RH (collectively, “we,” “us,” or the “Company”) is a leading retailer and luxury lifestyle brand operating primarily in the home furnishings market.
−Removed: Our curated and fully integrated assortments are presented consistently across our sales channels, including our retail locations, websites and Source Books.
+Added: Our curated and fully integrated assortments are presented consistently across our sales channels, including our retail locations, websites and Sourcebooks.
We offer merchandise assortments across a number of categories, including furniture, lighting, textiles, bathware, décor, outdoor and garden, and baby, child and teen furnishings.
Our retail business is fully integrated across our multiple channels of distribution.
−Removed: We position our Galleries as showrooms for our brand, while our websites and Source Books act as virtual and print extensions of our physical spaces, respectively.
−Removed: We operate our retail locations throughout the United States, Canada, and the U.K., and have an integrated RH Hospitality experience in 14 of our Design Gallery locations, which includes Restaurants and Wine Bars.
−Removed: In addition, we opened our first RH Guesthouse in New York in September 2022, a first-of-its-kind hospitality experience for travelers seeking privacy and luxury.
−Removed: The property features six guest rooms, three guest suites and a private residence, as well as The Dining Room & Terrace.
−Removed: Macroeconomic Factors
−Removed: There are a number of macroeconomic factors and uncertainties affecting the overall business climate as well as our business, including increased inflation, rising interest and mortgage rates, and uncertainties in the global financial markets related to the foregoing as well as, among other things, the war in Ukraine and recent failures of several financial institutions, including Silicon Valley Bank and others.
−Removed: These and other macroeconomic factors may have a number of adverse effects on economic conditions and markets in which we operate, including the housing market, with the potential for an economic recession and a sustained downturn in the housing market.
−Removed: Factors such as a slowdown in the housing market or negative trends in stock market prices could have a negative impact on demand for our products.
−Removed: We believe that these macroeconomic factors have contributed to the slowdown in demand that we have experienced in our business over the last several fiscal quarters.
−Removed: Our decisions regarding the sources and uses of capital will continue to reflect and adapt to changes in market conditions and our business, including further developments with respect to macroeconomic factors.
−Removed: For more information, refer to Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview.
+Added: We position our Galleries as showrooms for our brand, while our websites and Sourcebooks act as virtual and print extensions of our physical spaces, respectively.
+Added: We operate our retail locations throughout the United States, Canada, the United Kingdom and Germany.
+Added: We have an integrated RH Hospitality experience in 16 of our Design Gallery locations, which includes restaurants and wine bars, and we operate both a restaurant and a Champagne & Caviar Bar at the RH Guesthouse New York.
Key Value-Driving Strategies
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We believe we have built the most comprehensive and compelling collection of luxury home furnishings under one brand in the world.
−Removed: Our products are presented across multiple collections, categories and channels that we control, and their desirability and exclusivity has enabled us to achieve industry-leading revenues and margins.
−Removed: Our customers know our brand concepts as RH Interiors, RH Modern, RH Contemporary, RH Outdoor, RH Beach House, RH Ski House, RH Baby & Child, RH TEEN and Waterworks.
+Added: Our products are presented across multiple collections, categories and channels that we control, and their desirability and exclusivity has enabled us to achieve strong revenues and margins.
+Added: Our customers know our brand concepts as RH Interiors, RH Contemporary, RH Modern, RH Outdoor, RH Beach House, RH Ski House, RH Baby & Child, RH TEEN and Waterworks.
Our strategy is to continue to elevate the design and quality of our product.
−Removed: Over the next few years, we plan to introduce RH Couture, RH Bespoke and RH Color.
+Added: With the recent launch of the fall RH Interiors and RH Contemporary Sourcebooks, we have begun the introduction of the most prolific collection of new products in our history, which will continue into next year.
+Added: In addition, over the next few years, we plan to introduce RH Couture, RH Bespoke and RH Color.
Gallery Transformation .
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We believe we can significantly increase our sales by transforming our real estate platform from our existing legacy retail footprint to a portfolio of Design Galleries sized to the potential of each market and the size of our assortment.
−Removed: In addition, we plan to incorporate hospitality into most of the new Design Galleries that we open in the future, which further elevates and renders our product and brand more valuable.
+Added: In addition, we plan to incorporate hospitality into many of the new Design Galleries that we open in the future, which further elevates and renders our product and brand more valuable.
We believe hospitality has created a unique new retail experience that cannot be replicated online, and that the addition of hospitality drives incremental sales of home furnishings in these Galleries.
−Removed: FORM 10-K | 1
Brand Elevation .
−Removed: We are evolving the brand beyond curating and selling product to conceptualizing and selling spaces by building an ecosystem of Products, Places, Services and Spaces designed to elevate and render our product more valuable while establishing the RH brand as a thought leader, taste and place maker.
+Added: Our strategy is to move the brand beyond curating and selling product to conceptualizing and selling spaces, by building an ecosystem of Products, Places, Services and Spaces that establishes the RH brand as a global thought leader, taste and place maker.
