The Napoleon of Your Dwelling Room

Gary Friedman hates conferences. A 66-year-old with apparently limitless vitality and a perpetual tan, Mr. Friedman is the chief govt of RH, one of many nation’s largest high-end furnishings sellers, and he by no means holds conferences. As a substitute, he convenes “adventures.”

To the untrained eye, these look and sound rather a lot like conferences. However there’s a distinction. Adventures can final 10 hours, or extra.

That’s a typical stretch for Mr. Friedman’s adventures together with his structure and design crew, a gaggle of about 20 executives overseeing one of many priciest expansions within the historical past of American retail. The corporate is doubling the variety of shops, known as “galleries” in RH converse, with 35 new ones within the works. Many will value $20 million or extra.

RH offered $3 billion value of merchandise final 12 months, however Mr. Friedman’s objective isn’t just to maneuver $10,000 sectional sofas, most of them in earth tones and a method that might be known as California Wealthy. He needs to forge a model that’s so ubiquitous — RH eating places, RH accommodations, RH clothes — that its affect is international.

“I don’t actually discuss our imaginative and prescient for the corporate to Wall Road as a result of they could lock me up,” Mr. Friedman mentioned one latest afternoon, sitting in an RH restaurant not removed from headquarters in a suburb of San Francisco. “However our imaginative and prescient is to create an infinite reflection of hope, inspiration and love that may ignite the human spirit and alter the world.”

If this sounds a tad grandiose for a man peddling sideboards and occasional tables, you haven’t hung out with Gary Friedman. He’s not a standard businessman. He’s extra just like the extremely demanding head of a home-furnishings-based cult, full with its personal Bible (these 350-page shiny catalogs that flip up in your mailbox), terminology (“adventures,” “galleries,” “RH guidelines”) and catechism (“This isn’t our job, that is our life,” reads one of many RH guidelines). Complete dedication is required of underlings. Something much less can deliver scolding rebukes.

Mr. Friedman grew to become the chief govt of what was then known as Restoration {Hardware} in 2001, when it was a virtually bankrupt vendor of midpriced furnishings and Americana-themed tchotchkes, like Slinkys and Moon Pies. By driving the model to “climb the posh mountain,” as he places it, he made it a spot the place aspirational consumers might attain for furnishings a little bit outdoors their price range. Throughout the pandemic-era renovation craze, the corporate was value $15.5 billion.

However RH is now struggling by way of a grinding downturn, its market worth off 70 p.c since its 2021 peak. Almost each participant within the furnishings enterprise is slumping, largely as a result of the good engine of gross sales — new residence purchases — has stalled. Whereas opponents pull again, or lean into on-line gross sales, Mr. Friedman is within the midst of a dangerous, full-tilt constructing spree. Together with these immense and stately shops, he’s galloping into the true property enterprise, planning furnished flats and homes in locations like Aspen and Napa.

The purpose for Mr. Friedman, an inveterate optimist, is to arrange for the growth that he believes will ensue when rates of interest go down. He additionally needs to broaden RH’s attraction past the upwardly cell who at the moment are its core prospects and pitch the model to the ultrarich. Therefore extra RH eating places, with most important programs that embody such decadence-signaling dishes as a $125 grilled Wagyu rib-eye steak.

And as if to show that his ambitions are actually Napoleonic, the corporate is now invading Europe. Final 12 months it unveiled its first retailer in Britain, a renovated 400-year-old, Downton Abbey-like manse in Oxfordshire, with eating places, a tea salon, a wine lounge and what seems to be a taxidermy unicorn. Up subsequent are shops in Madrid, Milan, London and Paris.

“Gary is an excellent man, however his ambitions have run away with him,” mentioned Pamela Danziger, the founding father of Unity Advertising and marketing, a market analysis agency. “To open in England, France and all these different locations — I feel he’s simply put method an excessive amount of in entrance of him. As a result of he’s acquired issues now within the U.S. market, and that’s the place he must put his horsepower.”

Mr. Friedman relishes nothing fairly a lot because the suggestion that he’s overreaching. He made this level, and plenty of others, in our interview, which changed into a nine-hour journey. A largely uninterrupted monologue, it began at lunch in a single RH restaurant, ended over dinner at one other and lined the story of his life, which started in San Francisco, the place he was raised by a widowed mom who struggled with psychological sickness.

