Gary Friedman hates conferences. A 66-year-old with apparently limitless vitality and a perpetual tan, Mr. Friedman is the chief govt of RH, one of many nation’s largest high-end furnishings sellers, and he by no means holds conferences. As an alternative, he convenes “adventures.”
To the untrained eye, these look and sound so much like conferences. However there’s a distinction. Adventures can final 10 hours, or extra.
That’s a typical stretch for Mr. Friedman’s adventures together with his structure and design group, a gaggle of about 20 executives overseeing one of many priciest expansions within the historical past of American retail. The corporate is doubling the variety of shops, referred to as “galleries” in RH converse, with 35 new ones within the works. Many will price $20 million or extra.
RH offered $3 billion value of merchandise final 12 months, however Mr. Friedman’s aim isn’t just to maneuver $10,000 sectional sofas, most of them in earth tones and a method that could possibly be referred to as California Wealthy. He desires to forge a model that’s so ubiquitous — RH eating places, RH resorts, RH clothes — that its affect is world.
“I don’t actually discuss our imaginative and prescient for the corporate to Wall Avenue as a result of they may lock me up,” Mr. Friedman stated one latest afternoon, sitting in an RH restaurant not removed from headquarters in a suburb of San Francisco. “However our imaginative and prescient is to create an limitless reflection of hope, inspiration and love that can ignite the human spirit and alter the world.”
If this sounds a tad grandiose for a man peddling sideboards and occasional tables, you haven’t hung out with Gary Friedman. He’s not a traditional businessman. He’s extra just like the extremely demanding head of a home-furnishings-based cult, full with its personal Bible (these 350-page shiny catalogs that flip up in your mailbox), terminology (“adventures,” “galleries,” “RH guidelines”) and catechism (“This isn’t our job, that is our life,” reads one of many RH guidelines). Complete dedication is required of underlings. Something much less can carry scolding rebukes.
Mr. Friedman grew to become the chief govt of what was then referred to as Restoration {Hardware} in 2001, when it was a virtually bankrupt vendor of midpriced furnishings and Americana-themed tchotchkes, like Slinkys and Moon Pies. By driving the model to “climb the luxurious mountain,” as he places it, he made it a spot the place aspirational consumers may attain for furnishings a bit of exterior their price range. In the course of the pandemic-era renovation craze, the corporate was value $15.5 billion.
However RH is now struggling by a grinding downturn, its market worth off 70 p.c since its 2021 peak. Practically each participant within the furnishings enterprise is slumping, largely as a result of the good engine of gross sales — new residence purchases — has stalled. Whereas rivals pull again, or lean into on-line gross sales, Mr. Friedman is within the midst of a dangerous, full-tilt constructing spree. Together with these immense and stately shops, he’s galloping into the true property enterprise, planning furnished flats and homes in locations like Aspen and Napa.
The purpose for Mr. Friedman, an inveterate optimist, is to arrange for the growth that he believes will ensue when rates of interest go down. He additionally desires to broaden RH’s attraction past the upwardly cellular who at the moment are its core prospects and pitch the model to the ultrarich. Therefore extra RH eating places, with principal programs that embrace such decadence-signaling dishes as a $125 grilled Wagyu rib-eye steak.
And as if to show that his ambitions are actually Napoleonic, the corporate is now invading Europe. Final 12 months it unveiled its first retailer in Britain, a renovated 400-year-old, Downton Abbey-like manse in Oxfordshire, with eating places, a tea salon, a wine lounge and what seems to be a taxidermy unicorn. Up subsequent are shops in Madrid, Milan, London and Paris.
“Gary is a superb man, however his ambitions have run away with him,” stated Pamela Danziger, the founding father of Unity Advertising and marketing, a market analysis agency. “To open in England, France and all these different locations — I believe he’s simply put manner an excessive amount of in entrance of him. As a result of he’s bought issues now within the U.S. market, and that’s the place he must put his horsepower.”
Mr. Friedman relishes nothing fairly a lot because the suggestion that he’s overreaching. He made this level, and plenty of others, in our interview, which became a nine-hour journey. A largely uninterrupted monologue, it began at lunch in a single RH restaurant, ended over dinner at one other and lined the story of his life, which started in San Francisco, the place he was raised by a widowed mom who struggled with psychological sickness.