We believe our seamlessly integrated ecosystem of immersive experiences inspires customers to dream, design, dine, travel and live in a world thoughtfully curated by RH, creating an impression and connection unlike any other brand in the world.
Our hospitality efforts will continue to elevate the RH brand as we extend beyond the four walls of our Galleries into RH Guesthouses, where our goal is to create a new market for travelers seeking privacy and luxury in the $200 billion North American hotel industry.
−Removed: We entered this industry with the opening of our RH Guesthouse in New York in September 2022, and are in the process of constructing our second RH Guesthouse in Aspen.
−Removed: Additionally, we are creating bespoke experiences like RH Yountville, an integration of Food, Wine, Art & Design in the Napa Valley, RH1 & RH2, our private jets, and RH3, our luxury yacht that is available for charter in the Caribbean and Mediterranean, where the wealthy and affluent visit and vacation.
+Added: We entered this industry with the opening of the RH Guesthouse New York in September 2022, and are in the process of constructing our second RH Guesthouse in Aspen.
+Added: In June 2023, we opened RH England, The Gallery at the Historic Aynho Park, a 400-year-old landmark estate representing the most inspiring and immersive physical expression of the brand to date.
+Added: RH England marked the beginning of our global expansion beyond North America.
+Added: Additionally, we are creating bespoke experiences like RH Yountville, an integration of Food, Wine, Art & Design in the Napa Valley;
+Added: RH1 & RH2, our private jets;
+Added: and RH3, our luxury yacht that is available for charter in the Caribbean and Mediterranean, where the wealthy and affluent visit and vacation.
These immersive experiences expose new and existing customers to our evolving authority in architecture, interior design and landscape architecture.
+Added: FORM 10-K | 1
+Added: Global Expansion.
+Added: We believe that our luxury brand positioning and unique aesthetic have strong international appeal, and that pursuit of global expansion will provide RH with a substantial opportunity to build over time a projected $20 to $25 billion global brand in terms of annual revenues.
+Added: Our view is that the competitive environment globally is more fragmented and primed for disruption than the North American market, and there is no direct competitor of scale that possesses the product, operational platform, and brand of RH.
+Added: As such, we are actively pursuing the expansion of the RH brand globally.
+Added: Our plans include launching a number of international locations in the United Kingdom and Europe, which began with the opening of RH England, The Gallery at the Historic Aynho Park, in June 2023;
+Added: followed by the November 2023 openings of RH Munich, The Gallery on Sendlinger Strasse, and RH Düsseldorf, The Gallery on the Königsallee;
+Added: as well as RH Brussels, The Gallery on Boulevard de Waterloo, in March 2024.
+Added: We have secured a number of locations in various markets in the United Kingdom, continental Europe and Australia, including in Madrid, Paris, London, Milan and Sydney.
Digital Reimagination .
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We believe an opportunity exists to create similar strategic separation online as we have with our Galleries offline, reconceptualizing what a website can and should be.
−Removed: Global Expansion.
−Removed: We believe that our luxury brand positioning and unique aesthetic have strong international appeal, and that pursuit of global expansion will provide RH a substantial opportunity to build over time a projected $20 to $25 billion global brand in terms of annual revenues.
−Removed: Our view is that the competitive environment globally is more fragmented and primed for disruption than the North American market, and there is no direct competitor of scale that possesses the product, operational platform, and brand of RH.
−Removed: As such, we are actively pursuing the expansion of the RH brand globally with the objective of launching international locations in Europe beginning with the opening of RH England, The Gallery at the Historic Aynho Park, this summer.
−Removed: We have secured a number of locations in various markets in the U.K.
−Removed: and continental Europe for future Design Galleries and are currently in lease or purchase negotiations for additional locations.
Products and Product Development
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In addition, our product development platform, sourcing capabilities and significant scale enable us to reduce our product costs.
−Removed: 2 | FORM 10-K
Sales Channels
−Removed: We distribute our products through a fully integrated sales platform comprising our retail locations, including RH Galleries and Waterworks Showrooms, in addition to our websites, Source Books, Trade and Contract, and Outlets.
+Added: We distribute our products through a fully integrated sales platform comprising our retail locations, including RH Galleries and Waterworks Showrooms, in addition to our websites, Sourcebooks, Trade and Contract, and Outlets.
We believe the level of integration among all of our channels and our approach to the market distinguish us from other retailers.
We encourage our customers to shop across our channels, which complement one another, and have aligned our business and internal organization to be channel agnostic.
+Added: 2 | FORM 10-K
Retail Locations
−Removed: As of January 28, 2023, our retail locations comprise RH Galleries and Waterworks Showrooms:
+Added: As of February 3, 2024, our retail locations comprise RH Galleries and Waterworks Showrooms:
AVERAGE LEASED SELLING
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Legacy Galleries
−Removed: Modern Galleries
+Added: Modern Gallery
Baby & Child and TEEN Galleries
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(1) Average leased selling square footage is calculated based on total leased selling square footage divided by total locations.
−Removed: Leased selling square footage is retail space at our retail locations used to sell our products, as well as space for our restaurants.
