0001875444-22-000017 | 10-K | XBRL Viewer

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Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets
Cash and cash equivalents	$ 123,777	$ 57,093
Restricted cash equivalents	7,131	6,909
Accounts receivable, net	228	600
Merchandise inventory, net	208,343	108,022
Prepaid and other current assets	28,517	19,988
Total current assets	367,996	192,612
Property, furniture and equipment, net	179,631	117,696
Deferred tax asset	27,684	0
Goodwill	10,961	10,961
Other noncurrent assets	278	1,284
Total assets	586,550	322,553
Current liabilities
Accounts payable	51,429	29,113
Accrued taxes	7,302	7,910
Accrued wages	16,524	9,660
Accrued other expenses	61,047	12,405
Client deposits	264,929	154,127
Total current liabilities	401,231	213,215
Capital lease obligation	50,525	47,600
Deferred rent and lease incentives	63,037	71,213
Other long-term liabilities	1,992	24,966
Total liabilities	516,785	356,994
Commitments and contingencies (Note 12)
Stockholders’ Equity
Accumulated Deficit	(116,581)	(28,422)
Additional Paid-in Capital	186,209	1,670
Total Arhaus, Inc. stockholders' / members' equity (deficit)	69,765	(26,752)
Noncontrolling interest	0	(7,689)
Total equity	69,765	(34,441)
Total liabilities and stockholders' / members' equity (deficit)	586,550	322,553
Class A Units
Stockholders’ Equity
Stock issued		$ 0
Class A
Stockholders’ Equity
Stock issued	50
Class B
Stockholders’ Equity
Stock issued	$ 87

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2021	Dec. 31, 2020
Class A Units
Common stock, par value (in dollars per share)	$ 0	$ 0
Common stock, shares issued (in shares)	0	4,803
Common stock, shares outstanding (in shares)	0	4,803
Class A
Common stock, par value (in dollars per share)	$ 0.001
Common stock , shares authorized (in shares)	600,000,000
Common stock, shares issued (in shares)	50,427,390
Common stock, shares outstanding (in shares)	50,427,390
Class B
Common stock, par value (in dollars per share)	$ 0.001
Common stock , shares authorized (in shares)	100,000,000
Common stock, shares issued (in shares)	86,519,002
Common stock, shares outstanding (in shares)	86,519,002

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Statement [Abstract]
Net revenue	$ 796,922	$ 507,429	$ 494,538
Cost of goods sold	466,989	307,925	318,550
Gross margin	329,933	199,504	175,988
Selling, general and administrative expenses	296,117	168,616	146,306
Loss on disposal of assets	466	8	23
Income from operations	33,350	30,880	29,659
Interest expense	5,432	13,057	13,449
Loss on extinguishment of debt	1,450	0	0
Other income	(320)	0	0
Income before taxes	26,788	17,823	16,210
Income tax expense (benefit)	(10,144)	783	368
Comprehensive income (loss) attributable to the shareholders	36,932	17,040	15,842
Net income (loss) attributable to the shareholders	36,932	17,040	15,842
Less: Net income attributable to noncontrolling interest	15,815	10,958	8,315
Net and comprehensive income attributable to Company	21,117	6,082	7,527
Net and comprehensive income attributable to Arhaus, Inc.	21,117	3,235	5,016
Comprehensive income (loss)	$ 21,117	$ 3,235	$ 5,016
Net and comprehensive income per share, basic
Weighted-average number of common shares outstanding, basic (in shares)	116,013,492	112,058,742	112,058,742
Net and comprehensive income (loss) per unit, basic (in dollars per share)	$ 0.18	$ 0.03	$ 0.04
Net and comprehensive income per share, diluted
Weighted-average number of common shares outstanding, diluted (in shares)	119,521,442	112,058,742	112,058,742
Net and comprehensive income (loss) per unit, diluted (in dollars per share)	$ 0.18	$ 0.03	$ 0.04

