From CoStar GroupNice to hear a major national retailer these days say that real estate is key to its transformation, as did Carlos Alberini, CEO of Restoration Hardware Holdings.
"The transformation of our real estate remains a key to unlocking the 'true value' of our assortment. This is one of our highest priorities for the company and it's core to our long-term growth strategy," Alberini said on his first quarter earnings conference call last month. "We are still in the very early stages of this transformation."
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RH Gallery store in Boston.
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Restoration Hardware's strategic initiatives to open larger stores - and more of them - runs counter to many other retailers' moves in the opposite direction.
Restoration Hardware currently is in negotiations for sites in 30 markets in North America, including New York, Chicago, Miami, Denver, Nashville, New Orleans and San Diego, among others. It plans to open Full Line Design Galleries in Greenwich, Connecticut, and Atlanta in 2014, with store openings expected to increase in 2015. This quarter it will also open its third furniture store near Dallas.
Alberini said no one should be surprised to see it opening anywhere north of 10 to 15 new stores in any particular year.
It will also complete the expansion of its Ohio shelf stock facility as it continues to make progress with an in-home delivery initiative and is on-track to have in-sourced hubs in seven of its top markets by the end of this year.
"We are receiving overwhelming support and interest from the landlord community, with offers to become an anchor tenant in several of the most prestigious shopping centers in North America," Alberini said, adding the firm returned from the ICSC Conference in Las Vegas with a robust deal pipeline.
"These anchor tenant deals will provide opportunities for higher sales, increased turnings, lower capital investment and higher ROIC than previously expected in our initial target store economics," he said.
"They also provide for increased square footage to accommodate the continued expansion of our core assortment, our Small Spaces Collection, Baby & Child, Objects of Curiosity, as well as any future new businesses we are considering."
