"Department stores play around in this area, but it's really a space that is unoccupied," Verdi says.
Sparse competition doesn't mean it will be smooth sailing for RH as it moves into new territory. There will be some challenges and benchmarks to meet when seeking to serve the luxury shopper, analysts say.
"If they are targeting the affluent luxury market, then they better be service-phenomenal and have a product assortment that's unique to them," says Michael Waitzer, a retail industry consultant who has worked with companies in Canada, the United States and United Kingdom.
Some other challenges the company may face include working in a segment of the retail market where costs are high and involve goods that often have slow turnover. Furniture is expensive and takes up a lot of space in a store, Verdi notes. Other potential challenges may include long lead times for products to arrive in warehouses and showrooms.No RH Atelier storefronts are planned, the company says -- smart because that would have forced the need to fine-tune its real estate, Waitzer and Verdi say, opening in shopping areas where luxury buyers are likely to be found.
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