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Restoration Hardware has repositioned itself to be a luxury lifestyle brand. It has a great story.  The brand was founded by Stephen Gordon in 1980 in Eureka, California. The idea for the company came while Gordon was restoring his Queen Anne style house. He had great difficulty finding period hardware. He recognized a need in the marketplace. The brand was initially about addressing the need for authentic period hardware. The initial store was founded in Gordon’s house in Eureka. Over time, Restoration Hardware expanded product offerings to include 1920s-themed lighting, bathware, curtains and furniture. Fifty percent of the business was novelty type items. The company expanded rapidly and went public in 1998. By 2001 Restoration Hardware was close to bankruptcy. Its stock had gone from $37 a share to $.50. It problems could be blamed on the lack of a focused merchandise assortment. In 2001, Restoration Hardware did not have a clear point of view.

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Gary Friedman, former President of Williams Sonoma, stepped in and over time saved the company. He spent six years remaking the business, slowly and methodically getting rid of the novelty items and bringing in furniture, linens and lighting. He made Restoration Hardware relevant. Restoration Hardware repositioned itself as a retailer of luxury home furnishings. Restoration Hardware’s sofas, chairs, tables, bureaus and other products are largely modern updates of classical designs. Its target market: households with incomes above $200,000 or “aspirational” customers trading up from department stores and other retailers.

The company struggled when the housing bubble burst in 2008. The company was forced to restructure, close stores and went private in 2008. The company lost money from 2008 to 2011. The company went public again in 2012.

This year it announced plans to transform itself from a high-end brand in home furnishings to a luxury lifestyle brand. The brand has evolved to become RH, which is positioned to curate a lifestyle beyond the four walls of home.

Not only is the company branching into “curated” collections of contemporary art, antiques and kitchen ware, it also plans to launch RH Atelier, a luxury brand of apparel, accessories, footwear and jewelry. Key to Restoration Hardware’s ongoing transformation will be the opening of much larger stores called Design Galleries to better showcase all of its products.

Five full-line Design Galleries have opened since 2011 in Los Angeles, Houston, Scottsdale, Ariz., and most recently Boston and Indianapolis. With an average of 21,600 square feet of selling space, they are about three times the size of the company’s legacy stores, not to mention more productive.

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The Boston outlet is the largest at 40,000 square feet. Besides displaying new product categories such as tabletop goods and “objects of curiosity,” the four-story historic building features a wine bar, beer pub, billiard lounge, library, club rooms and conservatory.

One strong point is the brand’s positioning. It’s above mass-market players such as Crate & Barrel, Williams Sonoma and Pottery Barn, but below top-end designer showrooms used by decorators.

The jury is still out whether the company can make a go of all of its ambitious undertakings. However recent results have been very positive. In the last quarter same store sales increased 26% and earnings jumped 48%. Its stock price has more than doubled since its IPO last year.

Have you shopped at a Restoration Hardware Store?

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Michael Kors is one of the hottest fashion brands in the world. It is an overnight sensation that has been 30 years in the making. Persistence pays off. Michael Kors was founded in 1981. Michael Kors has become a  strong global lifestyle brand with a broad appeal. The brand’s products have a “jet-set” aesthetic that is both stylish and sporty. Michael Kors sells affordable luxury. The affordable luxury segment has bounced back strong in 2013. The company sells accessories, footwear and apparel in upscale department stores and its own stores. Michael Kors is the “it” brand in this segment of the market. Michael Kors has surpassed Coach as the number one luxury fashion brand.

Success in the fashion industry is often fleeting. However Michael Kors is currently enjoying fame and success. The brand has done a great job connecting with the American fashion consumer. The brand has excelled because it has stayed focused on the market’s sweet spot — people with money who aren’t rich yet. Michael Kors has a strong understanding of the consumer he is designing for.

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Michael Kors has generated a strong buzz in the market. Kors was a judge on “Project Runway” since it first aired in 2004. The exposure has been very important for the brand. It has built brand awareness with young fashion consumers. When Project Runway started in 2004, the Michael Kors Brand had brand awareness that was under 20%. Today over 70% of Americans are aware of the brand.

Michael Kors is also one of the fastest growing stocks in 2013. The stock price is up over 50% year this year. The brand went public in 2011. It had already surpassed Ralph Lauren in market value. The company has delivered impressive earnings growth the last few quarters and a recent pullback to its 50 day moving average may represent a buying opportunity for aggressive investors. Strong brands that understand their target audience continue to be a good investment.

It will be interesting to see if Michael Kors can continue its rapid growth. It is difficult to maintain that competitive edge. The key will be designing relevant products that meet the lifestyle needs of his target consumer and continuing to market in innovative ways. There is always a market for great design. In the short-term, I wouldn’t bet against Michael Kors.

