Who Owns Arhaus Company?

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Who Owns Arhaus?

Understanding Arhaus's ownership is key to grasping its market position and future direction. A significant shift occurred with its IPO on November 4, 2021, valuing the company at $1.75 billion and marking its transition to public ownership.

Founded in 1986, Arhaus has grown into an upscale American home furnishings retailer. With 103 showrooms across 30 states and a strong online presence as of December 31, 2024, the company reported net revenue of $1.27 billion in fiscal year 2024.

The ownership journey includes founder stakes, significant investor involvement, and the current public shareholder base. This evolution shapes its strategic decisions, much like how a company might analyze its product portfolio using an Arhaus BCG Matrix.

The Arhaus company was established in 1986 by Jack Reed and his son, John Reed, in Cleveland, Ohio. Their shared vision was to create distinctive, high-quality home furnishings, with initial funding coming from the founders themselves.

Founding Vision

Arhaus was founded with a focus on unique, high-quality home furnishings. The name Arhaus itself blends a Danish city and a German word for house, emphasizing craftsmanship.

Founders

Jack Reed and his son, John Reed, are the founders of Arhaus. They established the company in Cleveland, Ohio, in 1986.

Initial Capital

The initial capital for Arhaus was privately funded by its founders. This early investment underscored their commitment to the business.

Name Origin

The company's name, Arhaus, is a combination of 'Aarhus' (a city in Denmark) and the German word for 'house'. This reflects the brand's emphasis on quality and artisanal design.

Consolidation of Ownership

In 2016, John Reed became the sole controlling owner of Arhaus. He acquired his father's interest, consolidating leadership and Arhaus ownership.

Corporate Reorganization

The corporate entity previously known as 'Homeworks, Inc.' was reincorporated as Arhaus, Inc. in 2013. This change reflected the company's established brand identity.

The early ownership structure of Arhaus was deeply rooted in the family's dedication to providing furniture made from sustainably sourced materials and crafted for heirloom quality. While specific details regarding initial equity splits are not publicly disclosed, the founders' commitment was evident in the company's ethos. This focus on quality and ethical sourcing has remained a cornerstone of the Arhaus company owner philosophy throughout its history, influencing its approach to business and its Marketing Strategy of Arhaus.

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Arhaus, Inc. became a publicly traded entity on November 4, 2021, with its shares listed on the Nasdaq under the ticker ARHS. The company's Initial Public Offering (IPO) saw shares priced at $13.00, raising approximately $167.7 million. This transition marked a significant shift in the Arhaus ownership structure.

The current Arhaus ownership landscape is diverse, with the company's founder and CEO, John Reed, holding the largest individual stake. As of March 17, 2025, Reed's 32% ownership translates to 45,130,228 shares, valued at roughly $416.1 million. Further bolstering the Reed family's influence, the 2018 Reed Dynasty Trust holds a 26% stake, and The Reed 2013 Generation Skipping Trust possesses approximately 4.0% of the company's stock. Collectively, these entities represent a substantial 58% of Arhaus's common stock. Institutional investors are also significant stakeholders, owning 26% of the company, while the general public, including retail investors, accounts for a 10% share. It is also noteworthy that prior to its IPO, in 2014, private equity firm Freeman Spogli & Co. acquired a minority stake in Arhaus, and this firm was a portfolio company of Arhaus at the time of the IPO, highlighting the history of Arhaus ownership.

Key Arhaus Stakeholders

Understanding who owns Arhaus provides insight into its corporate structure and strategic direction.

• John Reed, the Arhaus founder and CEO, is the largest individual shareholder.
• The Reed family, through various trusts, holds a majority of the company's stock.
• Institutional investors represent a significant portion of Arhaus stock ownership.
• The general public and retail investors also participate in Arhaus ownership.

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The board of directors at Arhaus is instrumental in guiding the company's strategic direction and governance. John Reed, a co-founder, holds the positions of Chairman and Chief Executive Officer, making him a key figure in the company's leadership structure.

The voting power within Arhaus is primarily determined by its dual-class stock structure, comprising Class A and Class B common stock. As of March 31, 2025, the company had 53,788,036 Class A shares issued and 53,514,062 outstanding, alongside 87,115,600 Class B shares issued and outstanding. John Reed, due to his significant shareholdings, wields a substantial portion of the overall voting power, influencing key corporate decisions.

Understanding Arhaus Ownership and Voting Power

The Arhaus company structure involves a distinct voting power distribution. John Reed, the Arhaus founder and CEO, holds significant influence.

• John Reed is the Chairman and CEO.
• The company utilizes a dual-class stock system (Class A and Class B).
• As of March 31, 2025, there were 53,514,062 Class A shares outstanding.
• As of March 31, 2025, there were 87,115,600 Class B shares outstanding.
• Understanding Growth Strategy of Arhaus is key to appreciating its ownership dynamics.

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In recent years, Arhaus has navigated a dynamic financial landscape, marked by its public offering in 2021 and subsequent performance. The company has focused on strategic expansion and shareholder returns, reflecting evolving ownership trends.

Arhaus has continued to prioritize its physical presence, expanding its showroom network. The company has also engaged in share repurchases and distributed a special cash dividend, indicating a focus on enhancing shareholder value. Leadership appointments, such as the new Chief Financial Officer in May 2025, underscore the company's ongoing strategic adjustments and operational focus.

Physical Footprint Expansion

As of December 31, 2024, Arhaus operated 103 showrooms across 30 states. The company has ambitious plans for 2025, with 12 to 15 new showroom projects anticipated.

Shareholder Returns

Arhaus reported $1.46 million in share buybacks for the period ending March 31, 2025. A special cash dividend of $0.50 per share, totaling $70.3 million, was paid out during the year.

Strategic Operational Focus

The company is investing in supply chain and technology enhancements. A key objective is to reduce sourcing from China to approximately 1% by the fourth quarter of 2025.

Upcoming Financial Reporting

Arhaus is scheduled to release its second quarter 2025 financial results on August 7, 2025. This will provide further insights into the company's performance and strategic direction, building on the information detailed in the Brief History of Arhaus.

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