Restoration Hardware 2012 Annual Report Download - page 72

further improve our product development process. Through this process, we have eliminated the use of most third
party purchasing agents in favor of a model in which we directly manage our vendors. We have achieved
significant cost savings and other efficiencies from this initiative.
Distribution and Delivery
We manage the distribution and delivery of our products through seven facilities, each of which serves all of
our sales channels:
• Our West Jefferson, Ohio facility is approximately 805,000 square feet. It serves as our distribution
center for all of our small package direct-to-customer orders and retail store replenishment, as well as a
furniture home delivery hub for the surrounding area. We are planning to expand into an additional
400,000 square feet in May 2013.
• Our Baltimore, Maryland facility is approximately 508,000 square feet. It serves as a furniture
distribution center for the Eastern and Central regions of the United States and Canada, as well as a
furniture home delivery hub for the greater Baltimore and Washington, D.C. metropolitan areas.
• Our North East, Maryland facility is approximately 1,200,000 square feet and is located near our
Baltimore facility. It serves as a second furniture distribution center for the Eastern and Central regions
of the United States and Canada.
• Our Mira Loma, California facility is approximately 886,000 square feet. It serves as our furniture
distribution center for the Western regions of the United States and Canada, as well as a furniture home
delivery hub for the greater Los Angeles metropolitan area.
• Our Tracy, California facility is approximately 151,000 square feet. It serves as a furniture home
delivery hub for the San Francisco Bay Area market. In December 2011, we leased approximately
133,000 additional square feet of short-term, temporary storage within the same facility to also serve
our furniture distribution network.
• Our Avenel, New Jersey facility is approximately 114,000 square feet. It serves as a furniture delivery
hub for the greater New York/New Jersey metropolitan area.
• Our Houston, Texas facility is approximately 71,000 square feet. It serves as a furniture delivery hub
for the greater Houston metropolitan area and eastern Texas region.
In addition, we recently entered into a lease in connection with a planned distribution center in Grand
Prairie, Texas which is approximately 860,000 square feet. This new facility will support our furniture
merchandise distribution for our Central and Southern regions within the United States and is expected to
commence operations in the second half of 2013. This location will also house our new customer service call
center. To support the startup of the Grand Prairie distribution center, we have also entered into a short-term
lease in the Ft. Worth, Texas area for 300,000 square feet of distribution space. We intend to exit this interim
facility shortly after commencing operations at the Grand Prairie facility.
We offer a white glove home delivery service for larger furniture items and items delivered with multiple
components, where our delivery personnel assist our customers by properly installing and assembling the
product. We operate portions of our home delivery services in five key markets to leverage operating costs and
improve our customers’ service experience, while reducing returns and damage to our products. We plan to
continue this trend of in-sourcing these services in additional markets over time, including three in 2013, while
managing deliveries in other markets through third-party vendors.
Through expansions and upgrades to our inventory warehousing, distribution and delivery operations over
the last four years, we have improved our supply chain and distribution operations, and have built a scalable
infrastructure with significant capabilities to support our future growth. We believe our enhanced supply chain
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