Anyone that identifies as a member of Gen X likely remembers the rise of home decor store Restoration Hardware (RH) in malls in the late '90s.
Often considered to be a direct competitor to Williams Sonoma (WSM) Pottery Barn, but sporting a chic, New York-inspired aesthetic rather than an elegant country living approach, Restoration Hardware was a popular choice for those who preferred more modern-looking furniture.
But Restoration Hardware failed to compete effectively in the home goods space, and it was rebranded as RH in 2012 after renaming its stores "galleries" and dialing up both the price tags and design of its offerings.
It also released a 3,000 page catalog in 2014 called the Source Book, which made it clear that the company was aiming for a high-end, wealthy audience.
Despite a round of layoffs in 2020, RH is still finding its way, with CEO Gary Friedman waxing ambitious about the company's future plans. And now one of those strategies has found form, and it looks like a fascinating venture indeed.
Restoration Hardware
So Now There's a RH 'Guesthouse'
In an unusual move for a home goods company, RH has announced it has opened what it calls the RH Guesthouse in Manhattan's Meatpacking District.
The brand insists this is not a hotel, but a "hotel-like concept" that offers three suites, six guest rooms, and one full floor residence, each with private entrances. It also has a private rooftop infinity pool, a dining terrace, and two restaurants called The Dining Room and The Champagne and Caviar Bar.
The guesthouse is for adults only (no children or pets are allowed) and, perhaps the most interesting of all, RH forbids guests to post photos of the property on social media as a means to preserve guest privacy.
The inside of RH Guesthouse looks very much like it was plucked out of the pages of an RH Source Book, but perhaps most interesting is that not a single bit of the furniture inside the building is RH. Instead the space is packed with bespoke furnishings that sing of luxury, like cashmere-upholstered sofas, 11-foot ceilings, and Italian linens and fixtures.
Friedman describes it as "creating a new market for travelers seeking privacy and luxury."
“I think privacy is the one thing everybody’s given away with social media, and it’s one thing that the Internet has taken away, because you can Google anything about everybody," he said. "I think that there’s going to be a desire to find your place, to be in that place that’s special to you that gives you that level of privacy, exclusivity, and level of luxury that you just can’t find anywhere else.”
RH's Vision For An Ecosystem
Friedman promised back in 2020 in a letter to shareholders that RH Guesthouse was part of a large-scale plan to expand into the $200 million North American hotel market.
"Our ecosystem will come full circle as we begin to conceptualize and sell spaces, moving the brand beyond the $200 billion home furnishings market into the $1.7 trillion North American housing market by offering beautifully designed and furnished turnkey homes and condominiums with the introduction of RH Residences,” Friedman wrote.
“We believe the ecosystem can be expanded globally, multiplying the market opportunity to approximately $7 to $10 trillion, quite possibly one of the largest and most lucrative addressed by any brand in the world today. A one percent share of the global market represents a $70 to $100 billion opportunity."