At the moment, his web value is $1.5 billion, in line with a Forbes estimate. Final 12 months, he purchased a $26.7 million oceanfront home in Malibu, Calif., and some months later purchased a second home on the identical seashore for $28.5 million. His marriage to an Australian singer was celebrated with 272 company over 4 days final summer time on the Mediterranean island of Ibiza.
Like his idol, Ralph Lauren, he’s the strolling, speaking embodiment of his model, which in his case means dressing like one in all his sofas, in muted tones and expensive materials. He has an improbably easy face and dramatically upswept hair that’s graying on the edges. He’s a fan of Brunello Cucinelli clothes and wears a wristlet engraved with “Imagine” — Italian sensible informal meets New Age.
Mr. Friedman’s journey from a childhood of meals stamps to stratospheric wealth has left him with a finely tuned understanding of the dynamics of striving. It additionally left him with a little bit of a chip on his shoulder. His shareholder letters could possibly be referred to as “Notes From an Underdog,” stuffed as they’re with triumphalist musings in regards to the joys of ignoring his doubters.
“We averted chapter whereas being accused of lunacy,” he wrote in a letter final 12 months. “Quickly the world might be inside our attain.”
The Complete Pampering Resolution
Few firms are higher at exploiting the American obsession with affluence than RH. It sells the form of smooth, oversize furnishings seen on tv reveals like “Succession” and does it by a singular form of experiential purchasing. With their hovering ceilings and Zen atmosphere, RH showrooms are a daydreamer’s fantasy of a billionaire’s residence.
Possibly you’re not a hedge fund skilled, the décor says, however you should buy a hedge fund skilled’s drapes.
“Gary discovered a distinct segment that no person had exploited within the residence furnishings area,” stated Warren Shoulberg, a former editor of House Furnishings Information, a commerce publication. “The wannabe wealthy.”
The twist, retail advertising consultants say, is that RH shouldn’t be truly a luxurious model. Within the trade argot, it’s premium, which implies it’s costlier than rivals like Crate & Barrel and West Elm however lower than the bespoke choices offered in designer showrooms the place solely inside decorators can purchase. These showrooms are full of handmade furnishings, lighting and rugs from Italy, France and home hubs like North Carolina. They price extra, last more and maintain extra of their resale worth. Against this, RH furnishings is basically mass-produced in international locations resembling China, Vietnam and Indonesia.
“Most individuals within the design trade have a look at RH as fancier West Elm,” stated Jason Campbell, an inside designer in Manhattan. “Nevertheless it’s nonetheless fairly costly. I regarded for a sectional couch for a shopper lately and was shocked to see one from RH for $14,000. You may purchase one thing comparable at a designer showroom for a smidgen extra, and it wouldn’t be made in China.”
That is the RH technique: Promote a premium product in a setting so dazzling that it appears value near-luxury costs.
The corporate has zero presence on social media for roughly the identical cause {that a} hip bar doesn’t have a door signal. (“There’s no college for cool” is one in all RH’s official ideas.) Nonetheless, unbidden and unpaid endorsements are usually offered by celebrities, together with Kerry Washington and Kendall Jenner, who’ve raved in interviews in regards to the Cloud Couch, an RH staple that at present begins at about $4,800.
RH is continually in search of novel methods to construct mystique. The corporate’s web site doesn’t publish images of the rooms in its first resort, in Manhattan’s meatpacking district, the place rooms begin at $2,200 an evening. And the one approach to e book a keep is to inquire by way of e mail. On a latest tour, a supervisor confirmed off the minibars, which function crudités, an assortment of sliced meat and a contemporary baguette that’s changed each two hours.
Far pricier RH productions are within the works. Its plans in Aspen embrace branded resorts and RH Residences, the corporate’s first foray into totally furnished stand-alone homes.
“We’d promote these properties, however we might additionally handle these properties,” Mr. Friedman stated. RH would assist lease the homes when consumers weren’t utilizing them, and pocket half the rental revenue.
That is the place the true scale of Mr. Friedman’s drive comes into focus. He’s eyeing the multitrillion-dollar market in luxurious turnkey properties and condominiums around the globe. RH want seize solely a tiny slice of that and its worth will soar, he stated, to $70 billion or extra.
Analysts are skeptical. “It’s extraordinarily unlikely that RH will ever get a cloth share of this market,” Seth Basham of Wedbush Securities stated. “Gary’s a giant dreamer.”