+Added: Leased selling square footage is retail space at our retail locations used to sell our products, as well as space for our restaurants and wine bars.
Leased selling square footage excludes backrooms at retail locations used for storage, office space, food preparation, kitchen space or similar purpose, as well as exterior sales space located outside a retail location, such as courtyards, gardens and rooftops.
−Removed: (2) We have an integrated RH Hospitality experience in fourteen of our Design Galleries.
−Removed: We also have RH Hospitality in our one RH Guesthouse.
+Added: (2) We have an integrated RH Hospitality experience in 16 of our Design Galleries and in our one RH Guesthouse.
Our Galleries reinforce our luxury brand aesthetic and are highly differentiated from other home furnishings retailers.
−Removed: We have revolutionized the customer experience by showcasing products in a sophisticated lifestyle setting, consistent with the imagery and product presentation featured on our websites and in our Source Books.
+Added: We have revolutionized the customer experience by showcasing products in a sophisticated lifestyle setting, consistent with the imagery and product presentation featured on our websites and in our Sourcebooks.
Products in our Galleries are presented in fully appointed rooms, emphasizing collections over individual pieces.
This presentation inspires our customers to consider purchasing a full collection of products to replicate the design aesthetic experienced in our Galleries.
−Removed: In addition, our associates use iPads and other devices to allow customers to shop our entire merchandise assortment while in a retail location.
+Added: In addition, our employees use iPads and other devices to allow customers to shop our entire merchandise assortment while in a retail location.
We believe situating our Galleries in desirable locations, such as iconic buildings and luxury retail shopping centers, is critical to the success of our business.
−Removed: New sites are identified based on a variety of store-specific factors – including unique architecture, geographic location, demographics, and proximity to affluent consumers – in addition to our ability to negotiate favorable economic terms and to procure permits and complete construction in a timely manner.
+Added: New sites are identified based on a variety of store-specific factors, including unique architecture, geographic location, demographics, and proximity to affluent consumers.
We pursue a market-based sales strategy whereby we assess each market’s overall sales potential and how best to approach the market across all of our channels.
−Removed: We customize square footage, as well as Source Book circulation, to maximize each market’s sales potential and increase our return on invested capital.
−Removed: We believe our integrated RH hospitality experience, which includes Restaurants and Wine Bars, has created a unique new retail experience that cannot be replicated online, and that the addition of hospitality drives incremental sales of home furnishings in these Galleries.
−Removed: We plan to incorporate hospitality into most of the new Galleries that we open in the future.
+Added: We maximize our gallery square footage, as well as Sourcebook circulation, to capitalize on each market’s sales potential and increase our return on invested capital.
+Added: We believe our integrated RH hospitality experience, which includes restaurants and wine bars, has created a unique retail experience that cannot be replicated online, and that the addition of hospitality drives incremental sales of home furnishings in these Galleries.
+Added: We plan to incorporate hospitality into many of the new Galleries that we open in the future.
We have identified key learnings from our real estate transformation that have supported the development of a multi-tier market approach described below that we believe will optimize both market share and return on invested capital.
−Removed: FORM 10-K | 3
−Removed: First, we have architected Design Galleries to be innovative and flexible formats that will enable us to more quickly place our disruptive product assortment and immersive retail experience into the market.
−Removed: We will continue to utilize these designs and innovate based on key learnings from more recent Design Gallery openings.
−Removed: Our most common Design Galleries have approximately 30,000 to 40,000 leased selling square feet, inclusive of our integrated hospitality experience, and present our product assortments across our businesses and contain interior design offices and presentation rooms where design professionals work with clients on their projects.
−Removed: These designs are capital efficient and accelerate the development process.
−Removed: Examples of these upcoming Galleries include Palo Alto, California and Cleveland, Ohio.
−Removed: Second, we will continue to develop and open larger Bespoke Design Galleries in the top metropolitan markets, similar to those we opened in New York and Chicago.
+Added: First, we have architected Design Galleries to be innovative and flexible formats that enable us to more quickly place our disruptive product assortment and immersive retail experience into the market.
+Added: We will continue to innovate based on key learnings from more recent Design Gallery openings.
+Added: Most of our Design Galleries have approximately 30,000 to 40,000 leased selling square feet, inclusive of our integrated hospitality experience, presenting our product assortments across our businesses, and containing interior design offices and presentation rooms where design professionals work with clients on their projects.
+Added: Examples of these types of Galleries include RH Cleveland, The Gallery at Pinecrest, which opened in March 2024, and RH Palo Alto, The Gallery at Stanford, which we plan to open in 2024.
+Added: Second, we will continue to develop and open larger Bespoke Design Galleries in the top metropolitan markets, similar to those we opened in New York, Chicago and San Francisco.
These iconic locations are highly profitable statements for our brand, and we believe they create a long-term competitive advantage that will be difficult to duplicate.
−Removed: We opened our Bespoke Design Gallery, RH San Francisco, The Gallery at the Historic Bethlehem Steel Building, in May 2022 and expect to open additional Bespoke locations in the coming years, including RH England, The Gallery at the Historic Aynho Park, RH New Jersey, The Gallery at the Historic Alnwick Hall and other locations in the U.S.