Condensed Consolidated Statements of Changes in Mezzanine Equity and Members’ Deficit - USD ($) $ in Thousands	Total	Class B Units	Class A	Class B	Member Units Class A Units	Member Units Class B Units	Common Stock Class A	Common Stock Class B	Retained Earnings (Accumulated Deficit)	Additional Paid-in Capital	Noncontrolling Interest
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Ending balance	$ (46,473)								$ (36,673)	$ 1,095	$ (10,895)
Beginning balance (in shares) at Dec. 31, 2018		1,250,000
Beginning balance at Dec. 31, 2018		$ 15,695
Increase (Decrease) in Temporary Equity [Roll Forward]
Preferred units dividend unpaid		$ 2,511
Ending balance (in shares) at Dec. 31, 2019		1,250,000
Ending balance at Dec. 31, 2019		$ 18,206
Beginning balance (in shares) at Dec. 31, 2018					645,000	4,158,000
Beginning balance at Dec. 31, 2018	(46,473)								(36,673)	1,095	(10,895)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	15,842								7,527		8,315
Tax distribution	(5,130)										(5,130)
Preferred units dividend unpaid	(2,511)								(2,511)
Share based compensation	272									272
Ending balance (in shares) at Dec. 31, 2019					645,000	4,158,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Ending balance	(38,000)								(31,657)	1,367	(7,710)
Preferred units dividend unpaid		2,847
Preferred units dividend paid		$ (8,553)
Preferred units repayments (in shares)		(1,250,000)
Preferred units repayments		$ (12,500)
Ending balance (in shares) at Dec. 31, 2020		0
Ending balance at Dec. 31, 2020		$ 0
Beginning balance at Dec. 31, 2019	(38,000)								(31,657)	1,367	(7,710)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	17,040								6,082		10,958
Tax distribution	(10,937)										(10,937)
Preferred units dividend unpaid	(2,847)								(2,847)
Preferred units dividend paid	0
Share based compensation	309									309
Repurchase of incentive units	(6)
Ending balance (in shares) at Dec. 31, 2020					645,000	4,158,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Ending balance	(34,441)								(28,422)	1,670	(7,689)
Ending balance (in shares) at Nov. 08, 2021		0
Ending balance at Nov. 08, 2021		$ 0
Beginning balance at Dec. 31, 2020	(34,441)								(28,422)	1,670	(7,689)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	23,843								8,028		15,815
Tax distribution	(7,865)										(7,865)
Shareholder distribution	(12,350)								(12,350)
Pre-IPO dividend to noncontrolling interests of Arhaus, LLC	(50,659)										(50,659)
Shareholder distributions	(49,565)								(46,528)	(3,037)
Initial public offering less underwriter fees (in shares)							12,903,000
Initial public offering less underwriter fees	157,258						$ 13			157,245
Issuance of Class A and B common stock to vested incentive unit holders (in shares)							5,837,000	6,148,000
Issuance of Class A and B common stock to vested incentive unit holders of Arhaus, LLC	0						$ 6	$ 6		(12)
Non-controlling interest adjustment, in exchange of Class A common stock (in shares)							31,267,000	1,097,000
Non-controlling interest adjustment, in exchange of Class A common stock	0						$ 31	$ 1	(50,398)	(32)	50,398
Controlling interest adjustment, in exchange of Class B common stock					(645,000)	(4,158,000)		79,695,000
Controlling interest adjustment, in exchange of Class B common stock	0							$ 80		(80)
Shareholder capital contribution	3,872									3,872
Share based compensation	1,367									1,367
Ending balance (in shares) at Nov. 08, 2021					0	0	50,007,000	86,940,000
Beginning balance (in shares) at Dec. 31, 2020		0
Beginning balance at Dec. 31, 2020		$ 0
Ending balance (in shares) at Dec. 31, 2021		0
Ending balance at Dec. 31, 2021		$ 0
Beginning balance (in shares) at Dec. 31, 2020					645,000	4,158,000
Beginning balance at Dec. 31, 2020	(34,441)								(28,422)	1,670	(7,689)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	36,932
Initial public offering less underwriter fees (in shares)			31,266,536	80,792,206
Preferred units dividend unpaid	0
Ending balance (in shares) at Dec. 31, 2021					0	0	50,428,000	86,519,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Ending balance	31,460						$ 50	$ 87	(129,670)	160,993	0
Beginning balance (in shares) at Nov. 08, 2021		0
Beginning balance at Nov. 08, 2021		$ 0
Ending balance (in shares) at Dec. 31, 2021		0
Ending balance at Dec. 31, 2021		$ 0
Beginning balance (in shares) at Nov. 08, 2021					0	0	50,007,000	86,940,000
Beginning balance at Nov. 08, 2021	31,460						$ 50	$ 87	(129,670)	160,993	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	13,089								13,089
Deferred tax impact of Reorganization from partnership to a corporation	17,436									17,436
Transfer of Class B common stock to Class A common stock for long-tenured employees (in shares)							421,350	(421,000)
Transfer of Class B common stock to Class A common stock for long-tenured employees	7,315									7,315
Share based compensation	465									465
Ending balance (in shares) at Dec. 31, 2021					0	0	50,428,000	86,519,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Ending balance	$ 69,765						$ 50	$ 87	$ (116,581)	$ 186,209	$ 0

