Restoration Hardware’s new incarnation seeks to restore retailer’s luster

After nearly a year and a half of construction at University Village, upscale furnishings retailer Restoration Hardware on Friday is opening RH Seattle, the eighth expansive, multilevel store the company says represents its current identity and future direction.

The store spans 60,000 square feet of retail space on three interior floors and a rooftop, occupying the entire building just north of Restoration Hardware’s current store. (That smaller store will now close, and Williams-Sonoma is expected to move into the space early next year.)

From a grand double staircase to French doors and windows, numerous chandeliers and a rooftop terrace, RH Seattle is meant not only to showcase the products sold by the company but also to inspire homeowners in the design of their own dwellings, executives say.

Furnishings start at $1,050 for beds and $1,150 for sofas.

For California-based Restoration Hardware, which has rebranded itself as “RH” and is in the process of legally changing its name, these next-generation stores “are really a reflection of the new brand and business that we’ve built,” said Gary Friedman, chairman and CEO. “Our legacy stores were built for a different company and not the company we’ve transformed Restoration Hardware into.”

In its early years, the company, which went public in 1998, emphasized nostalgia-tinged hardware and fixtures.

When Friedman came to the company in 2001, it was on the edge of bankruptcy and “over 50 percent of the business was ‘discovery items’ — mostly nostalgic items that were curated from the past,” he said. The business had a little bit of furniture but really emphasized hardware and fittings — “things you could’ve bought at almost any store,” he said.

The company began slowly repositioning itself, most notably in 2008, as the economy collapsed.

Counterintuitively, executives decided to strengthen its focus on the high end of the market, where they believed the most opportunity lay to provide furnishings with good taste at a large scale.

“At that point, I looked at the team and said: ‘There are a lot of people who aren’t going to make it through this. We may be one of them. If we’re going to go down, let’s go down in style and have them remember us. Our current customer is not buying. Let’s move more quickly to transform the business,’” said Friedman.

The company survived, went private in 2008 and then public again in 2012, but it has not put all its woes behind it.

Its shares are trading about 60 percent lower than a year ago, as profits fell and production woes plagued deliveries of its recently launched line of RH Modern contemporary furnishings.

The company also recently moved to replace its sales events with a $100-a-year membership program that gives customers a 25 percent discount, but benefits to the company’s bottom line won’t be seen for a while.

The retailer is hoping to turn things around with more emphasis on its new identity as a “fully integrated design platform for the higher end of the market,” as Friedman puts it, offering a selection of furnishings, fixtures, art and other home goods, as well as a greatly expanded interior-design service.

The company has redesigned its catalogs, is doubling the size of its design team, will be introducing RH Modern across all its stores, and is planning to eventually transform all its legacy stores.

RH Seattle, like the other new stores, is meant to integrate all these new directions the company is taking.

The design atelier at RH Seattle, for example, boasts an expansive space where customers can engage the services of the interior-design staff, or come in with their own designers to plan in the store’s workspace.

The company’s goal is to have one of these new-style stores, which are “significantly more profitable than the ones they replace,” in every major market — about 50 or 60 over the next seven years or so.

RH Seattle also plays to University Village’s niche as a home-furnishings hub, with Pottery Barn, Crate & Barrel, Room & Board and The Land of Nod among the shopping center’s stores geared toward the home.