Yahoo Finance Arhaus Opens a Large Los Angeles Showroom With Emphasis on Outdoor Furniture
Step inside the new and expansive Arhaus showroom in Los Angeles and you will see walls steeped in rich colors for an old world feel, antique Belgian fireplaces in stone-tiled rooms and contemporary chandeliers made of glass, not crystal.
But one of the biggest differences about this 17,904-square-foot showroom, located at The Grove open-air shopping center, is the extensive outdoor furniture section that covers an additional 4,000 square feet.
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“There’s a lot of outdoor space in the store, more than almost any of our other stores,” said John Reed, who cofounded Arhaus in 1986 and is the publicly traded company’s chairman of the board, president and chief executive officer. “We’ve really been growing our outdoor business since the COVID-19 pandemic. It’s just been a great new business, and this showroom gave us an opportunity to show off what we have. We have an upstairs patio and a downstairs patio.”
The downstairs patio has an enormous fountain left over from when Maggiano’s Little Italy restaurant occupied the locale. Arhaus refurbished the fountain, with its lion heads spouting water, and surrounded it with a sleek, curved outdoor couch.
The new L.A. venue is the latest chapter in the high-end furniture company’s California expansion. Arhaus opened its first showroom location in the Golden State in 2015 at the Del Amo Fashion Center south of L.A.
The Grove showroom represents the company’s 11th California location, and more are on the way in Carlsbad, Corte Madera and Palo Alto. All the showrooms have complementary interior design services and hundreds of upholstery selections.
Reed said that Arhaus, based outside of Cleveland, sees a significant growth opportunity in California. With 38 million people, it is the most populous state in the country where residents own a fair number of expensive and large homes and often are less affected by economic downturns.
Tapping into this affluent market, Arhaus, whose in-house furniture designs are made by artisans around the world, has been experimenting with a smaller prototype called the Design Studio covering 4,000 to 6,000 square feet.
The concept was first tested in Carmel, Calif., more than three years ago. “Now, we’ve decided to roll out a few more Design Studios as real estate becomes available,” Reed said, noting there are nine design studios already established in places including Aspen; Park City, Utah; Princeton, N.J.; and Greenwich, Conn. Later this year, this concept will be extended to Peachtree, Ga., and Huntersville, N.C. “These are pockets of places where either our clients have second homes or places like Princeton where you would never be able to do a 20,000-square-foot store.”
Arhaus was founded by Reed and his father, Jack Reed, in 1986 when the two opened a furniture store in Cleveland. Their idea was to design their own furniture and work with artisan workshops and factories around the world. Ten years ago, private equity firm Freeman Spogli & Co. acquired a minority stake for an undisclosed amount, helping the furniture venture to grow.
The company now has 81 traditional showrooms, nine Design Studios, and six Loft outlets located near distribution centers. Arhaus expects to end the year with 100 showrooms.
Currently, the furniture concern’s strongest markets are in Florida, Colorado and Arizona, as people working from home during the pandemic decided to move to more affordable areas. But California is expected to be a dominant player in another year or so.
Even though people are buying fewer homes these days, Reed said the company’s sales continue to grow. Net income in 2023 was $1.287 billion, up from $1.228 billion in 2022. “Many of our clients have decided that since they are not moving, they will fix up their home. So, let’s get some new furniture,” Reed explained. “We’ve been doing a lot of renovations where people want to either refresh a room or an entire house.”
The furniture company has a diverse clientele of primarily homeowners between the ages of 35 to 64 who enjoy artisan-inspired elements in much of the furniture but also like contemporary furniture with softer, curvier looks. “Everything has gotten curvy with a lot of texture on all that upholstery we have,” Reed said, noting the company has its own upholstery factory in North Carolina. “We are seeing more colors and lighter woods, which is resonating great in California.”