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities
Net income	$ 36,932	$ 17,040	$ 15,842
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	23,922	16,957	15,964
Amortization of deferred financing costs, payment-in-kind interest and interest on capital lease in excess of principal paid	1,734	3,731	3,906
Loss on extinguishment of debt	1,450	0	0
Equity based compensation	6,383	403	272
Derivative expense associated with Term Loan exit fee	44,544	17,928	0
Loss on disposal of assets	466	8	23
Deferred tax assets	(10,216)	0	0
Amortization and write-off of lease incentives	(6,112)	(8,034)	(7,751)
Changes in operating assets and liabilities
Accounts receivable	372	(160)	(180)
Merchandise inventory	(100,321)	2,049	(7,818)
Prepaid and other current assets	(3,333)	(8,356)	(5,822)
Other noncurrent assets	(288)	(1,522)	0
Other noncurrent liabilities	493	(1,191)	(778)
Accounts payable	17,595	1,611	2,130
Accrued expenses	17,302	8,305	3,319
Deferred rent and lease incentives	4,518	9,559	4,486
Client deposits	110,802	89,934	(3,554)
Net cash provided by operating activities	146,243	148,262	20,039
Cash flows from investing activities
Purchases of property, furniture and equipment	(47,870)	(13,011)	(9,877)
Proceeds from sale of property, furniture and equipment	0	0	12
Net cash used in investing activities	(47,870)	(13,011)	(9,865)
Cash flows from financing activities
Proceeds from revolving debt	0	30,600	30,900
Payments on revolving debt	0	(34,600)	(26,900)
Payments on long-term debt	0	(36,972)	(13,280)
Payments on fees associated with early extinguishment of debt	(609)	0	0
Repayments of related-party notes	(1,000)	(19,405)	(2,100)
Proceeds from related-party notes	1,000	1,155	2,184
Payments of debt issuance costs	(288)	0	0
Payments of preferred units dividends	0	8,553	0
Preferred units repayments	0	(12,500)	0
Repurchase of incentive units	0	(100)	0
Principal payments under capital leases	(107)	0	0
Payment of Term Loan exit fee derivative	(64,139)	0	0
Payments of pre-IPO dividend to noncontrolling interests of Arhaus, LLC	(50,659)	0	0
Distributions to noncontrolling interest holders	(61,915)	0	0
Proceeds from capital contribution	2,764	0	0
Proceeds from issuance of Class A common stock sold in IPO, net of underwriting costs	157,258	0	0
Payments of offering costs	(5,907)	0	0
Distributions to noncontrolling interest holders	(7,865)	(10,937)	(5,130)
Net cash used in financing activities	(31,467)	(91,312)	(14,326)
Net increase (decrease) in cash, cash equivalents and restricted cash equivalents	66,906	43,939	(4,152)
Cash, cash equivalents and restricted cash equivalents
Beginning of year	64,002	20,063	24,215
End of year	130,908	64,002	20,063
Supplemental disclosure of cash flow information
Interest paid in cash	5,121	9,295	11,255
Income taxes paid in cash	1,403	1,304	538
Lease incentives	5,352	5,196	3,199
Noncash Investing and Financing Activities [Abstract]
Purchase of property, furniture and equipment in accounts payable	5,968	1,249	248
Conversion of units of Arhaus, LLC to shares of Arhaus, Inc.	124	0	0
Contribution of deferred tax asset from wholly owned subsidiary	17,436	0	0
Capital contribution from CEO related to long-tenured employee award	4,551	0	0
Capital contribution from CEO for deferred compensation plan	3,872	0	0
Property, furniture and equipment additions due to build-to-suit lease transactions	31,017	0	0
Capital lease obligations	2,591	0	0
Dividends—unpaid	$ 0	$ 0	$ 2,511

