Restoration Hardware 2Q17 Earnings Call Notes

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Gary Friedman – Chairman & CEO

Teams are buttoning down the hatches in Florida

“as it relates to the Florida market. Our teams are buttoning down the hatches everybody is prepared for the storm and so we don’t have any more information than anybody else does at this point to know, to know the business impact in Florida.”

Membership model?

“Really because we’re the only specialty retailers ever done this, outside of Amazon and Costco and a few others we’re the only one made a move to membership that didn’t start out with membership this way and there is no benefit in us creating a roadmap for anybody else follow-up. So we’re not going to say a lot about membership other than the fact that we made a very brave move, a lot of people thought it wasn’t going to work. We’re in a position to tell you today that it is working and the renewal rates are positive. And the membership growth is positive. So other than that we don’t need to get anybody else a roadmap to simplify their business and gain the benefits that we are going to gain over the next couple of years because of that.”

Department stores have been dying forever

” Amazon is wrongly accused right, the department stores have been dying forever. It’s been a slow deferment from a lack of innovation and from very rigid business models that couldn’t adapt and innovate.”

You have to think of us as 7 years old

“you really have to think about this company like a relative new company we are really like 7 years old. I got here in 2001 and the company $20 million market cap is about ready to go bankrupt. We had to raise money three times to kick the company out of bankruptcy. And for the first — for the first five to seven years we were just on the edge of bankruptcy trying to make it. And we took the company from a $300 million, losing $40 million a year to $700 million making $40 million a year. And we’re taking the company private, and then, the economy collapsed in 2008 and 2009 and that set us back to $500 million company losing money again, right? And then, we came out of that really in 2010 as when we made it the significant pivot to the luxury and to the market and really emerged as the kind of a new company if you will.”