Thread: How's your Pottery Barn, Crate and Barrel, and Restoration Hardware furniture made?

Even though this article is ten years old, it illustrates why you need to do your homework before you buy, that is if you want any kind of useful durability out of your purchase. This didn't shock any of us in the trade - we knew - but opened the eyes of a lot of consumers when Smart Money Magazine published it. Evey today, its relevant....

http://amelydesigns.com/PDF_Files/po...%20article.pdf

Duane, thanks for the post, I remember seeing this years ago, it still illustrates if you want long lasting furniture that both looks good and is functional it's best to do your homework.

To this day, I go by a Pottery Barn and look at their case goods and think, 'wow - they already looked dinged up." Their stools and chair-legs too are in particularly bad shape - very thin veneers, and the dark stains can't even hide the imperfections. Restoration Hardware's stuff does look better on close inspection, but just do a quick search on craigslist at used RH sofas, and it becomes quickly apparently that the cushions become hard and flat as pancakes within a year or two of purchase. I'll say this though - many more people buy furniture on style rather than on quality. I have been shopping for a year and I have still yet to find a perfect and accessible combination of both!

Here's the economics of all these trendy home furnishings stores and why you have to be observant in what you are buying.

All retailers set pricing based on overhead. You have a cost to run a business and real estate is a significant portion of that cost. Then the retailer will set a percentage over and above the cost of goods to take into account the overhead and allow for a profit. Market forces (that's you - the consumer) will dictate the ceiling on that price structure. So, in order to not break through that ceiling you have to do one of two things as a merchant. 1) Control cost of overhead 2) Buy less costly goods. That's the only way to do it.

Let's look at a hypothetical. Let's say the ceiling cost of a leather sofa is $ 3,999.

Store "A" is Pottery Barn, Restoration Hardware, Arhaus, Anthropologie, Crate and Barrell, etc.
Store "B" is a small independent retailer like my store, The Keeping Room. Off the beaten path and a destination store.

Store "A" is in a fashion mall, or other prime retail that has significant floor traffic. It requires 6 employees @ $15 an hour to run the day from 9 a.m. to 9 p.m. Twelve hours x six persons = 72 man hours. $ 15 an hour x 72 = $ 1,080. Open 30 days a month = $ 32,400 in payroll. Next is the rent. 5,000 s.f. at mall rent prices of $ 40 a s.f. (with CAM) = $ 16,600. Monthly outlay just for staff and rent is say $ 49,000.

Store "B" is off-prime space, little to no walk-in traffic, its destination. Same 5,000 s.f., but the monthly rent is $ 7,000, and operating hours are shorter, and since its a destination store less payroll. We'll say 2 employees for 20 days @ $ 15 an hour ($ 4,800). All that comes to around $ 12,000 a month, or one quarter of that prime retail mall store. ONE QUARTER!!!

So the fancy and trendy store has 4x the operating cost - now to hit their mark they need to buy the sofa they are selling for $ 3,999 at around $ 1,500 wholesale in order to cover the overhead. Meanwhile the small independent who is selling a sofa for $ 3,999 is probably paying around a thousand dollars more ($ 2,500) for the piece. At the manufacturing level, there is a huge chasm in quality from a $ 1,500 sofa to a $ 2,500 one. The differences are notable and significant.

This is why people are perplexed when they observe that both sofas are the same price, but the one from the non-trendy location appears to be a much better piece. And it almost always will be. The small store that is out-of-the-way simply doesn't have the overhead costs and can offer the consumer a higher quality piece for same money. It's simple math.

This is also the reason why high quality furniture stores that are in prime retail often go bust. The overhead grinds them up and in order to make margin they have to price the goods far above the prices of those doing cheap products and break through the ceiling, then consumesr backlash against the price.

So you have to be careful shopping those mall stores. Sure, they have great store design, excellent displays and are right around the corner from your favorite restaurant, and you're also likely paying a high price for mediocre (or even poorly made) product when you purchase there. Be observant, take the knowledge you gain from forums such as this one, and examine pieces before you buy.

