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BUSINESS COMBINATION | 6 Months Ended
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Aug. 02, 2025
BUSINESS COMBINATION |
BUSINESS COMBINATION | NOTE 3—BUSINESS COMBINATION On July 8, 2025, we acquired a home furnishings business operating under the brand names of Formations and Dennis & Leen for total consideration of $32 million, funded through available cash. The transaction was accounted for as a business combination under ASC 805—Business Combinations. We believe that this addition to the RH platform further positions us as a leader in the luxury design market as we continue to enhance the RH product assortment. During the three and six months ended August 2, 2025, we incurred $1.5 million and $2.2 million, respectively, of acquisition-related costs associated with the transaction. These costs include fees associated with financial, legal and accounting advisors, and are included in selling, general and administrative expenses on the condensed consolidated statements of income. The following table summarizes the preliminary purchase price allocation based on the fair value of the assets acquired and liabilities assumed as of July 8, 2025:
​ | ​ | ​ | ​
​ | ​ | PURCHASE
​ | ​ | PRICE
​ | ​ | ALLOCATION
​ | ​ | (in thousands)
Merchandise inventories | ​ | $ | 5,451
Property and equipment | ​ | ​ | 27,461
Operating lease right-of-use assets | ​ | ​ | 4,443
Goodwill(1) | ​ | ​ | 2,770
Other assets | ​ | ​ | 981
Deferred revenue and customer deposits | ​ | ​ | (3,471)
Operating lease liabilities | ​ | ​ | (4,273)
Other liabilities | ​ | ​ | (1,243)
Total | ​ | $ | 32,119
(1) | Goodwill of $2.8 million, included in the RH Segment, represents the expected synergies from integrating the acquired business into our operations and is expected to be deductible for tax purposes.
The fair values assigned to assets acquired and liabilities assumed are preliminary based on our best estimates and assumptions as of the reporting date and may be subject to change as additional information is obtained within the measurement period (not to exceed 12 months from the acquisition date). Results of operations of the acquired company have been included in our condensed consolidated statements of income since July 8, 2025, the acquisition date. Pro forma results of the acquired business have not been presented as the results were not considered material to our condensed consolidated financial statements for all periods presented and would not have been material had the acquisition occurred at the beginning of fiscal 2024.

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- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/805/tableOfContent + Details
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