Nature of Business	12 Months Ended
Nature of Business	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Business	Nature of Business Arhaus, Inc (“Arhaus,” “Company,” “we,” “us” or “our”) is a Delaware corporation and is a premium retailer in the home furnishings market, specializing in livable luxury supported by heirloom quality merchandise. We offer merchandise in a number of categories, including furniture, outdoor, lighting, textiles, and décor. Our curated assortments are presented across our sales channels in sophisticated, family friendly and unique lifestyle settings. We position our retail locations as Showrooms for our brand, while our website acts as a virtual extension of our Showrooms. The Company operated 79 Showrooms at December 31, 2021. Arhaus was formed on July 14, 2021 for the purpose of completing an initial public offering (“IPO”) of its common stock and related transactions in order to carry on the business of Arhaus, LLC (“LLC”) and its subsidiaries. Pursuant to the corporate reorganization and completion of the IPO in November 2021, the Company became a holding company for LLC and its subsidiaries. Reorganization and Initial Public Offering On November 4, 2021, the Company completed its IPO and sold 12,903,226 shares of Class A common stock at an IPO price of $13.00 per share and received proceeds of $151.4 million, net of underwriting discounts and commissions of $10.4 million and offering expenses of $5.9 million. The Company used a portion of the net proceeds to pay the Term Loan exit fee of $64.1 million, as discussed in Note 5. The remainder of the net proceeds were used for general corporate purposes, including payment of fees and expenses in connection with the IPO and to replenish working capital following a pre-IPO payment in the amount of $100.0 million which consisted of a $50.7 million dividend to noncontrolling interests and a $49.3 million distribution to the owners of Homeworks. In connection with the IPO, the Company reorganized its ownership structure from a limited liability company to a corporation for the purpose of issuing common stock on a publicly traded exchange. Pursuant to the terms of the Integrated Contribution Agreement by and among the Company, FS Arhaus Holding, Inc. (“FS Arhaus,” “Class B Units,” or “noncontrolling interest”), a Delaware corporation, Homeworks Holdings Inc. (“Homeworks,” or “Class A Units”) and the unit holders (“Management Unitholders”) of LLC, a series of transactions were completed on November 8, 2021, which we refer to, collectively, as the “Reorganization.” LLC and Homeworks were identified as entities under common control, in which both entities are ultimately controlled by the same party before and after the Reorganization and therefore resulted in a change in reporting entity. In accordance with ASC 805-50-45-5, for transactions between entities under common control, the consolidated financial statements for periods prior to the Reorganization have been adjusted to retrospectively combine the previously separate entities for presentation purposes. The effects of the change in reporting entity resulted in the inclusion of $6.4 million of cash and cash equivalents, $5.0 million of deferred compensation liability and $7.7 million of noncontrolling interest on the consolidated balance sheets at December 31, 2020. The Reorganization transactions included: •the amendment and restatement of the certificate of incorporation of Arhaus, Inc., to authorize two classes of common stock, Class A common stock and Class B common stock and to authorize the Company to issue up to 750,000,000 shares of common stock, consisting of 600,000,000 share of Class A common stock, par value of $0.001 per share, 100,000,000 shares of Class B common stock, par value of $0.001 and 50,000,000 shares of Preferred Stock, par value of $0.001; and •the Company’s acquisition of the units of LLC held by FS Arhaus, Homeworks, John Reed (“Reed”) through the John P. Reed Trust dated April 29, 1985, as Amended (“Reed Revocable Trust”) and the Management Unitholders, pursuant to the mergers and exchanges described below, and the issuance in those transactions of Class A common stock to the holders of FS Arhaus and the Management Unitholders and Class B common stock to Homeworks, Reed and the Reed Revocable Trust. The following steps describe the transactions that were completed to effect the Reorganization on November 8, 2021: •Step 1: The Company formed two wholly owned subsidiaries, Ash Merger Sub 1, Inc. (“Merger Sub 1”), a Delaware corporation, and Ash Merger Sub 