At present, his web value is $1.5 billion, in line with a Forbes estimate. Final 12 months, he purchased a $26.7 million oceanfront home in Malibu, Calif., and some months later purchased a second home on the identical seashore for $28.5 million. His marriage to an Australian singer was celebrated with 272 friends over 4 days final summer season on the Mediterranean island of Ibiza.

Like his idol, Ralph Lauren, he’s the strolling, speaking embodiment of his model, which in his case means dressing like certainly one of his sofas, in muted tones and dear materials. He has an improbably easy face and dramatically upswept hair that’s graying on the edges. He’s keen on Brunello Cucinelli clothes and wears a wristlet engraved with “Imagine” — Italian sensible informal meets New Age.

Mr. Friedman’s journey from a childhood of meals stamps to stratospheric wealth has left him with a finely tuned understanding of the dynamics of striving. It additionally left him with a little bit of a chip on his shoulder. His shareholder letters might be known as “Notes From an Underdog,” crammed as they’re with triumphalist musings in regards to the joys of ignoring his doubters.

“We averted chapter whereas being accused of lunacy,” he wrote in a letter final 12 months. “Quickly the world shall be inside our attain.”

Few corporations are higher at exploiting the American obsession with affluence than RH. It sells the type of modern, oversize furnishings seen on tv reveals like “Succession” and does it by way of a singular type of experiential buying. With their hovering ceilings and Zen atmosphere, RH showrooms are a daydreamer’s fantasy of a billionaire’s residence.

Possibly you’re not a hedge fund skilled, the décor says, however you should purchase a hedge fund skilled’s drapes.

“Gary discovered a distinct segment that no one had exploited within the residence furnishings area,” mentioned Warren Shoulberg, a former editor of Residence Furnishings Information, a commerce publication. “The wannabe wealthy.”

The twist, retail advertising and marketing consultants say, is that RH isn’t truly a luxurious model. Within the business argot, it’s premium, which suggests it’s costlier than rivals like Crate & Barrel and West Elm however lower than the bespoke choices offered in designer showrooms the place solely inside decorators can purchase. These showrooms are full of handmade furnishings, lighting and rugs from Italy, France and home hubs like North Carolina. They value extra, last more and maintain extra of their resale worth. Against this, RH furnishings is essentially mass-produced in international locations equivalent to China, Vietnam and Indonesia.

“Most individuals within the design business have a look at RH as fancier West Elm,” mentioned Jason Campbell, an inside designer in Manhattan. “But it surely’s nonetheless fairly costly. I regarded for a sectional couch for a consumer not too long ago and was shocked to see one from RH for $14,000. You possibly can purchase one thing related at a designer showroom for a smidgen extra, and it wouldn’t be made in China.”

That is the RH technique: Promote a premium product in a setting so dazzling that it appears value near-luxury costs.

The corporate has zero presence on social media for roughly the identical motive {that a} hip bar doesn’t have a door signal. (“There’s no college for cool” is certainly one of RH’s official ideas.) Nonetheless, unbidden and unpaid endorsements are commonly supplied by celebrities, together with Kerry Washington and Kendall Jenner, who’ve raved in interviews in regards to the Cloud Couch, an RH staple that at present begins at about $4,800.

RH is continually in search of novel methods to construct mystique. The corporate’s web site doesn’t publish photographs of the rooms in its first resort, in Manhattan’s meatpacking district, the place rooms begin at $2,200 an evening. And the one option to e-book a keep is to inquire through e mail. On a latest tour, a supervisor confirmed off the minibars, which characteristic crudités, an assortment of sliced meat and a contemporary baguette that’s changed each two hours.

Far pricier RH productions are within the works. Its plans in Aspen embody branded accommodations and RH Residences, the corporate’s first foray into absolutely furnished stand-alone homes.

“We might promote these houses, however we might additionally handle these houses,” Mr. Friedman mentioned. RH would assist hire the homes when consumers weren’t utilizing them, and pocket half the rental revenue.

That is the place the true scale of Mr. Friedman’s drive comes into focus. He’s eyeing the multitrillion-dollar market in luxurious turnkey houses and condominiums all over the world. RH want seize solely a tiny slice of that and its worth will soar, he mentioned, to $70 billion or extra.

Analysts are skeptical. “It’s extraordinarily unlikely that RH will ever get a fabric share of this market,” Seth Basham of Wedbush Securities mentioned. “Gary’s a giant dreamer.”

