Gary Friedman, the CEO of the upscale homeware store — formerly known as Restoration Hardware — admitted to investors that the company has become"too arrogant" and"too aggressive" in its pricing in recent years.
Friedman's comments were made during a call with investors on Thursday after the company reported itsBut Friedman, who is also a majority shareholder of the brand, said he has a plan to address its pricing problem to drive growth at the brand. "We looked at the sourcing. We challenged everything. And I think ... what's coming, whether you're looking at interiors or contemporary or modern, you're just going to see a real meaningful value equation connected to design and quality leadership that will change the trajectory of everything," he said.
While Friedman said there would be promotions on discontinued items, this won't apply to new stock. But its newest collection, dubbed"He wouldn't comment on how much it— despite being pressed by analysts to do so — but said the company will be"more competitive" with its new assortment. UBS analyst Michael Lasser said its new pricing strategy suggests that the brand is looking to court aspirational shoppers, which it may have alienated by previous price increases, in order to drive growth. "This move by RH has the potential to spark a similar reaction from others or increase overall promotions at the mid to high end of the market," Lasser said.