RH has taken on a major quantity of debt, leaving it with little margin for error, Mr. Basham added. Three years in the past, the corporate took out a $2 billion mortgage and used it to purchase again its personal shares. “We’re betting on ourselves and our future,” Mr. Friedman stated.
If gross sales fall and spending continues, Mr. Basham stated, the corporate’s future may begin wanting dicey. However Mr. Friedman has by no means shied away from danger, and he can’t cease barreling into all types of recent ventures. It’s an impulse that has yielded some memorable flops.
Like RH Modern Artwork. In 2013, the corporate leased a 28,000-square-foot area within the Chelsea neighborhood of Manhattan and recruited a roster of artists. Artnet referred to as it “one of many extra curious incursions into the artwork sphere” when it closed about two years later.
“Robust enterprise mannequin,” Mr. Friedman stated in our interview. “You’ve bought this great point, however you’ll be able to solely promote one in all them.”
‘Love Us or Depart Us’
Mr. Friedman takes a marathoner’s method to work, and he expects colleagues to match his stamina.
“He’ll meet me at 1 a.m. at one in all our factories in Vietnam,” stated Nicholas Condos, whose furnishings firm, Harbour, has offered greater than a dozen collections by RH. “And he’ll wish to work till 5 a.m. Nobody is prepared to say, ‘Can we go residence?’”
Veterans of the corporate say they shortly undertake a brand new sense of what hard-core dedication means. Eri Chaya, who’s RH’s chief artistic and merchandising officer, figured this out at her job interview with Mr. Friedman in 2006. The dialogue lasted three hours and included this stunning query: What are you prepared to struggle and die for?
“I had a sense once I first met him,” Ms. Chaya stated, “that it is a human like no different.”
For years, the annual management assembly included a ceremony whereby executives signed a contract affirming such sentiments as “I’ll repeatedly destroy my very own actuality to create tomorrow’s future for myself and my teammates,” then described methods they may have fallen quick.
That ceremony has been changed by the Each day Values Journey. It begins at 10 a.m. each day and is formed by matter sentences resembling “Share a time when your ego bought in the best way of discovering a greater manner.”
Amongst some executives, Mr. Friedman’s nickname is “The Solar” — an individual who provides off a heat glow on good days and burns you on dangerous ones. The corporate’s office tradition earned a D-minus from Comparably, which collects nameless scores from present workers. Simply 22 p.c of respondents stated they’d suggest the corporate to a pal; 67 p.c stated they’d not, inserting it within the backside 10 p.c of firms of comparable dimension.
Mr. Friedman is unbothered by this type of suggestions. The maxims he wrote for the corporate embrace “Love us or depart us.” Loads of individuals, he famous, stick round for years, and others who’ve give up later returned, having discovered life elsewhere a bit of uninteresting.
When underlings have come up quick, he has been recognized to lash out, a bent he claims to dislike and candidly acknowledges.
“Usually, I don’t yell at individuals — I yell on the drawback,” he stated. “For those who step in entrance of the issue and defend the issue, you may really feel attacked.”
‘Gary Hole’
By his personal account, Mr. Friedman is an unlikely arbiter of high-end residence furnishings style as a result of he grew up with out furnishings.
Mr. Friedman’s father was a onetime service provider marine and barber who died of a coronary heart assault when Mr. Friedman was 5. His mom, now deceased, struggled with schizophrenia and bipolar dysfunction, Mr. Friedman stated, and was usually unable to work. He stated the pair had lived in additional than a dozen tiny flats by the point he was 16.
“Our prized possession was a bit of black-and-white TV with huge bunny ears,” he stated. “It’s the one factor that at all times went with us.”
At 18, he enrolled at Santa Rosa Junior Faculty and flailed badly sufficient in his first 12 months {that a} counselor instructed him that he was losing taxpayer cash. He dropped out and have become a full-timer at a Hole retailer the place he was so dutiful and keen as a inventory boy that colleagues referred to as him “Gary Hole.” On days off, he usually drove an hour and a half to the company headquarters in San Bruno, Calif., to fold shirts and sweep the ground at a small showroom referred to as Retailer One.
He was there at some point in 1983 when Mickey Drexler, who was the Hole’s president, gave an impromptu speech within the lunchroom. Mr. Drexler requested the roughly 200 assembled workers a query, and Mr. Friedman blurted out the reply.
“For the lifetime of me, I can’t keep in mind what he requested, however the spirit moved me,” Mr. Friedman stated. “And Mickey stated: ‘That’s proper. That’s precisely proper.’”