RH has taken on a major quantity of debt, leaving it with little margin for error, Mr. Basham added. Three years in the past, the corporate took out a $2 billion mortgage and used it to purchase again its personal shares. “We’re having a bet on ourselves and our future,” Mr. Friedman mentioned.

If gross sales fall and spending continues, Mr. Basham mentioned, the corporate’s future might begin trying dicey. However Mr. Friedman has by no means shied away from danger, and he can’t cease barreling into all types of latest ventures. It’s an impulse that has yielded some memorable flops.

Like RH Up to date Artwork. In 2013, the corporate leased a 28,000-square-foot area within the Chelsea neighborhood of Manhattan and recruited a roster of artists. Artnet known as it “one of many extra curious incursions into the artwork sphere” when it closed about two years later.

“Powerful enterprise mannequin,” Mr. Friedman mentioned in our interview. “You’ve acquired this great point, however you’ll be able to solely promote certainly one of them.”

‘Love Us or Depart Us’

Mr. Friedman takes a marathoner’s strategy to work, and he expects colleagues to match his stamina.

“He’ll meet me at 1 a.m. at certainly one of our factories in Vietnam,” mentioned Nicholas Condos, whose furnishings firm, Harbour, has offered greater than a dozen collections by way of RH. “And he’ll wish to work till 5 a.m. Nobody is prepared to say, ‘Can we go residence?’”

Veterans of the corporate say they rapidly undertake a brand new sense of what hard-core dedication means. Eri Chaya, who’s RH’s chief artistic and merchandising officer, figured this out at her job interview with Mr. Friedman in 2006. The dialogue lasted three hours and included this stunning query: What are you prepared to battle and die for?

“I had a sense after I first met him,” Ms. Chaya mentioned, “that it is a human like no different.”

For years, the annual management assembly included a ceremony whereby executives signed a contract affirming such sentiments as “I’ll constantly destroy my very own actuality to create tomorrow’s future for myself and my teammates,” then described methods they could have fallen quick.

That ceremony has been changed by the Day by day Values Journey. It begins at 10 a.m. each day and is formed by subject sentences equivalent to “Share a time when your ego acquired in the way in which of discovering a greater method.”

Amongst some executives, Mr. Friedman’s nickname is “The Solar” — an individual who offers off a heat glow on good days and burns you on unhealthy ones. The corporate’s office tradition earned a D-minus from Comparably, which collects nameless scores from present staff. Simply 22 p.c of respondents mentioned they’d suggest the corporate to a pal; 67 p.c mentioned they’d not, putting it within the backside 10 p.c of corporations of comparable dimension.

Mr. Friedman is unbothered by this sort of suggestions. The maxims he wrote for the corporate embody “Love us or go away us.” Loads of folks, he famous, stick round for years, and others who’ve give up later returned, having discovered life elsewhere a little bit boring.

When underlings have come up quick, he has been identified to lash out, an inclination he claims to dislike and candidly acknowledges.

“Typically, I don’t yell at folks — I yell on the drawback,” he mentioned. “When you step in entrance of the issue and defend the issue, you may really feel attacked.”

‘Gary Hole’

By his personal account, Mr. Friedman is an unlikely arbiter of high-end residence furnishings style as a result of he grew up with out furnishings.

Mr. Friedman’s father was a onetime service provider marine and barber who died of a coronary heart assault when Mr. Friedman was 5. His mom, now deceased, struggled with schizophrenia and bipolar dysfunction, Mr. Friedman mentioned, and was typically unable to work. He mentioned the pair had lived in additional than a dozen tiny flats by the point he was 16.

“Our prized possession was a little bit black-and-white TV with large bunny ears,” he mentioned. “It’s the one factor that all the time went with us.”

At 18, he enrolled at Santa Rosa Junior School and flailed badly sufficient in his first 12 months {that a} counselor advised him that he was losing taxpayer cash. He dropped out and have become a full-timer at a Hole retailer the place he was so dutiful and keen as a inventory boy that colleagues known as him “Gary Hole.” On days off, he typically drove an hour and a half to the company headquarters in San Bruno, Calif., to fold shirts and sweep the ground at a small showroom known as Retailer One.

He was there someday in 1983 when Mickey Drexler, who was the Hole’s president, gave an impromptu speech within the lunchroom. Mr. Drexler requested the roughly 200 assembled staff a query, and Mr. Friedman blurted out the reply.

“For the lifetime of me, I can’t bear in mind what he requested, however the spirit moved me,” Mr. Friedman mentioned. “And Mickey mentioned: ‘That’s proper. That’s precisely proper.’”