Restoration Hardware recently reported its final quarter of earnings for 2016, and the overall the company's shares have dropped 60% in the course of the year. I've been watching this with a bit of schadenfreude ever since they switched to the membership program (where they have stopped all seasonal promotions and instead instituted a $100 annual membership program - membership holders get a constant 25% discount across the board- but RH has also conveniently jacked up their prices by 25% based on consumer reports). The idea behind this type of counter-intuitive marketing is to improve the perception of the brand by making it more exclusive, and by proxy, improving the perception of its quality as well. It's circular logic - hiking up the prices to justify hiking up the prices. Anyways, I was reading this article in the Motley Fool and thought I'd share - I'm kind of amused that they are now being described as "upscale but not quite luxury" - a good euphemism for "pricey but not quite quality." Seems like RH's gamble to improve the perception of its brand without improving the quality of their goods, the price, or their shipping/customer service has been unsuccessful, and their shares have dropped. Rightly so.


https://www.fool.com/investing/2016/...f-excuses.aspx

I think they are also trying to follow a membership revenue model like Costco. The membership renews every year unless you cancel, and gives them a consistent revenue stream.

I did sign up for the membership at RH this year as I'm planning to redo my master suite. I bought some bed linens and will likely buy some bathroom plumbing and lighting fixtures from them, so the membership makes sense for me this year.
RH has unique designs. I think the quality is good for lighting and plumbing/hardware fixtures. Their quality for outdoor furniture or upholstered furniture is lacking.

Wow...that's a very risky marketing tactic by Restoration Hardware. Sounds like desperation to me. Can't jack prices and then tell everyone its $ 100 a year to get back to the regular price. People are not stupid.

Costco succeeds because their primary source of revenue is the Membership Fees. Their margins are so low there virtually no net profit on sales. They make millions on Membership fees.

RH does have some pretty and fashionable designs that are hard to get in your local traditional furniture store which I think is the appeal. Some of their wood furniture is awful but I bought a few cabinets that are solid walnut that was on clearance. They were a very good buy and are well made and weigh a ton! I have also bought a couple of bathroom wall sconces and pivot mirrors that were again on clearance. Very solid and good quality. I guess if you buy their furniture make sure it is a solid wood.

I love one of their sofas but would not buy upholstered furniture from them. From what I understand they are poorly made in China.

Originally Posted by drcollie

Even though this article is ten years old, it illustrates why you need to do your homework before you buy, that is if you want any kind of useful durability out of your purchase. This didn't shock any of us in the trade - we knew - but opened the eyes of a lot of consumers when Smart Money Magazine published it. Evey today, its relevant....

http://amelydesigns.com/PDF_Files/po...%20article.pdf

Well if those stores are not that great in quality...that rules out 99% of the furniture stores around my area in phoenix. Kind of weary buying furniture online without seeing it and wayfair has like 1000 brands that can be filtered out. Can you name off a few top quality ones? thanks!

Look around this forum and you will see the quality brands, it's a frequent topic. What is better than shopping brands however, is shopping construction. How is it built?

This past Friday I had a couple come into my store and they were shopping sofas. They had liked this one at Bloomingdale's and it was "on sale" for $ 2,199.

https://www.bloomingdales.com/shop/p...mp%3DmatchNone

While they were checking out my Hancock and Moore # 9840 City Sofa I had on display (which costs a few hundred more) I pulled up the construction standards for the Bloomie's unit off the web:

https://www.chateaudax.com/modern-li...ofas-universal

As soon as I saw "Particle Board" and "Nylon Webbing" I brought them over to show them the build standards on the computer. I then said "Whether you buy a sofa from my store or not, do not buy ones made of particleboard (which is just wood chips glued together) or any nylon webbing suspension. That sofa will likely fail in less that four years under normal use. Also note the one year warranty, and that its held together with staples, screws and glue. That's a low bar on that unit".

The Hancock and Moore they were looking at has a SOLID maple frame (not plywood) and a 8-way coil spring suspension with a lifetime frame guarantee. For a few hundred more they will get 10x the lifespan. They did buy the # 9840 City on their second trip and we delivered it to them the next day.

Quality is going to cost you a bit more, but it comes back to you in longevity of the product.