−Removed: Third, we will continue to open Bespoke Galleries in the best second-home markets where Galleries are tailored to reflect the local culture and are sized to the potential of each market.
−Removed: Examples of current Bespoke Galleries include our location in Yountville, California, as well as our Gallery under development in Aspen, Colorado.
−Removed: Fourth, we have developed alternative Design Gallery formats with varying sizes that are suited to many smaller and mid-sized North American markets, and we are testing this approach as we open new Galleries in different new locations.
−Removed: Finally, we believe there is an opportunity to address new markets locally by opening new Design Studios in neighborhoods, towns and small cities where the wealthy and affluent live, visit and vacation.
−Removed: We have several existing locations that validate this strategy in East Hampton, Yountville, Los Gatos, Pasadena and our former San Francisco Gallery in the Design District, where we have approximately 2,000 to 5,000 square feet and are able to generate substantial annual revenues.
−Removed: The cadence of our Gallery openings depends upon a number of factors.
−Removed: We plan to expand our product sales to additional international markets and have signed agreements for Design Galleries in several locations outside of North America, including the U.K., France, Germany, Spain, Italy and Belgium.
+Added: We opened our Bespoke Design Gallery, RH England, The Gallery at the Historic Aynho Park, in June 2023 and plan to open additional Bespoke locations across the U.S.
+Added: and Europe in the coming years, including RH New Jersey, The Gallery at the Historic Alnwick Hall and RH Paris, The Gallery on the Champs-Élysées.
FORM 10-K | 3
+Added: Third, we will continue to open Bespoke Galleries in the best second-home markets where our Galleries are tailored to reflect the local culture and are sized to the potential of each market.
+Added: Examples of current Bespoke Galleries include our location in Yountville, California, as well as our Galleries under development in Montecito, California and Aspen, Colorado.
+Added: Finally, we believe there is an opportunity to address new markets locally by opening Design Studios in neighborhoods, towns and small cities where the wealthy and affluent live, visit and vacation.
+Added: We have several existing locations that validate this strategy in East Hampton, Los Gatos, Pasadena and our former San Francisco Gallery in the Design District, where we have generated annual revenues in the range of $5 to $20 million in 2,000 to 5,000 square feet.
+Added: We have secured our first new location for a Design Studio in Palm Desert, California, which we plan to open in the second half of 2024.
+Added: The cadence of our Gallery openings depends upon a number of factors.
+Added: We plan to continue to expand our product sales to additional international markets and have signed agreements for Design Galleries in several locations outside of North America, including the United Kingdom, France, Spain, Italy and Australia.
+Added: We opened RH Brussels, The Gallery on the Boulevard De Waterloo, in March 2024, and plan to open RH Madrid, The Gallery at Plaza del Marqués de Salamanca, in fiscal 2024.
+Added: We are also under construction in London, Paris and Milan in inspiring spaces that will celebrate the heritage of the historic structures and will integrate full expressions of our hospitality experiences.
+Added: In addition, we have received local approvals for the development of RH Sydney, The Gallery in Double Bay.
The following tables present our retail location metrics:
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RH Design Galleries:
+Added: England Design Gallery
+Added: Munich Design Gallery
+Added: Düsseldorf Design Gallery
+Added: Indianapolis Design Gallery (relocation)
San Francisco Design Gallery
−Removed: Dallas Design Gallery
−Removed: Oak Brook Design Gallery
−Removed: Jacksonville Design Gallery
−Removed: RH Modern Galleries:
−Removed: Dallas RH Modern Gallery
−Removed: RH Baby & Child and TEEN Galleries:
−Removed: Santa Monica Baby & Child and TEEN Gallery
RH Legacy Galleries:
+Added: Detroit Legacy Gallery (relocation)
+Added: Short Hills Legacy Gallery (relocation)
San Francisco Legacy Gallery
Troy Legacy Gallery (relocation)
−Removed: Dallas legacy Gallery
−Removed: Oak Brook legacy Gallery
−Removed: Tysons legacy Gallery (relocation)
+Added: Waterworks Showrooms:
+Added: Atlanta Showroom (relocation)
End of period
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Weighted-average leased selling square footage (3)
−Removed: (1) Leased selling square footage is retail space at our retail locations used to sell our products, as well as space for our Restaurants.
+Added: (1) Leased selling square footage is retail space at our retail locations used to sell our products, as well as space for our restaurants and wine bars.
Leased selling square footage excludes backrooms at retail locations used for storage, office space, food preparation, kitchen space or similar purpose as well as exterior sales space located outside a retail location, such as courtyards, gardens and rooftops.
−Removed: Leased selling square footage includes approximately 4,800 square feet as of fiscal 2021 related to one owned retail location.
−Removed: (2) Total leased square footage includes approximately 5,400 square feet as of fiscal 2021 related to one owned retail location.
−Removed: (3) Weighted-average leased square footage and leased selling square footage are calculated based on the number of days a retail location was opened during the period divided by the total number of days in the period.
