The Napoleon of Your Living Room

Gary Friedman hates conferences. A 66-year-old with apparently limitless power 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. Instead, he convenes “adventures.”

To the untrained eye, these look and sound loads like conferences. But 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 group, a gaggle of about 20 executives overseeing one of many priciest expansions within the historical past of American retail. The firm is doubling the variety of shops, known as “galleries” in RH communicate, with 35 new ones within the works. Many will value $20 million or extra.

RH bought $3 billion price of merchandise final 12 months, however Mr. Friedman’s purpose is not only to maneuver $10,000 sectional sofas, most of them in earth tones and a method that could possibly be known as California Rich. He needs to forge a model that’s so ubiquitous — RH eating places, RH resorts, RH clothes — that its impression is world.

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

If this sounds a tad grandiose for a man peddling sideboards and coffee tables, you haven’t frolicked with Gary Friedman. He’s not a traditional businessman. He is 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). Total dedication is required of underlings. Anything much less can deliver scolding rebukes.

Mr. Friedman turned the chief govt of what was then known as Restoration Hardware in 2001, when it was an almost 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 may attain for furnishings a bit outdoors their funds. During the pandemic-era renovation craze, the corporate was price $15.5 billion.

But RH is now struggling by a grinding downturn, its market worth off 70 % since its 2021 peak. Nearly each participant within the furnishings enterprise is slumping, largely as a result of the nice engine of gross sales — new residence purchases — has stalled. While rivals pull again, or lean into on-line gross sales, Mr. Friedman is within the midst of a dangerous, full-tilt constructing spree. Along with these immense and stately shops, he’s galloping into the actual property enterprise, planning furnished residences and homes in locations like Aspen and Napa.

The level for Mr. Friedman, an inveterate optimist, is to organize for the increase that he believes will ensue when rates of interest go down. He additionally needs to broaden RH’s enchantment past the upwardly cellular who at the moment are its core prospects and pitch the model to the ultrarich. Hence extra RH eating places, with fundamental programs that embrace 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. Last 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,” stated Pamela Danziger, the founding father of Unity 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. Because he’s bought 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.

Today, his web price is $1.5 billion, based on a Forbes estimate. Last 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 visitors over 4 days final summer time 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 one among his sofas, in muted tones and expensive materials. He has an improbably easy face and dramatically upswept hair that’s graying on the edges. He’s a fan of Brunello Cucinelli clothes and wears a wristlet engraved with “Believe” — 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 could possibly be known as “Notes From an Underdog,” stuffed 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. “Soon the world might be inside our attain.”

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

Maybe 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 house,” stated Warren Shoulberg, a former editor of Home Furnishings News, a commerce publication. “The wannabe wealthy.”

The twist, retail advertising consultants say, is that RH isn’t really a luxurious model. In the trade argot, it’s premium, which implies it’s costlier than rivals like Crate & Barrel and West Elm however lower than the bespoke choices bought in designer showrooms the place solely inside decorators should purchase. Those showrooms are stuffed with 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. By distinction, RH furnishings is basically mass-produced in international locations comparable to China, Vietnam and Indonesia.

“Most individuals within the design trade take a look at RH as fancier West Elm,” stated Jason Campbell, an inside designer in Manhattan. “But it’s nonetheless fairly costly. I appeared for a sectional couch for a shopper lately and was shocked to see one from RH for $14,000. You may purchase one thing comparable at a designer showroom for a smidgen extra, and it wouldn’t be made in China.”

This is the RH technique: Sell a premium product in a setting so dazzling that it appears price near-luxury costs.

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

RH is continually searching for novel methods to construct mystique. The firm’s web site doesn’t publish photographs of the rooms in its first lodge, in Manhattan’s meatpacking district, the place rooms begin at $2,200 an evening. And the one approach to e-book a keep is to inquire by way of electronic mail. On a latest tour, a manager 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 embrace branded resorts and RH Residences, the corporate’s first foray into totally furnished stand-alone homes.

“We would promote these properties, however we might additionally handle these properties,” Mr. Friedman stated. RH would assist lease the homes when patrons weren’t utilizing them, and pocket half the rental revenue.

