Home furnishings seller Restoration Hardware, now known simply as “RH,” will soon break ground on a new Corte Madera store and restaurant combination that exemplifies the company’s strategy and the daring but risky bets it’s making on the future of high end retail.
The Town of Corte Madera has approved nearly every aspect of the company’s proposed “RH Gallery” building at the north end of the Village shopping center adjacent to Highway 101, and on June 4 the town council will likely approve the last bits of the application required – two permits to move more than 1,000 cubic yards of soil during construction – according to Corte Madera Senior Planner Phil Boyle, who’s worked three years on the project.
Alexandra McClure, a spokeswoman for RH, declined to comment on the Marin County project, but statements made in company filings and analysis by outside watchers indicate the 18,633-square-foot building, which will include a fancy restaurant on the top floor, is another big step forward in RH’s quest during which it has taken on nearly $600 million in debt to transform itself into a high end “destination” retailer.
Selfies and wedding bells
Following on the success of a similar store-restaurant combination opened in Chicago late in 2015, Restoration Hardware, led by CEO Gary Friedman, a veteran of Gap Inc. and Williams-Sonoma Inc., made last minute changes to the design of the Corte Madera store based on the performance of that Chicago RH Gallery. In March, RH told Corte Madera it wanted to shrink the store’s “footprint” from the already-approved 24,355 square feet and to move the restaurant from the ground floor to the third floor.
Corte Madera approved those changes in April, said city planner Boyle, who noted that all the proposed alterations came from the company, based on analysis of customer traffic patterns at the Chicago location. According to company SEC filings, the restaurant at the Chicago store had $5 million in sales in 2016, and more than 50 wedding proposals were made at the store. RH said the Chicago eatery was “the 7th most Instagrammed café in the country” in 2017.
Restoration Hardware opened two other stores based on the Chicago model in 2017, one in Toronto and another in West Palm Beach, Fla. Another RH Gallery complex opens next month in Nashville. The Corte Madera complex is slated for completion late in 2019, based on a July start date for construction, said Boyle.
RH’s existing store at the Village mall is about 8,815 square feet, far less than half the size of the proposed RH Gallery, showing how serious the company is about throwing out its old retail strategy and reinventing itself.
CEO Friedman has led the charge to reinvent RH’s retail strategy, moving away from the company’s phone-book-sized mail order catalogs, which rivaled the “Vogue” September issue in weight, and its smaller stores enclosed inside malls. Friedman has overseen the adoption of a premier membership model, where frequent customers can pay $100 a year to get discounts on big purchases as well as other perks.
Restoration Hardware, or Restaurant Hardware?
But will people who visit a store or restaurant to propose marriage or to eat a good meal end up buying furniture there, too?
Is “buzz” on social media something that translates automatically into better sales? That’s a question many retailers have struggled to answer.