2, Inc. (“Merger Sub 2”), a Delaware corporation; •Step 2(a): Merger Sub 1 merged with and into FS Arhaus, with FS Arhaus surviving the merger, or Surviving Corporation 1, and became a wholly owned subsidiary of the Company and the holders of FS Arhaus received shares of Class A common stock; •Step 2(b): Merger Sub 2 merged with and into Homeworks, with Homeworks surviving the merger, or Surviving Corporation 2, and became a wholly owned subsidiary of the Company and the owners of Homeworks received shares of Class B common stock; •Step 2(c): The Management Unitholders contributed their units in LLC to the Company in exchange for shares of Class A common stock; •Step 2(d): Reed and the Reed Revocable Trust contributed their respective units in LLC to the Company in exchange for shares of Class B common stock; •Step 2(e): The Company contributed the units of LLC that it owns directly to Surviving Corporation 1 and Surviving Corporation 2 in proportion to the units of LLC owned by Surviving Corporation 1 and Surviving Corporation 2; and •Step 3: The Company issued shares of Class A common stock to the purchasers in the IPO. As a result of the Reorganization, a total of 39,623,041 shares of Class A common stock and 87,536,950 shares of Class B common stock were issued to the former holders of FS Arhaus, the former holders of Homeworks, Reed, the Reed Revocable Trust and the Management Unitholders. Of the total 127,159,991 shares of common stock issued, 2,520,227 shares of Class A common stock and 596,598 shares of Class B common stock issued to Management Unitholders are subject to certain vesting conditions specified in individual award agreements and were issued as restricted stock with the exact time-based vesting provisions as the incentive units that were exchanged for such shares. If the vesting conditions of the restricted stock are not satisfied, such restricted stock will be forfeited and canceled. Effects of COVID-19 on Our Business The COVID-19 outbreak in the first quarter of 2020 caused disruption to our business operations. In our initial response to the COVID-19 pandemic, we undertook immediate adjustments to our business operations including temporarily closing all retail locations, furloughing employees, minimizing expenses and delaying investments, and pausing some inventory orders while we assessed the impact to our business. Our approach to the pandemic evolved quickly and business trends substantially improved during the second through fourth quarters of 2020, as a result of both the reopening of our Showrooms and strong consumer demand for our products. We reopened all of our Showrooms and Outlet stores by June 30, 2020. While we have been able to serve our clients and operate our business through the ongoing COVID-19 pandemic, there can be no assurance that future events will not have an impact on our business, results of operations or financial condition since the extent and duration of the pandemic remains uncertain. Future adverse developments in connection with the COVID-19 pandemic, including additional waves or resurgences of COVID-19 outbreaks, new strains or variants of the virus, evolving international, federal, state and local restrictions and safety regulations in response to COVID-19 risks, changes in consumer behavior and health concerns, the pace of economic activity in the wake of the COVID-19 pandemic, or other similar issues could adversely affect our business, results of operations or financial condition in the future, or our financial results and business performance in future periods. Various constraints in our merchandise supply chain have resulted in delays in our ability to convert demand into net revenue at normal historical rates. We anticipate that the business conditions created by COVID-19 will continue to impact the capacity of our vendors and supply chain to meet our demand during 2022. We expect that our supply chain may catch up to demand in the foreseeable future, but business circumstances and operational conditions cannot be predicted with certainty. Depending on the future course of the pandemic and further outbreaks, we may experience further restrictions and closures of our Showrooms and Outlet stores. Although we experienced strong demand for our products during 2020 and 2021, some of the demand may have been driven by consumers reinvesting in their homes and furnishings as they spend more time at home due to the pandemic. The exact impact that COVID-19 will have on future consumer behavior and related demand for our products cannot be predicted with certainty.