−Removed: In addition to the retail locations, in fiscal 2022 we opened our RH Guesthouse with approximately 13,800 leased selling square footage.
4 | FORM 10-K
+Added: Leased selling square footage includes approximately 56,000 square feet as of fiscal 2023 related to two owned retail locations.
+Added: (2) Total leased square footage includes approximately 100,000 square feet as of fiscal 2023 related to two owned retail locations.
+Added: (3) Weighted-average leased square footage and leased selling square footage are calculated based on the number of days a retail location was opened during the period divided by the total number of days in the period.
+Added: In addition to the retail locations, we operate one RH Guesthouse with approximately 13,800 selling square footage.
The following list shows the number of retail locations in each U.S.
−Removed: state, each Canadian province and in the U.K.
−Removed: where we operate as of January 28, 2023:
+Added: state and foreign country where we operate as of February 3, 2024:
Massachusetts
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North Carolina
−Removed: British Columbia
−Removed: (1) The London retail location is a Waterworks Showroom.
+Added: United Kingdom (1)
+Added: (1) The United Kingdom retail locations include an RH Design Gallery and a Waterworks Showroom.
We continually analyze opportunities to selectively consolidate retail locations in connection with openings of our Design Galleries or close retail locations that have been under-performing or are no longer consistent with our brand positioning.
−Removed: In many cases, we continue to operate a retail location until our lease has expired in order to effect the closure in a cost-efficient manner.
−Removed: Our primary RH websites, www.rh.com , www.rhmodern.com, www.rhbabyandchild.com and www.rhteen.com , provide our customers with the ability to purchase our merchandise online.
−Removed: We sell Waterworks products online through www.waterworks.com .
−Removed: Our websites allow our customers to experience the unique lifestyle settings reflected in our Source Books and throughout our Galleries and Showrooms, and to shop all of our current product assortment.
+Added: In many cases, we continue to operate a retail location until our lease has expired in order to affect the closure in a cost-efficient manner.
+Added: Our primary RH websites, rh.com, rhbabyandchild.com and rhteen.com , provide our customers with the ability to purchase our merchandise online.
+Added: We sell Waterworks products online through waterworks.com .
+Added: Our websites allow our customers to experience the unique lifestyle settings reflected in our Sourcebooks and throughout our Galleries and Showrooms, and to shop all of our current product assortment.
We update our websites regularly to reflect new products, product availability and occasional special offers.
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Additionally, customers can select color swatches and view merchandise displayed with different color and fabric options.
−Removed: We produce a series of catalogs, which we refer to as Source Books, to showcase our merchandise assortment.
−Removed: Our Source Books include RH Interiors, RH Modern, RH Outdoor, RH Baby & Child and TEEN, RH Beach House, RH Ski House and RH Rugs.
−Removed: Additionally, we launched the RH Contemporary Source Book in fiscal 2022.
−Removed: Our Source Books are one of our primary branding and advertising vehicles.
−Removed: We have found that merchandise assortments displayed in our Source Books contribute to increased sales of those products across all of our channels.
−Removed: As in our Galleries, our Source Books present our merchandise in lifestyle settings that reflect our unique design aesthetic.
−Removed: Our Source Books also feature profiles of select artisan vendors and other compelling editorial content regarding home décor.
−Removed: All creative work on our Source Books is coordinated in-house in our RH Center of Innovation & Product Leadership , providing us greater control over the brand image presented to our customers, while also reducing our Source Book production costs.
FORM 10-K | 5
−Removed: Our Source Book mailings serve as a key driver of sales through both our retail locations and websites.
−Removed: Our customers respond to the Source Books across all of our channels, with sales trends closely correlating to the assortments that we emphasize and feature prominently in our Source Books, websites and Galleries.
−Removed: Our Source Books, in concert with our websites, are a cost-effective means to test new products, and allow us to launch categories in a disciplined, expeditious and cost-effective manner.
−Removed: We continue to evaluate and optimize our Source Book strategy based on our experience.
+Added: We produce a series of catalogs, which we refer to as Sourcebooks, to showcase our merchandise assortment.
+Added: Our Sourcebooks include RH Interiors, RH Contemporary, RH Modern, RH Outdoor, RH Beach House, RH Ski House, RH Baby & Child, RH TEEN and RH Rugs.
+Added: Our Sourcebooks are one of our primary branding and advertising vehicles.
+Added: We have found that merchandise assortments displayed in our Sourcebooks contribute to increased sales of those products across all of our channels.
+Added: As in our Galleries, our Sourcebooks present our merchandise in lifestyle settings that reflect our unique design aesthetic.
+Added: Our Sourcebooks also feature profiles of select artisan vendors and other compelling editorial content regarding home décor.
+Added: All creative work on our Sourcebooks is coordinated in-house in our RH Center of Innovation & Product Leadership, providing us greater control over the brand image presented to our customers, while also reducing our Sourcebook production costs.
+Added: We distribute our Sourcebooks throughout the U.S.
+Added: and Canada, in the United Kingdom, and in countries where we operate within the European Union.
