Gary Friedman hates conferences. A 66-year-old with apparently limitless power and a perpetual tan, Mr. Friedman is the chief government of RH, one of many nation’s largest high-end furnishings sellers, and he by no means holds conferences. As a substitute, he convenes “adventures.”
To the untrained eye, these look and sound loads 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, known as “galleries” in RH communicate, with 35 new ones within the works. Many will value $20 million or extra.
RH offered $3 billion price of merchandise final 12 months, however Mr. Friedman’s objective isn’t just to maneuver $10,000 sectional sofas, most of them in earth tones and a method that may very well be known as California Wealthy. He needs to forge a model that’s so ubiquitous — RH eating places, RH inns, RH clothes — that its impression is international.
“I don’t actually discuss our imaginative and prescient for the corporate to Wall Avenue as a result of they could lock me up,” Mr. Friedman mentioned one current 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 countless 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 low 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). Whole dedication is required of underlings. Something much less can deliver scolding rebukes.
Mr. Friedman turned the chief government of what was then known 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 buyers may attain for furnishings a bit exterior their funds. Through the pandemic-era renovation craze, the corporate was price $15.5 billion.
However RH is now struggling by means of 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 actual property enterprise, planning furnished residences and homes in locations like Aspen and Napa.
The purpose for Mr. Friedman, an inveterate optimist, is to organize for the increase that he believes will ensue when rates of interest go down. He additionally needs to broaden RH’s enchantment past the upwardly cell who at the moment are its core prospects and pitch the model to the ultrarich. Therefore extra RH eating places, with most important programs that embody such decadence-signaling dishes as a $125 grilled Wagyu rib-eye steak.
And as if to show that his ambitions are really 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,” mentioned Pamela Danziger, the founding father of Unity Advertising, a market analysis agency. “To open in England, France and all these different locations — I feel he’s simply put manner an excessive amount of in entrance of him. As a result of he’s obtained 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 lots of others, in our interview, which become 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 present, his internet price is $1.5 billion, in keeping 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 seaside 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 certainly one of his sofas, in muted tones and dear 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 “Consider” — Italian good 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 may very well be known 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 can be inside our attain.”
The Whole Pampering Resolution
Few corporations are higher at exploiting the American obsession with affluence than RH. It sells the form of glossy, oversize furnishings seen on tv reveals like “Succession” and does it by means of a singular form of experiential buying. With their hovering ceilings and Zen atmosphere, RH showrooms are a daydreamer’s fantasy of a billionaire’s residence.
Perhaps you’re not a hedge fund skilled, the décor says, however you should purchase a hedge fund skilled’s drapes.
“Gary discovered a distinct segment that no one had exploited within the residence furnishings house,” mentioned Warren Shoulberg, a former editor of Residence Furnishings Information, a commerce publication. “The wannabe wealthy.”
The twist, retail advertising and marketing consultants say, is that RH isn’t really a luxurious model. Within the business argot, it’s premium, which implies it’s dearer than rivals like Crate & Barrel and West Elm however lower than the bespoke choices offered in designer showrooms the place solely inside decorators should purchase. These showrooms are stuffed with handmade furnishings, lighting and rugs from Italy, France and home hubs like North Carolina. They value extra, last more and maintain extra of their resale worth. In contrast, RH furnishings is basically mass-produced in nations equivalent to China, Vietnam and Indonesia.
“Most individuals within the design business have a look at RH as fancier West Elm,” mentioned Jason Campbell, an inside designer in Manhattan. “However it’s nonetheless fairly costly. I seemed for a sectional couch for a shopper just lately and was shocked to see one from RH for $14,000. You would 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 price near-luxury costs.
The corporate has zero presence on social media for roughly the identical purpose {that a} hip bar doesn’t have a door signal. (“There’s no faculty for cool” is certainly one of RH’s official rules.) Nonetheless, unbidden and unpaid endorsements are recurrently supplied 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 the moment begins at about $4,800.
RH is consistently searching for novel methods to construct mystique. The corporate’s web site doesn’t submit pictures of the rooms in its first resort, in Manhattan’s meatpacking district, the place rooms begin at $2,200 an evening. And the one strategy to guide a keep is to inquire by way of e-mail. On a current 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 embody branded inns and RH Residences, the corporate’s first foray into totally furnished stand-alone homes.
