There was so much that happened last week that we didn’t get a chance to report on RH’s stellar earnings report. We often report on sh*tty retail and so we’d be remiss not to highlight it: after all, RH crushed the home furnishing space this past quarter and fiscal year. It had record revenue, solid margins and strong go-forward guidance — despite headwinds such as tariffs (the costs of which the retailer unabashedly states will be passed on to the consumer). There were a number of interesting bits in the company’s earnings release.
In the midst of delineating successful initiatives, the company highlights:
Moving from a promotional to a membership model, elevating our brand and streamlining our business while developing a more intimate relationship with our customers.
That’s right. RH has one of the more shameful membership models out there: become a member and instantly benefit from meaningfully discounted prices. Then, forget that you became a member after your furnishing needs are satiated and continue to pay annual recurring membership fees to the retailer anyway. This annual membership isn’t like a media subscription or golf club dues: the chances of you purchasing furniture from RH every year are probably pretty low. As are the chances of you remembering to cancel your membership. Which, clearly, RH is banking on. One retailer’s promotion is another retailer’s flipped-upside-down membership model.
Second:
Opening architecturally inspiring and immersive physical experiences that render our products and services more unique and valuable, while doubling our retail revenues and earnings in every market.