This is the place the true scale of Mr. Friedman’s drive comes into focus. He’s eyeing the multitrillion-dollar market in luxurious turnkey properties and condominiums world wide. RH want seize solely a tiny slice of that and its worth will soar, he stated, 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 stated. “Gary’s an enormous dreamer.”

RH has taken on a big 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 stated.

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

Like RH Contemporary Art. In 2013, the corporate leased a 28,000-square-foot house 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.

“Tough enterprise mannequin,” Mr. Friedman stated in our interview. “You’ve bought this great point, however you possibly can solely promote one among them.”

‘Love Us or Leave 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 one among our factories in Vietnam,” stated Nicholas Condos, whose furnishings firm, Harbour, has bought greater than a dozen collections by RH. “And he’ll wish to work till 5 a.m. No one 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 shocking query: What are you prepared to struggle and die for?

“I had a sense after I first met him,” Ms. Chaya stated, “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 repeatedly 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 Daily Values Adventure. It begins at 10 a.m. on daily basis and is formed by matter sentences comparable to “Share a time when your ego bought in the best way of discovering a greater method.”

Among some executives, Mr. Friedman’s nickname is “The Sun” — an individual who provides off a heat glow on good days and burns you on unhealthy ones. The firm’s office tradition earned a D-minus from Comparably, which collects nameless rankings from present staff. Just 22 % of respondents stated they might suggest the corporate to a good friend; 67 % stated they might not, inserting it within the backside 10 % of firms of comparable measurement.

Mr. Friedman is unbothered by this sort of suggestions. The maxims he wrote for the corporate embrace “Love us or go away us.” Plenty of individuals, he famous, stick round for years, and others who’ve stop later returned, having discovered life elsewhere a bit uninteresting.

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

“Generally, I don’t yell at individuals — I yell on the drawback,” he stated. “If you step in entrance of the issue and defend the issue, you would possibly really feel attacked.”

‘Gary Gap’

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 stated, and was typically unable to work. He stated the pair had lived in additional than a dozen tiny residences by the point he was 16.

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

At 18, he enrolled at Santa Rosa Junior College 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 Gap retailer the place he was so dutiful and keen as a inventory boy that colleagues known as him “Gary Gap.” 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 Store One.

He was there at some point in 1983 when Mickey Drexler, who was the Gap’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 stated. “And Mickey stated: ‘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 stuffed with the corporate’s high executives, Mr. Drexler gave his new cost an project.

“I needed an goal particular person’s expertise with actual prospects,” recalled Mr. Drexler, who in the present day is chief govt of Alex Mill, a vogue model began by his son. “So I stated, ‘I need you to be the suggestions particular person on these govt conferences.’ He had good power, I felt the power and I appreciated him.”

Mr. Friedman turned, at 25, the youngest regional manager on the Gap and was later recruited by Williams-Sonoma as a senior vice chairman of shops and operations.

He soared at Williams-Sonoma. During 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.

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

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 almost $5 million of his personal cash. At the time, Restoration was a publicly traded firm that was flirting with chapter. Soon, Mr. Friedman was phasing out the classic staplers and phasing within the upscale daybeds.

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

For years, the corporate tottered near monetary peril and went non-public in 2008. Four 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 unsuitable. “I used to be single, I met anyone at work, God forbid,” he stated. “Lots of people meet at work and fall in love.” The lady, he stated, left the corporate after they began courting.

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.

In the 2010s, the corporate pivoted from common shops to extravagantly renovated landmarks — the onetime Museum of Natural History in Boston, a 60-room Palladian-style villa in Indianapolis — and not using a money register in sight. It was a decisive step towards turning into a way of life reasonably than only a retailer. Investors noticed a winner. In 2019, shares had been buying and selling at $150, and by August 2021 they’d climbed to $750, as Covid incited a house renovation craze.

But like many retailers, RH had provide chain points, and it raised costs too aggressively, the corporate stated 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 many place-holding silverware, glasses and chairs. Immense images of the town are plastered on partitions, designed to breed the view that diners will see. It’s mainly a tough draft you possibly can sit in.

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

RH hopes to prosper in the identical skinny air breathed by Chanel, Hermès and Gucci, a realm that appears downright hostile to American manufacturers. Other than 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 provided ornamental equipment and inexpensive nostalgia. Mr. Friedman is fairly certain these storied European manufacturers are wanting down on the corporate.

“We usually are 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.