“We might promote these houses, however we might additionally handle these houses,” Mr. Friedman mentioned. RH would assist lease the homes when patrons 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 houses and condominiums all over the world. RH want seize solely a tiny slice of that and its worth will soar, he mentioned, to $70 billion or extra.
Analysts are skeptical. “It’s extraordinarily unlikely that RH will ever get a fabric share of this market,” Seth Basham of Wedbush Securities mentioned. “Gary’s a giant dreamer.”
RH has taken on a big 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 mentioned.
If gross sales fall and spending continues, Mr. Basham mentioned, the corporate’s future may begin trying dicey. However Mr. Friedman has by no means shied away from threat, and he can’t cease barreling into every kind 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 house within the Chelsea neighborhood of Manhattan and recruited a roster of artists. Artnet known as it “one of many extra curious incursions into the artwork sphere” when it closed about two years later.
“Powerful enterprise mannequin,” Mr. Friedman mentioned in our interview. “You’ve obtained this good thing, however you’ll be able to solely promote certainly one of 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 certainly one of our factories in Vietnam,” mentioned Nicholas Condos, whose furnishings firm, Harbour, has offered greater than a dozen collections by means of RH. “And he’ll wish to work till 5 a.m. Nobody is keen 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 shocking query: What are you keen to struggle and die for?
“I had a sense once I first met him,” Ms. Chaya mentioned, “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 could have fallen quick.
That ceremony has been changed by the Each day Values Journey. It begins at 10 a.m. daily and is formed by matter sentences equivalent to “Share a time when your ego obtained in the best way of discovering a greater manner.”
Amongst some executives, Mr. Friedman’s nickname is “The Solar” — an individual who offers 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 rankings from present workers. Simply 22 p.c of respondents mentioned they’d advocate the corporate to a good friend; 67 p.c mentioned they’d not, inserting it within the backside 10 p.c of corporations of comparable measurement.
Mr. Friedman is unbothered by this sort of suggestions. The maxims he wrote for the corporate embody “Love us or depart us.” Loads of folks, he famous, stick round for years, and others who’ve stop later returned, having discovered life elsewhere a bit boring.
When underlings have come up quick, he has been identified to lash out, a bent he claims to dislike and candidly acknowledges.
“Typically, I don’t yell at folks — I yell on the drawback,” he mentioned. “For those who step in entrance of the issue and defend the issue, you would possibly 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 mentioned, and was usually unable to work. He mentioned the pair had lived in additional than a dozen tiny residences by the point he was 16.
“Our prized possession was a bit black-and-white TV with massive bunny ears,” he mentioned. “It’s the one factor that all the time 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 known 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 known as Retailer One.
He was there sooner or later 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 mentioned. “And Mickey mentioned: ‘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 known 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 stuffed with the corporate’s high executives, Mr. Drexler gave his new cost an project.
“I needed an goal individual’s expertise with actual prospects,” recalled Mr. Drexler, who as we speak is chief government of Alex Mill, a trend model began by his son. “So I mentioned, ‘I need you to be the suggestions individual on these government conferences.’ He had good power, I felt the power and I favored him.”
Mr. Friedman turned, at 25, the youngest regional supervisor on the Hole and was later recruited by Williams-Sonoma as a senior vice chairman 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 centered 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 government. “It broke my coronary heart,” he mentioned.
In a matter of days, he joined Restoration {Hardware} as chief government, and helped elevate 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 all the time had a really clear perspective,” mentioned 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 house’ — 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 government after an inside 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 improper. “I used to be single, I met any individual at work, God forbid,” he mentioned. “Lots of people meet at work and fall in love.” The girl, he mentioned, left the corporate after they began courting.
Mr. Friedman wouldn’t identify this lady, nor would any of his present or former colleagues. Her model of those occasions isn’t publicly identified. 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 no money register in sight. It was a decisive step towards turning into a way of life relatively than only a retailer. Buyers noticed a winner. In 2019, shares have been buying and selling at $150, and by August 2021 that they had 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 mentioned 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 probability to make a primary impression in Paris,” Mr. Friedman mentioned.
RH hopes to prosper in the identical skinny air breathed by Chanel, Hermès and Gucci, a realm that appears downright hostile to American manufacturers. Aside 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 reasonably priced nostalgia. Mr. Friedman is fairly positive these storied European manufacturers are trying 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.