Mr. Drexler requested for this chipper younger man’s identify and job title, and the subsequent day his secretary referred to as to ask Mr. Friedman to a C-suite assembly. Mr. Friedman arrived at headquarters 45 minutes early sporting a freshly steamed white shirt. In a wood-paneled room full of the corporate’s high executives, Mr. Drexler gave his new cost an project.
“I needed an goal particular person’s expertise with actual prospects,” recalled Mr. Drexler, who as we speak is chief govt of Alex Mill, a vogue model began by his son. “So I stated, ‘I would like you to be the suggestions particular person on these govt conferences.’ He had good vitality, I felt the vitality and I appreciated him.”
Mr. Friedman grew to become, at 25, the youngest regional supervisor on the Hole and was later recruited by Williams-Sonoma as a senior vp of shops and operations.
He soared at Williams-Sonoma. Throughout his years as president of Pottery Barn, a Williams-Sonoma subsidiary, the corporate grew from a $50 million-a-year operation targeted on tableware and kitchen equipment to a greater than $1 billion-a-year vendor of residence furnishings.
However 13 years into his run, Mr. Friedman, then 43, was handed over for the job of chief govt. “It broke my coronary heart,” he stated.
In a matter of days, he joined Restoration {Hardware} as chief govt, and helped increase a badly wanted infusion of $15 million from buyers, together with practically $5 million of his personal cash. On the time, Restoration was a publicly traded firm that was flirting with chapter. Quickly, Mr. Friedman was phasing out the classic staplers and phasing within the upscale daybeds.
“He at all times had a really clear standpoint,” stated Bonnie Orofino, who joined Restoration {Hardware} the 12 months earlier than Mr. Friedman and stayed on till 2016 as chief merchandising officer. “We spent a whole lot of time speaking about ‘the white area’ — one thing above Pottery Barn however beneath skilled designers.”
For years, the corporate tottered near monetary peril and went personal in 2008. 4 years later, it went public once more, an occasion that overlapped with a public relations catastrophe. In August 2012, Mr. Friedman stepped down as co-chief govt after an inner investigation discovered that he’d had an inappropriate relationship with a 26-year-old feminine worker.
In Mr. Friedman’s telling, he didn’t do something fallacious. “I used to be single, I met any person at work, God forbid,” he stated. “Lots of people meet at work and fall in love.” The girl, he stated, left the corporate after they began relationship.
Mr. Friedman wouldn’t identify this lady, nor would any of his present or former colleagues. Her model of those occasions shouldn’t be publicly recognized. After a 10-month hiatus, Mr. Friedman returned to his job.
Within the 2010s, the corporate pivoted from common shops to extravagantly renovated landmarks — the onetime Museum of Pure Historical past in Boston, a 60-room Palladian-style villa in Indianapolis — with out a money register in sight. It was a decisive step towards turning into a life-style moderately than only a retailer. Traders noticed a winner. In 2019, shares have been buying and selling at $150, and by August 2021 they’d climbed to $750, as Covid incited a house renovation craze.
However like many retailers, RH had provide chain points, and it raised costs too aggressively, the corporate stated in an earnings name. Shares fell beneath $214 late final 12 months. The Europe plans have been already in movement, although, and Mr. Friedman has not backed off them.
At RH headquarters, there’s a full-scale mannequin of the rooftop restaurant for an RH retailer set to open someday in 2025 in Paris, close to the Champs-Élysées. This model is made with Styrofoam tables and plenty of place-holding silverware, glasses and chairs. Immense pictures of town are plastered on partitions, designed to breed the view that diners will see. It’s mainly a tough draft you’ll be able to sit in.
“You don’t get a second likelihood to make a primary impression in Paris,” Mr. Friedman stated.
RH hopes to prosper in the identical skinny air breathed by Chanel, Hermès and Gucci, a realm that appears downright hostile to American manufacturers. Apart from Tiffany and Ralph Lauren, few have succeeded within the cradle of luxurious retail. And RH emerged from the least refined of settings. It has roots within the U.S. mall, the place it supplied ornamental equipment and inexpensive nostalgia. Mr. Friedman is fairly positive these storied European manufacturers are wanting down on the corporate.
“We aren’t from their neighborhood,” he’s fond of claiming, “nor invited to their events.” If the previous is any indication, he’s not ready for an invite. He’ll throw a shindig of his personal.
