Restoration Hardware Holdings Inc (RH) Stores, Mix of Sale and Taste: CEO

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Restoration Hardware Holdings Inc (NYSE:RH) is a company that has shown tremendous growth in the last month and it has been increasing the outlets rapidly.

Restoration Hardware Holdings Inc (RH) Stores, Mix of Sale and Taste: CEO

Jim Cramer on CNBC looked very impressed by the growth of Restoration Hardware Holdings Inc (NYSE:RH) and he felt that the CEO of the company has a brilliant vision and has the ability to execute that vision. Cramer felt that the stores of the furniture company were simply gorgeous and unlike most of the other retailers , Restoration Hardware Holdings Inc (NYSE:RH) is moving to even larger stores.

While praising the vision of the company, Cramer welcomed Gary Friedman, CEO of Restoration Hardware Holdings Inc (NYSE:RH) and he had a lot of questions for Friedman.

Friedman explained the statement he made once that his company was the most misunderstood company on the Wall Street. Here is what he said:

“ I think for the most part, people become victims of their own history and people like history. People like data in business, but if you’re only looking backwards, you can’t look forward.”

He added that vision is everything and that he is willing to destroy today’s reality to create tomorrow’s future. Friedman said that his company focuses on doing things differently, which makes people uncomfortable.

Friedman feels that Restoration Hardware Holdings Inc (NYSE:RH) as a company is always improvising and hence it a moving target for people. According to him, Wall Street doesn’t know what to do with a $1.6 billion startup.

Cramer mentioned the conference call, the company had in which Friedman focused on the value Restoration Hardware Holdings Inc (NYSE:RH) provides to the customers. It provides the best furniture for lesser price and that accordingly to Friedman is where his company is different. He said that that the industry had companies that have sales, but no taste and companies that have taste but no sale. So Restoration Hardware Holdings Inc (NYSE:RH) is a company which brings the Sale – Taste mix and its the first company to do so.

Cramer asked why his company focused more on physical stores rather than the online business and Friedman said that the online sales business in the retail industry only accounts of about 8% of the total market share and no one worries about the 92%. He also compared the stores of his company to the other departmenatal stores and said that the stores of other companies were just not meant for humans and lacked personal touch. Not just this, the physical stores are actually more interactive as compared to the online ones.

Friedman also agreed that the concept of the such huge catalogues and sending them to people all around was not a very good idea and he said they are looking into such issues and trying to better them. However, he said that the source book (catalogue) is an important part of their business as on the internet, all stores look the same and one has to actually click more than 10000 times to actually understand the difference between Restoration Hardware Holdings Inc (NYSE:RH) and other stores.

The key investors in Restoration Hardware Holdings Inc (NYSE:RH) are Tiger Global Management Llc with about 1.9 million shares, Miura Global Management with approximately 1.7 billion shares and Eminence Capital with around 1.25 million shares as of the end of March.

Disclosure: None

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