+Added: Our customers respond to the Sourcebooks across all of our channels, with sales trends closely correlating to the assortments that we emphasize and feature prominently in our Sourcebooks, Galleries and websites.
+Added: Our Sourcebooks, in concert with our websites, are a cost-effective means to test new products, and allow us to launch categories in a disciplined, expeditious and cost-effective manner.
+Added: We continue to evaluate and optimize our Sourcebook strategy based on our experience.
We maintain a database of customer information, including information from our RH Members Program.
Our customer database includes sales patterns, detailed purchasing information and certain demographic information, as well as mailing and email addresses.
−Removed: We mail our Source Books to addresses within this database and to addresses provided to us by third parties.
+Added: We mail our Sourcebooks to addresses within this database and to addresses provided to us by third parties.
The database, which is maintained in accordance with our privacy policy disclosed on our website, supports our ability to analyze our customers’ buying behaviors across sales channels, facilitates the development of targeted marketing strategies, and supports prospecting new customers.
−Removed: We segment our customer files based on multiple variables, and we tailor our Source Book mailings and emails in response to the purchasing patterns and product needs of our customers.
+Added: We segment our customer files based on multiple variables, and we tailor our Sourcebook mailings and emails in response to the purchasing patterns and product needs of our customers.
We continue to improve the segmentation of customer files and the expansion of our customer database.
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Outlet Stores
−Removed: Our outlet stores are branded as RH Outlet or Restoration Hardware Outlet and are typically located in outlet malls.
+Added: Our outlet stores are branded as RH Outlet or Restoration Hardware Outlet and are typically located in outlet malls, power centers, and freestanding locations.
Our outlet stores serve as a key part of our reverse logistics platform and provide an efficient means to sell primarily returned merchandise and, to a lesser extent, discontinued and overstock merchandise outside of our core sales channels.
−Removed: As of January 28, 2023, we operated 37 outlet stores.
+Added: As of February 3, 2024, we operated 42 outlet stores, including one outlet location in the United Kingdom.
Marketing and Advertising
−Removed: Our Galleries, websites and Source Books are the primary branding and advertising vehicles for the RH brand.
+Added: Our Galleries, websites and Sourcebooks are the primary branding and advertising vehicles for the RH brand.
In addition, we employ a variety of marketing and advertising techniques to drive customer traffic across all our channels, strengthen and reinforce our brand image and acquire new customers.
−Removed: These include targeted Source Book circulation, email communications, promotional mailings, print advertisements, and public relations activities and events.
+Added: These include targeted Sourcebook circulation, email communications, promotional mailings, print advertisements, and public relations activities and events.
We use our customer database to tailor our programs and increase the efficiency of our marketing and promotional initiatives.
We leverage our marketing and advertising expenses across all our channels as we seek to optimize the efficiency of our investment.
+Added: Additionally, we operate certain brand-elevating assets that also serve as advertising vehicles for the RH brand, including RH Guesthouse New York;
+Added: RH England, The Gallery at the Historic Aynho Park;
+Added: and RH3, our luxury yacht that is available for charter.
+Added: 6 | FORM 10-K
The highly differentiated design aesthetic and environment of our Galleries drives customer traffic not only to our physical spaces but also to our websites.
−Removed: Our Source Books and targeted emails further reinforce the RH brand image and drive sales across all of our channels.
+Added: Our Sourcebooks and targeted emails further reinforce the RH brand image and drive sales across all of our channels.
We also participate in a wide range of other marketing, promotional and public relations activities.
These campaigns include media coverage in design, lifestyle, culture/society and specialty publications, as well as in-Gallery events related to new Gallery openings and product launches.
−Removed: In addition, we engage in print advertising in brand-relevant publications such as Architectural Digest, Elle Décor, T:
+Added: In addition, we engage in print advertising in brand-relevant publications such as Architectural Digest, Elle Decor, T:
The New York Times Style Magazine, WSJ.
−Removed: Magazine, Business of Home, Luxe Interiors + Designs, C Magazine and others.
+Added: Magazine, Business of Home, Luxe Interiors + Design, C Magazine and others.
We believe that these efforts drive increased brand awareness, leading to higher sales over time.
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We believe our membership model enhances the customer experience, renders our brand more valuable, improves operational execution and reduces costs.
−Removed: FORM 10-K | 7
Our sourcing strategy focuses on identifying and using vendors that can provide the quality materials and fine craftsmanship that our customers expect of our brand.
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We seek to ensure the consistent quality of our manufacturers’ products by selectively inspecting pre-production samples, conducting periodic site visits to certain of our vendors’ production facilities and selectively inspecting inbound shipments at our distribution facilities.
−Removed: In fiscal 2022, we sourced approximately 75% of our purchase dollar volume from approximately 25 vendors.
−Removed: In fiscal 2022, one vendor accounted for 13% of our purchase dollar volume.
−Removed: Based on total dollar volume of purchases for fiscal 2022, 71% of our products were sourced from Asia, with 29% sourced from China, 12% from the United States and the remainder from other countries and regions.
