is a hyper luxury homewares and exclusive hospitality concept, born out of what was originally just a niche homewares retailer with smart but generally unremarkable downtown/mall stores.

Replacing an earlier, smaller store within the city’s design district, the new RH Gallery in San Francisco is a 80,000-Square-Foot Landmark Building restored and reimagined as a unique retail and dining destination. It is one of a range of new locations where the brand has looked outside of traditional retail sites to redevelop historic architecture, and on a grand scale.

Inside, the new ‘store’ features The Palm Court Restaurant & Wine Bar, a rooftop terrace with spectacular views of the San Francisco skyline, bay and Bay Bridge, an in-house interior design service, five full floors of RH interior collections: Modern, Outdoor, and the brand’s soon to unveiled, and eagerly awaited, collection – RH Contemporary.

RH Gallery resides confidently in a former naval industrial neighbourhood. An area that has seen better days but currently undergoing massive redevelopment, attracting huge corporate and private investment. Originally constructed in 1917, the landmark Bethlehem Steel building was designed in the Classical Revival style by preeminent San Francisco architect Frederick H. Meyer. Now it has been meticulously and lavishly restored by RH, with respect for its original vision. 

The immediate area outside presents a huge contrast to what’s found within. Something that will surely change over time. Until then, it’s a symbol of RH’s willingness to be an early pioneer for the area’s future potential and profile.

The experience begins with an exceptional welcome and superior guest facilities that include valet parking, a uniformed doorman, a concierge desk, and coat check. Inside, a grand lobby and magnificent stairway set expectations for the brand experience to follow.

The effect is opulent, refined and calm, like found in a 7* hotel or luxury beach resort. The pace and ambience reverential and museum like, with a just a hint of stiff excitement hanging in the air-cooled interior. For unfamiliar first-time shoppers some will think ‘should I be here?’ – the whole effect creating subconscious personal status checking. But be in no doubt: you have arrived.

Over beautifully restored and decorated floors, RH Interiors collections are styled with expert attention to detail. RH quotes the following design ethos, ‘rooted in the Vitruvian principles of balance, symmetry, and proportion. A study in human design and elegant restraint’. This is evident in every corner of the space, with the sharpest of aesthetic decisions creating a picture perfect setting for every piece. It’s completed with the terrace garden—a beautiful rooftop, outdoor space, providing the perfect setting to present outdoor furniture collections. This oasis of tranquillity let you relax on RH furniture, whilst admiring the spectacular views of the San Francisco skyline and bay.

As a store, it is mouthwateringly good. To describe it as lavish doesn’t even do it justice. It is typical for would-be shoppers to wander around the store with flutes of champagne with their interior designer, picking out items and creating mood board selections for hours at a time. Meanwhile, RH Ambassadors are discreetly on hand to host, support and facilitate purchase, with the emphasis placed on brand experience and gracious reassurance. Around two thirds of the buyers are Interior Designers who enjoy concierge-like serviceability to present, design, and sell in a bespoke way to customers. The In-House Atelier design firm catering for all needs.

Hospitality is also a massive revenue stream for the business with exclusive restaurants and bars a feature in every RH Gallery. Getting a table here is a ‘hot ticket’ and the place to be seen.

There are many notable things about the transformation of RH which other retailers should take note.

First, the property choices could be termed ‘risky’. But they are unquestionably dramatic, and highly visible. Taking ‘faded glory’ local landmarks in non-retail settings, the properties are chosen for their potential to sparkle when fully restored. Spaces offering the ability to present something remarkable, at impressive scale and unlike any traditional retail offering.

Next is the decision to develop and offer its ‘Members Program’ or, a subscription model. For a $175 annually, RH Guests can sign up for membership and get 25% discount on all purchases, an additional 20% savings on all sale items, complimentary services with RH Interior Design, and preferred financing with the RH credit card. Enticing!

On promotional activity, the new RH also takes a distinctive and industry defying stance. It does not participate in seasonal event-based promotions, and discounts with only ‘limited time’ sales online. The new RH does not offer seasonal décor and gift lines, maintaining a strict focus on its core product proposition. Such familiar tactics have been used by other furniture businesses for years. But these distract, damage price integrity, and undermine price confidence with consumers. Each reducing brand equity and the potential for full price sales.

Unlike many retailers, that have jumped onto social media to raise brand profile, develop consumer conversations and wider promotion activity – the new RH does not. The brand appears ‘purposefully against’ online social and community building, believing the company should be getting other people to talk about it, rather than talking about themselves.

These ‘radical’ differences in approach, and others like them, have helped turn RH into a financial powerhouse. The decisions are strategic and part of how the new RH has transitioned into how it now perceives and promotes itself– as a modern, luxury lifestyle brand.

2021 was another year of record results for RH with net revenues increasing 32% to $3.759 billion. Chairman & Chief Executive Officer, Gary Friedman wrote in the annual Letter to Shareholders “Our performance demonstrates the desirability of our elevated and exclusive product, the connective power of our evolving ecosystem, the profitability of our fully integrated business model and the strategic separation created by our inspiring physical spaces”. Their new strategy is working.

Experiencing RH is unlike anything else. It does not seek to define its existence, as such. Is it a hotel, a club, a well-connected meeting place? Is it a dream? RH is certainly not anything like a shopper’s typical experience of a furniture store. This is theatre. This is opulence. This is the physical, magnificent reality of an exquisite, fabulous lifestyle. This is RH.

RH is on a focused mission to transform itself from simply being a retailer, into becoming a ‘luxury brand’. It’s a metamorphosis that’s been both remarkable and inspiring to watch – re-imagining and re-orientating, breaking away from established industry practices, and elevating itself with a standard retail execution that goes way beyond anything seen before. This is not just disruptive, but ‘category defining’, and brand case study making.

In doing what it is doing, RH is creating a unique luxury proposition and elevated market position. More importantly perhaps, it has afforded itself space to grow the RH brand into exciting new experiences and revenue areas for the future, including travel, luxury hotels and resorts. The company has recently launched RH 1, 2 and 3 – exclusive, luxury appointed private jets and yachts available for private charter. Each fitted out in the brand’s signature style and quality.

This comes at a time when many retailers are stuck in a bind about which way to move and questioning how they can grow. With increasing pressures on consumers and rising costs of trading, there’s a real sense of nervousness for risk taking development in retail, while the relative ease and reward of ecommerce makes a persuasive case to prioritise new investment in digital rather than the physical.

In the USA, RH have demonstrated how a fundamental business rethink, combined with strong brand vision and purpose, new investment, plus a healthy shot of confidence, can really pay off. It’s a message some UK retailers are also waking up to.

Far from giving up, this is the time for retailers and brands to get busy… it is a time to reinvent, a time to reinvest in stores, and to create remarkable brand experiences that disrupt and wrench shoppers from being online. In a land of pioneers where “fortune favours the brave”, it’s a message RH have taken to heart and actively built into their business. Future thinking. Future proofing. Future view.

If you’d like to find out more about RH in San Francisco, or other RH stores – drop us a message. We can share images and insights that could help your brand transformation journey. We’ll also be offering guided trips around the new RH England, in Oxfordshire, for anyone who wants to sip champagne and chat about retail transformation strategy.

Cheers to that.