In this episode, Scott Becker shares a deeply personal and candid take on Restoration Hardware’s dramatic stock plunge and its questionable financial moves.
Chapter 1: What is Restoration Hardware's recent stock performance?
This is Scott Becker with the Becker Private Equity and Business Podcast. Today's discussion is RH or Restoration Hardware Part 3. So here's my promise to our listenership. I'm done talking about RH for a while. I'll tell you, RH, just to give you a background on this, plunged 40% yesterday. It's down 60% today. It's down 67% year to date. It's a bit of a cluster.
Chapter 2: What financial moves has Restoration Hardware made recently?
The CEO's got one of the biggest egos of anybody in the world. They just did a stock repurchase and some other things to try and goose up the stock price. Took out loans to do so. Morons, moron financial moves. I hate these financial engineers. It is what it is. But I'll tell you why I hate RH. And again, it's down 6%, 7% year to date. I love the furniture. We have lots of it in our house.
Chapter 3: How does Scott Becker personally view Restoration Hardware's brand?
It is what it is. I think it's a good upper market brand that's not insane, but very nice, but can be insane. But the story is, when I grew up in a family that was not wealthy at all, periodically had challenges and so forth. Talk about too loud. You might offend some people and so forth and so on. But when I finally had money as an adult, went to RH to shop.
Chapter 4: What personal story does Scott share about shopping at Restoration Hardware?
And of course, I dressed how I always dress, which is not well. And one of my close friends describes it as, God, you dress like my buddy who doesn't care how he looks. And I thought that was offensive, but he didn't mean it in a bad way. But I go to RH. We have one of these beautiful salespeople.
looks at me, looks at, I'm there with one of my best friends, a guy who owns an auction company, and looks at me, looks at him, and immediately walks past us to the next potential customer that looks more like a real customer. I then said one of the things I regret saying about, you know, I can afford to shop here, et cetera, et cetera, and it was so embarrassing.
My friend teased with me about it to this day. But it's part of my love-hate relationship with RH. So I, since then, said to my friend, I hate their business model. They just got 20 really nice locations. You can't buy anything on site. It turned out their business model was pretty good for a while. I don't know if I was right or wrong, but because of how I was treated on that one occasion,
I take a certain schadenfreude joy in watching them be down 67% year-to-date, 40% yesterday, 15% today again. And I know that's horrible. It's almost Tim Walz's in its obnoxiousness, because I don't want to wish bad on anybody who's doing business in America, or really doing business almost anyplace. God bless you for being an entrepreneur and trying to drive our economy.
But RH, I do have that love-hate relationship. It comes out of a very dark place of, you know, growing up as a seventh grader that was a little bit chubby and always being a little bit insecure. It is what it is. But God bless our rates down 67% year to date. And thank you all for listening to the Becker Private Equity in Business podcast. Thank you very, very much.
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