−Removed: We have a limited number of long-term merchandise supply contracts, but we believe that we generally have strong relationships with our product vendors.
−Removed: Although we transact business primarily on an order-by-order basis, we typically work with many of our vendors over extended periods of time, and many vendors continue to make long-term capacity investments to serve our increasing demands.
−Removed: We develop relationships with our vendors in order to achieve significant cost savings and improve our product development process by eliminating the use of most third-party purchasing agents in favor of a model in which we directly manage our vendors.
+Added: In fiscal 2023, we sourced 75% of our purchase dollar volume from 28 vendors, and one vendor accounted for 14% of our purchase dollar volume.
+Added: Based on total dollar volume of purchases for fiscal 2023, 66% of our products were sourced from Asia, including 30% from Vietnam, 22% from China and the remainder predominantly from India and Indonesia, as well as 14% from the United States and the remainder from other countries.
Distribution and Delivery
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We have one fulfillment center in the United States servicing Waterworks products.
+Added: In addition, we have one third-party distribution center in Europe and continue to develop our supply chain strategy in connection with our global expansion.
We operate portions of our home delivery services in 25 key markets to leverage operating costs and improve our customers’ delivery experience, while reducing returns and damage to our products.
We offer a white glove home delivery service for our larger merchandise and furniture categories, where third-party personnel deliver fully assembled items to the location of our customers’ choice.
−Removed: We believe there is an opportunity to improve the customer experience by taking greater control of the home delivery experience over time.
−Removed: We believe that many third-party furniture delivery providers are designed to support mass and mid-market companies and that significant opportunity exists for developing improved solutions for the luxury market.
We believe we have dramatically enhanced the customer experience while reducing return rates, damages and deliveries per order by enhancing the quality of our delivery providers through metric-based accountability standards.
−Removed: In addition, we have one third-party distribution center in Europe and continue to develop our supply chain strategy in connection with our global expansion.
We believe our supply chain and fulfillment operations allow us to manage customer orders and distribute merchandise to our customers in an efficient and cost-effective manner, and we continue to identify opportunities to improve the delivery of our products.
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We continue to elevate our product assortment and create separation between our brand and that of many of our competitors.
−Removed: We compete with the interior design trade and specialty stores, as well as antique dealers and other merchants that provide unique items and custom-designed products at higher price points.
−Removed: We also compete with a number of other home furnishing retailers, including national and regional businesses as well as new market participants.
−Removed: We will face new competitors as we expand our business globally.
−Removed: In addition, we compete with mail order catalogs and online retailers focused on home furnishings.
−Removed: 8 | FORM 10-K
−Removed: We compete b y offering what we believe is superior quality, highly distinctive design styles and a sophisticated lifestyle presentation in our product offering.
We also believe that our success depends in substantial part on our ability to originate and define product trends, as well as to timely anticipate, gauge and react to changing consumer demands.
+Added: FORM 10-K | 7
+Added: We compete with a number of home furnishings retailers, including national and regional businesses, as well as new market participants that operate predominantly online.
+Added: We also compete with the interior design trade and specialty stores, as well as antiques dealers and other merchants that provide unique items and custom-designed products at higher price points.
Many of our competitors seek to compete with us by offering products that are similar to our merchandise at lower price points.
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However, many smaller specialty retailers may lack the financial resources, infrastructure, scale and national brand identity necessary to compete effectively with us.
−Removed: We are a vision-led organization with a strong culture, led by our Chairman and Chief Executive Officer, Gary Friedman, in partnership with our senior leadership team.
−Removed: Together, they instill a company-wide commitment to our Vision, Values and Beliefs.
−Removed: Our Values – People, Quality, Service, and Innovation – are brought to life by our associates across the organization.
−Removed: Our success and future growth depends largely upon the continued service of our leadership team, as well as our talented associates across all parts of our organization.
−Removed: Our business success also depends on our ability to attract, hire and retain qualified individuals.
−Removed: We endeavor to reward individual and team contribution, demonstrated by the delivery of long-term, sustainable results.
−Removed: Our compensation programs are designed to align the interests of our officers and associates with our Vision, Values and objectives, as well as our business strategy.
+Added: As we expand our business globally, we will face new competitors .
+Added: We are a vision-led organization with a company-wide commitment to our core values of People, Quality, Service and Innovation.
+Added: Our values are brought to life by our employees, whom we refer to as our team members.
+Added: We believe that our culture is unique and attracts highly talented individuals aligned with our core values.
+Added: Our success and future growth depend upon the continued commitment to our values and culture, which can be seen and felt across all parts of our organization.
RH is an equal opportunity employer, and we believe in meritocratic hiring.
1 unchanged sentence
We strongly believe our performance is enhanced by a workforce composed of individuals with diverse backgrounds, skills and experience that align with the needs of our business, culture and values.
−Removed: We have a policy that prohibits us from discriminating against any applicant or associate and this policy governs all aspects of employment, including recruitment, hiring, training, promotion, compensation, discipline, job assignments, benefits, transfer and discharge.
