Alberini Steps Down at Restoration Hardware; Q3 Net Skyrockets
CORTE MADERA, Calif.-Carlos Alberini has resigned as co-CEO of Restoration Hardware, and has accepted the position of chairman and CEO of Lucky Brand.
Alberini will remain on the Restoration Hardware board. His new post will take effect when the acquisition of Lucky Brand by Leonard Green & Partners is closed. In a conference call yesterday with financial analysts, Alberini said his new position is "an opportunity that I believe will allow me to fulfill my lifelong dream to run and build a company." He will stay with Restoration Hardware until Jan. 31 and assist with the transition.
Gary Friedman, Restoration Hardware's chairman and co-CEO, said the company will begin shortly to search for Alberini's successor.
The announcement of Alberini's departure came at the same time as the company's statement on its third-quarter financial results. For the quarter, which ended on Nov. 2, the retailer reported net income of $9.5 million, up 466.7 percent from last year's third quarter.
The bottom line swelled due to a 39.3 percent increase in net sales, which totaled $395.8 million. This included a gain of 29 percent in same-store sales and a 47 percent increase in direct revenue. During the conference call, Friedman attributed the results to the company's "ability to innovate, curate and integrate new products, businesses and experiences, and then present them in our own unique and distinctive point of view.
"Our business continues to greatly outpace others," Friedman continued, "and we believe is disrupting the large and highly fragmented luxury home furnishings market."
Although gross margin dollars jumped 38.2 percent, gross margin as a percentage of sales declined 30 basis points to 35.6 percent. Selling, general and administrative expenses increased 17.1 percent in dollars but fell back 570 basis points as a percentage of sales, to 29.5 percent.
Looking ahead, Friedman told the analysts that Restoration Hardware's model--which now combines its source book, Full Line Design Galleries and its online business--"will create a superior platform for growth and long-term competitive advantage." Regarding the galleries, Alberini added that Restoration Hardware sees opportunities to open 60 to 70 new locations in North America. "These larger-format stores will allow us to showcase more of our growing product assortment," he said.