Mr. Drexler requested for this chipper younger man’s identify and job title, and the following day his secretary known as to ask Mr. Friedman to a C-suite assembly. Mr. Friedman arrived at headquarters 45 minutes early sporting a freshly steamed white shirt. In a wood-paneled room full of the corporate’s prime executives, Mr. Drexler gave his new cost an task.

“I needed an goal individual’s expertise with actual prospects,” recalled Mr. Drexler, who immediately is chief govt of Alex Mill, a style model began by his son. “So I mentioned, ‘I need you to be the suggestions individual on these govt conferences.’ He had good vitality, I felt the vitality and I favored him.”

Mr. Friedman grew to become, at 25, the youngest regional supervisor on the Hole and was later recruited by Williams-Sonoma as a senior vice chairman of shops and operations.

He soared at Williams-Sonoma. Throughout his years as president of Pottery Barn, a Williams-Sonoma subsidiary, the corporate grew from a $50 million-a-year operation centered on tableware and kitchen equipment to a greater than $1 billion-a-year vendor of residence furnishings.

However 13 years into his run, Mr. Friedman, then 43, was handed over for the job of chief govt. “It broke my coronary heart,” he mentioned.

In a matter of days, he joined Restoration {Hardware} as chief govt, and helped increase a badly wanted infusion of $15 million from buyers, together with practically $5 million of his personal cash. On the time, Restoration was a publicly traded firm that was flirting with chapter. Quickly, Mr. Friedman was phasing out the classic staplers and phasing within the upscale daybeds.

“He all the time had a really clear standpoint,” mentioned Bonnie Orofino, who joined Restoration {Hardware} the 12 months earlier than Mr. Friedman and stayed on till 2016 as chief merchandising officer. “We spent a variety of time speaking about ‘the white area’ — one thing above Pottery Barn however under skilled designers.”

For years, the corporate tottered near monetary peril and went personal in 2008. 4 years later, it went public once more, an occasion that overlapped with a public relations catastrophe. In August 2012, Mr. Friedman stepped down as co-chief govt after an inside investigation discovered that he’d had an inappropriate relationship with a 26-year-old feminine worker.

In Mr. Friedman’s telling, he didn’t do something improper. “I used to be single, I met any individual at work, God forbid,” he mentioned. “Lots of people meet at work and fall in love.” The girl, he mentioned, left the corporate after they began relationship.

Mr. Friedman wouldn’t identify this lady, nor would any of his present or former colleagues. Her model of those occasions isn’t publicly identified. After a 10-month hiatus, Mr. Friedman returned to his job.

Within the 2010s, the corporate pivoted from common shops to extravagantly renovated landmarks — the onetime Museum of Pure Historical past in Boston, a 60-room Palladian-style villa in Indianapolis — with no money register in sight. It was a decisive step towards changing into a life-style slightly than only a retailer. Traders noticed a winner. In 2019, shares had been buying and selling at $150, and by August 2021 that they had climbed to $750, as Covid incited a house renovation craze.

However like many retailers, RH had provide chain points, and it raised costs too aggressively, the corporate mentioned in an earnings name. Shares fell under $214 late final 12 months. The Europe plans had been already in movement, although, and Mr. Friedman has not backed off them.

At RH headquarters, there’s a full-scale mannequin of the rooftop restaurant for an RH retailer set to open someday in 2025 in Paris, close to the Champs-Élysées. This model is made with Styrofoam tables and plenty of place-holding silverware, glasses and chairs. Immense pictures of the town are plastered on partitions, designed to breed the view that diners will see. It’s principally a tough draft you’ll be able to sit in.

“You don’t get a second probability to make a primary impression in Paris,” Mr. Friedman mentioned.

RH hopes to prosper in the identical skinny air breathed by Chanel, Hermès and Gucci, a realm that appears downright hostile to American manufacturers. Aside from Tiffany and Ralph Lauren, few have succeeded within the cradle of luxurious retail. And RH emerged from the least refined of settings. It has roots within the U.S. mall, the place it supplied ornamental equipment and reasonably priced nostalgia. Mr. Friedman is fairly certain these storied European manufacturers are trying down on the corporate.

“We’re not from their neighborhood,” he’s fond of claiming, “nor invited to their events.” If the previous is any indication, he’s not ready for an invite. He’ll throw a shindig of his personal.