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

A summary of significant accounting policies applied in the preparation of the consolidated financial statements are as follows:

Basis of Presentation

The accounting and reporting policies of the Company are in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include our accounts and those of our wholly owned subsidiaries. Accordingly, all intercompany balances and transactions have been eliminated through the consolidation process. Certain reclassifications have been made to prior years' consolidated financial statements to conform to the current year's presentation.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

The Company considers cash and all other highly liquid investments with an original maturity of three months or less to be cash equivalents. The Company regularly carries deposits in excess of federally insured amounts, but does not believe that it is exposed to significant concentration of credit risk as they are carried at a high-quality financial institution with an investment-grade rating.

Cash and cash equivalents include $9.1 million and $5.7 million at December 31, 2021 and 2020, respectively, for amounts in-transit from credit card companies since settlement is reasonably assured and not restricted.

Restricted Cash Equivalents

The Company maintains certain cash balances restricted as to withdrawal or use. Restricted cash is comprised primarily of cash used as collateral for the Company’s credit card sales processing partner, a portion of our workers’ compensation obligations that our insurance carrier requires us to collateralize and a portion of our customs obligation that the U.S Customs and Border Protection requires us to collateralize.

Accounts Receivable

The Company’s accounts receivables are $0.2 million and $0.6 million, respectively, at December 31, 2021 and 2020, net of allowance for doubtful accounts of $0.2 million and $0.3 million, respectively. The allowance for doubtful accounts is determined by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history, the client’s current ability to pay its obligations, and the condition of the general economy and industry as a whole. Accounts receivable are written off when they become uncollectible and any payments subsequently received on such receivables are credited to the allowance for doubtful accounts. Accounts receivable are recorded at the invoiced amount and do not bear interest.

Revenue Recognition

Net revenue consists of sales to clients, net of returns, discounts, and rebates. Net revenue and cost of goods sold are recognized when performance obligations under the terms of the contract are satisfied and the control of merchandise has been transferred to a client, which occurs when merchandise is received by our clients. Net revenue from “direct-to-client” and “home-delivered” sales are recognized when the merchandise is delivered to the client. Net revenue from “cash-and-carry” Showroom sales are recognized at the point of sale in the Showroom. Discounts provided to clients are accounted for as a reduction of sales at the point of sale. Sales commissions are incremental costs and are expensed as incurred.

A reserve is recorded for projected merchandise returns based on actual historical return rates. The Company provides an allowance for sales returns based on historical return rates, which is presented on a gross basis. The allowance for sales returns is presented within other current liabilities and the estimated value of the right of return asset for merchandise is presented within prepaid expense and other current assets on the consolidated balance sheets. Actual merchandise returns are monitored

regularly and have not been materially different from the estimates recorded. Merchandise returns are granted for various reasons, including delays in merchandise delivery, merchandise quality issues, client preference and other similar matters. The Company has various return policies for their merchandise, depending on the type of merchandise sold. Returned merchandise often represents merchandise that can be resold. Amounts refunded to clients are generally made by issuing the same payment tender as used in the original purchase. Merchandise exchanges of the same merchandise at the same price are not considered merchandise returns and, therefore, are excluded when calculating the sales returns reserve. The allowance for sales returns of $5.6 million and $5.1 million at December 31, 2021 and 2020, respectively, is recorded in the accrued other expenses line item on the consolidated balance sheets.

All taxes assessed by a government authority that are both imposed on and concurrent with a specific revenue producing transaction and collected by the Company from clients are excluded from the measurement of the transaction price. As a result, sales are stated net of tax.

Shipping and handling is recognized as an activity to fulfill the performance obligation of transferring merchandise to clients, therefore the fees are recorded in net revenue. The costs incurred by the Company for shipping and handling are included in cost of goods sold, and the costs of shipping and handling activities are accrued for in the same period as the delivery to clients.

