Restoration Hardware Cuts Q1 Loss, Hires Harvey to Lead Kitchen and Tableware Merchandising
CORTE MADERA, Calif.-Huge revenue gains played a major role in reducing Restoration Hardware's first-quarter net loss from $3.7 million to $168,000.
Along with releasing its results for the quarter, which ended on May 4, the retailer announced that it has named Richard Harvey, former president of the Williams-Sonoma brand, as chief merchandising officer for its soon-to-launch RH Kitchen and Tableware.
Net revenues jumped 38.3 percent, fueled by a same-store sales gain of 41 percent. In a conference call to retail analysts yesterday, Carlos Alberini, Restoration Hardware's CEO, said this marked the 13th consecutive quarter that the retailer recorded double-digit net revenue growth. Restoration Hardware "experienced strong customer response to our product assortment and benefited from our better inventory position," Alberini said.
Selling, general and administrative expenses were up 31 percent, the result of increased employment, store openings and corporate occupancy costs. As a percentage of sales, SG&A fell 250 basis points to 32.3 percent. Gross margin was down 70 basis points to 33.8 percent, owing to strategic pricing on new product introductions, changes in product mix and higher shipping costs from a gain in furniture sales in the quarter.
In his new role, Harvey, a 30-year veteran of Williams-Sonoma who left the company in May, oversees the development of RH Kitchen and Tableware's curated collection of kitchen furniture, appliances, lighting, cookware, tools and food. The new business is being geared toward "meaningful representation" in Restoration Hardware's next-generation Full Line Design Galleries, and will be presented as a catalog to be featured at the company's website, rh.com, according to a statement. RH Kitchen and Tableware is slated to launch in late 2014.