Do you think the Michael Kors Brand can continue its explosive growth?

Best Buy is in the middle of a dramatic turn-around. A year ago it appeared that Best Buy was destined to become another Circuit City and slowly go out of business. They simply couldn’t compete with Amazon, Wal-Mart or Target.

In December 2012, Best Buy’s stock price fell to $11.20, a nine-year low. December same store sales fell 1.2% as holiday discounts failed to attract shoppers. The company suffered from poor leadership, high internal costs and was not competitive on price.

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What a difference a year makes. The press couldn’t have been more negative about what was going to happen to Best Buy this time last year. Recently Best Buy’s stock closed at $42.92, an impressive 383% increase from its low in 2012. The company has pulled off a dramatic turn-around which started with a leadership change. Late last year Hubert Joly replaced Brian Dunn as the CEO.

Joly launched the “RENEW BLUE” strategy which is designed to make Best Buy the preferred authority and destination for technology products and services.  This strategy focused on more competitive pricing, improving in-store experience and internal cost reductions. Over 400 job were eliminated in the corporate office. Joly has implemented a store within a store model, striking exclusive partnerships with Samsung and Microsoft to establish in-store shops within Best Buy stores.

Best Buy has also made it its mission to match Amazon and other e-commerce sites on price. They are committed to being price competitive. In the past they have struggled with being a showroom for Amazon. “Showrooming” is when consumers use physical locations to see and try the very latest technology, but then go online to find a better deal.

Retailers, as you can imagine, aren’t fans of the practice. The near-term future for Best Buy depends on convincing consumer’s that their stores can be the best showroom. Best Buy is attempting to turn that weakness into a strength, embracing the fact that having stores work as showrooms attracts curious shoppers.

Best Buy recently launched their holiday advertising campaign which promotes their stores as “Your Ultimate Holiday Showroom”. New television spots highlight the experience consumers get at Best Buy — online and in-store — while touting things like its “low price guarantee” and the ability to order online and pick up in store.

Best Buy has made great strides in turning their business around in a short period of time in a very competitive environment. It will interesting to see if their new strategy succeeds long-term.

Have you shopped in a Best Buy store recently?

Investors Business Daily is a great example of building a brand through Content Marketing and Publishing. Content Marketing is a marketing technique of creating and distributing relevant and valuable content to attract, acquire and engage a clearly defined and understood target audience with the objective of driving customer action.

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Investors Business Daily is one of my favorite publishers. It is a must read for any active stock market investor. Investors Business Daily was founded in 1984 by William J. O’Neill. The purpose of the paper was simple: “To help individual investors make better decisions in less time”. Investors Business Daily provides investors with useful and timely information as well as training to help them be successful in the stock market.

The Investors Business Daily story began in the late 1950’s, when O’Neill asked two fundamental questions:

  • What makes a stock become a great stock?
  • What must be in place before I buy a stock?

To find the answer, O’Neill began studying great stocks of the past looking for common characteristics. He found seven factors that occurred repeatedly, year after year, decade after decade in winning stocks. He used that discovery to develop an investing discipline that came to be known as CAN SLIM®, a strategy based on data analytics. O’Neill used that approach to achieve remarkable success in the stock market. By the time he turned 30 in 1964, he had purchased a seat on the New York Stock Exchange and founded William O’Neill + Company a securities research firm. O’Neill founded Investors Business Daily to teach investors the CAN SLIM® investment approach.

Investor’s Business Daily is known for proprietary stock screens, comparative performance ratings and a track record of identifying stock market leaders as they emerge. Anyone can learn to use IBD’s step-by-step approach to making money in stocks. Countless ordinary investors have utilized the IBD approach to achieve extraordinary results.

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IBD realized early on it wasn’t just in the “printed news” business. It was in the business of helping readers make money in the stock market, and subsequently help advertisers effectively engage with these readers. That required a commitment to train people so they have the skills to succeed and to make sure they have access to tools and research whenever and wherever needed. “When you boil it down, IBD is in the success business”. IBD’s job is to give readers the skills and information they need to make money in the stock market.

At a time when the newspaper industry continues to struggle, Investor’s Business Daily (IBD) is expanding and building one of the most dedicated readerships in the nation. It’s done that by developing a business model focused on proactively training readers to be successful, while providing them with proprietary ratings and research in whatever format they prefer. IBD engages with readers through a newspaper published six days a week, online, through local events, social media and IBD Radio and Television. Investors.com generates 3,000,000 unique visitors on a monthly basis. William O’Neill has also published several books including the highly successful “How to Make Money In Stocks”. Investors Business Daily is another brand that understands the importance of owning their media channels.

Have you read Investors Business Daily?