by Retailer plans $90 million to $110 million in capital expenditures this year compared with $66 million in 2024
BOSTON HEIGHTS, Ohio — One of the key themes of lifestyle retailer Arhaus’ recent conference call was the record growth in stores and relocations this past calendar year.
Combined, there were 11 new stores, or nearly one per month, and five relocations in key growth markets. This brings the company’s total showroom footprint to 103 locations across 30 states and all four geographic regions of the U.S., with California having the largest number of stores.
The company said that long term the plan is to open an average of five to seven stores per year, with additional Design Studios and store relocations.
And while this puts it closer to its plan to open 165 showrooms, the pace of openings this year in fact will be much slower, as the company expects to open three to five traditional stores by year end.
Despite the slower pace of new store openings, company co-founder and CEO John Reed said that “with $198 million in cash and a debt-free balance sheet, the company is well positioned to invest in our long-term growth strategy.”
In fact, it projects investing some $90 million to $110 million in capital expenditures this year compared with $66 million in 2024.
“Our long-term strategy includes opening an average of five to seven new traditional showrooms annually, along with additional design studios and showroom relocations,” he said. “Meanwhile, ongoing renovations and expansions will further enhance the client experience. The growth in our showroom footprint continues to strengthen brand awareness and engagement with higher client spending and strong showroom interactions, reinforcing our immersive showroom experience as a key differentiator.”
“A major driver of our success is our showroom team whose expertise, passion and best-in-class service elevate the client’s experience,” he added. “Digital managers curate inspiring showroom presentations while design consultants undergo extensive training to deliver personalized service. Weekly training ensures that they tell the stories behind our handcrafted thesis, emphasizing our brand artistry and craftsmanship.”
During the call, he offered few specifics on the new store locations, noting that the company normally doesn’t want to divulge too much information to its competitors.
“We’re finishing out California,” he said, noting that it is looking at other regions as well. “We’ve got lots and lots of opportunities all through the country. The Arizona area is just booming. Texas is booming. So we’re in great shape. … We find great locations and we open them. We’re going to do it conservatively, but we’re also going to do it in a way that makes sense. We’re not going to open locations to just open them.”
He also noted that remodels remain important as well in the year ahead and beyond.
“We’re going back and looking at anything that we can do to remodel as needed,” he said, noting that this includes moving a store in Dayton, Ohio, to a “great new lifestyle center that we know is going to give Dayton, Ohio, a nice boost. So it works across the board. We’re happy with the performance when we do move a store, or remodel a store. … So we are looking at about the same amount this year as last year. … That’s the kind of strategy we have, and we’re going to continue with that going forward.”
He also noted that in 2024, the company expanded its product offerings by introducing a growing mix of wood furniture and upholstery including “versatile designs with interchangeable components for greater customization and an elevated approach to power motion furniture that seamlessly blends comfort with craftsmanship.” In 2025, he noted, there will be “additional innovations and technology to ensure we remain at the forefront of design and function.”
Looking forward, he added, the company remains focused on long-term flexibility and strategic supply-chain management, including a focus on domestic manufacturing that gives it a competitive advantage during a period of uncertainty regarding tariffs.
“The largest part of our business is handmade in the United States,” Reed said. “So that gives us a huge competitive edge over our trend competitors, because it’s a big part of our business — the product that’s made right here in the United States. We have our own manufacturing facility as well as work with a lot of great manufacturers right here in the States.”
Finally, Reed identified what he described as four key pillars that are part of its long-term strategy that include:
+ Increasing brand awareness to drive net revenue. “We will continue to expand our showroom footprint and increase brand awareness through an omnichannel approach, including enhancing digital marketing, leveraging data-driven client engagement and upgrading our website with improved analytics and continued product service optimization,” Reed said.
+ Expanding the company’s showroom footprint with the goal of 165 traditional showrooms. “At almost double our current footprint, we have a long runway for growth and a robust pipeline in place.”
+ Enhancing omnichannel capabilities and technology. “We are focused on delivering a seamless customer experience with e-commerce, we believe, representing our fastest-growing revenue channel.”
+ Investing in growth “to build scale and enhance long-term margins, following the implementation of our new warehouse management system and progress in upgrading our operational infrastructure.”
Thus, while the company’s new retail store footprint will be smaller than this past record year of development, there are other initiatives on the horizon over the short and long term that will be worth watching. And our plan here at Home News Now is to cover those developments as they occur.