+Added: We have a policy that prohibits us from discriminating against any applicant or team member and this policy governs all aspects of employment, including recruitment, hiring, training, promotion, compensation, discipline, job assignments, benefits, transfer and discharge.
We believe that our commitment to diversity is demonstrated by the composition of our workforce.
−Removed: We are committed to operating our environments with the highest safety standards to ensure the health and well-being of our guests and team members.
+Added: We are committed to operating our environments with the highest standards that ensure the safety, health and well-being of our team members and guests.
We require our vendors to adhere to our Vendor Code of Conduct, which can be found on the Investor Relations section of our website, located at ir.rh.com under “Governance — Environmental, Social & Governance.”
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(approximate)
−Removed: Total associates (1)
−Removed: Retail and Outlet associates
−Removed: Hospitality associates
−Removed: Part-time associates
−Removed: (1) None of our associates are represented by a union, and we have had no labor-related work stoppages .
+Added: Total team members (1)
+Added: Retail and Outlet team members
+Added: Hospitality team members
+Added: Part-time team members
+Added: (1) None of our team members are represented by a union, and we have had no labor-related work stoppages .
Environmental, Social and Governance
−Removed: Our environmental , social and certain other governance efforts are implemented through our environmental, social and governance (“ESG”) programs, which are designed to align our approach to ESG issues with the interests of our people, customers and shareholders and their respective ESG concerns.
−Removed: FORM 10-K | 9
+Added: Our environmental , social and certain other governance efforts are implemented through our environmental, social and governance (“ESG”) programs, which are designed to align our approach to ESG issues with the interests of our people, customers and shareholders and their respective ESG concerns and can be found on our Investor Relations section of our website, which is located at ir.rh.com under “Governance—Environmental, Social & Governance”.
Intellectual Property
−Removed: The “RH,” “Restoration Hardware,” “RH Interiors,” “RH Contemporary,” “RH Modern,” “RH Outdoor,” “RH Baby & Child,” “RH TEEN,” “RH Beach House,” “RH Ski House,” “RH Guesthouse,” “RH Rugs,” “The World of RH” and “Waterworks,” trademarks, among others, are registered or are the subject of pending trademark applications with the United States Patent and Trademark Office and with the trademark registries of several foreign countries.
+Added: The “RH,” “Restoration Hardware,” “RH Interiors,” “RH Contemporary,” “RH Modern,” “RH Outdoor,” “RH Baby & Child,” “RH TEEN,” “RH Beach House,” “RH Ski House,” “RH Rugs,” “RH Guesthouse,” “The World of RH” and “Waterworks,” trademarks, among others, are registered or are the subject of pending trademark applications with the United States Patent and Trademark Office and with the trademark registries of several foreign countries.
Each of our trademark registrations is perpetually renewable provided that we use or continue to use the trademarks in commerce in the particular geographic market and for the goods or services covered by the registration.
1 unchanged sentence
These domain names are perpetually renewable.
+Added: 8 | FORM 10-K
We own design patents or pending design patent applications to protect the ornamental appearance of several of our products.
These design patents are valid for 15 years from their date of issuance.
−Removed: We own copyrights, including copyright registrations or pending applications, for our website and our Source Books.
+Added: We own copyrights, including copyright registrations or pending applications, for our website and our Sourcebooks.
We believe that our trademarks, domain names, design patents, and copyrights have significant value, and we vigorously protect them against infringement.
Fluctuation in Quarterly Results
−Removed: Our quarterly results vary depending upon a variety of factors, including changes in our product offerings and the introduction of new merchandise assortments and categories, changes in retail locations, the timing of Source Book releases, and the extent of our realization of the costs and benefits of our numerous strategic initiatives, among other things.
+Added: Our quarterly results vary depending upon a variety of factors, including changes in our product offerings and the introduction of new merchandise assortments and categories, changes in retail locations, the timing of Sourcebook releases, and the extent of our realization of the costs and benefits of our numerous strategic initiatives, among other things.
For example, we have historically experienced some seasonality in our business trends as our sales are typically higher in the second fiscal quarter, which correlates to a peak selling season for outdoor items and outdoor furniture.
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We are required to file or furnish annual, quarterly and current reports, proxy statements and other information as required by the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with the SEC.
−Removed: The SEC maintains a website that contains reports, proxy statements and other information about issuers, like us, who file electronically with the SEC.
−Removed: The address of that website is www.sec.gov .
−Removed: We maintain public internet sites at www.rh.com and www.restorationhardware.com and make available, free of charge, through these sites our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and Forms 3, 4 and 5 filed on behalf of directors and executive officers, as well as any amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
+Added: The SEC maintains a website that contains reports, proxy statements and other information about issuers, like us, who file electronically with the SEC at sec.gov .
+Added: We maintain public internet sites at rh.com and restorationhardware.com and make available, free of charge, through these sites our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements and Forms 3, 4 and 5 filed on behalf of directors and executive officers, as well as any amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
The charters for our Board of Directors’ Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee, as well as our Code of Business Conduct, our Corporate Governance Guidelines and Code of Ethics governing our chief executive and senior financial officers and other related materials are available on our websites.
6 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.