The Company collects various taxes as an agent in connection with the sale of merchandise and remits these amounts to the respective taxing authorities. These taxes are included within accrued taxes line item of the consolidated balance sheets until remitted to the respective taxing authorities.

Client deposits represent payments made by clients on orders. At the time of purchase, the Company collects deposits for all orders equivalent to at least 50 percent of the client’s purchase price. Orders are recognized as revenue when the merchandise is delivered to the client and at the time of delivery the client deposit is no longer recorded as a liability. The Company expects that substantially all client deposits as of December 31, 2021 will be recognized within 2022 as the performance obligations are satisfied.

Private Label Credit Card

The Company has an agreement with a Credit Card Issuer (“Issuer”) to provide clients with private label credit cards (the “Card Agreement”) which was amended on January 13, 2021 to extend the term of the agreement through August 31, 2026. Each private label credit card bears the Arhaus brand logo and can only be used at the Company’s Showroom locations or website. The Issuer is the sole owner of the accounts issued under the private label credit card program and absorbs the losses associated with non-payment by the private label card holders and a portion of any fraudulent usage of the accounts.

During the term of the Card Agreement, the Company receives a percentage of private label credit card sales from the Issuer and is also eligible to receive incentive payments for the achievement of certain targets. These funds are recorded within net revenue in the consolidated statements of comprehensive income. The Company also receives reimbursement funds from the Issuer for certain expenses the Company incurs. These reimbursement funds are used by the Company to fund marketing and other programs associated with the private label credit card and are recorded within net revenue in the consolidated statements of comprehensive income.

Merchandise Inventory

The Company’s merchandise inventory is comprised primarily of finished goods and is carried at the lower of cost or net realizable value, with cost determined on a weighted-average cost method. To determine if the value of inventory should be marked down, below original cost, we use estimates to determine the lower of cost or net realizable value, which considers current and anticipated demand, client preference and merchandise age.

Reserves for shrinkage are estimated and recorded throughout the period as a percentage of current merchandise inventory levels and historical shrinkage results. Actual shrinkage is recorded throughout the year based upon periodic cycle counts and the results of the Company’s annual physical inventory counts. Merchandise inventory includes reserves of $4.2 million and $2.7 million at December 31, 2021 and 2020, respectively.

Prepaid and Other Current Assets

Prepaid and other current assets include cash advanced by the Company for leasehold improvements at new (or existing, in some cases) Showroom locations. These amounts represent capital costs associated with opening new Showroom locations, a

substantial portion of which is subject to recovery from the lessor upon completion. The amount to be recovered totaled $11.5 million and $10.2 million at December 31, 2021 and 2020, respectively.

Advertising Costs

Except for costs associated with the semi-annual catalogs, the Company expenses advertising costs as incurred because data is limited and not conclusive in justifying the capitalization of such expenses for future benefit. Advertising costs amounted to $35.9 million, $24.4 million and $23.4 million for the years ended December 31, 2021, 2020 and 2019, respectively, and are included within the selling, general and administrative expenses line item on the consolidated statements of comprehensive income. Expense associated with the catalogs are recognized upon the delivery of the catalogs to the carrier.

Property, Furniture and Equipment

Property, furniture and equipment is stated at cost, net of accumulated depreciation and amortization. Depreciation and amortization is calculated using the straight-line method generally using the following useful lives:


Asset class/ type						Useful Life-Years
Leased property under capital lease						Term of the underlying lease
Leasehold improvements						Lesser of 10 years or lease term
Landlord improvements						Lesser of 10 years or lease term
Furniture and fixtures						3 to 5 years
Computers and equipment						3 to 10 years
Vehicles						5 to 10 years

Capitalized software costs relate to third-party developed software and are amortized on a straight-line basis over the estimated useful life of the software, which generally is three years.

Depreciation and amortization expense was $23.9 million, $17.0 million and $16.0 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Property, furniture and equipment is reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. For further discussion regarding the impairment accounting policy refer to “Long-Lived Assets.”

Goodwill

Goodwill represents the excess of the purchase price over the fair value of assets and liabilities acquired in a business combination. The Company operates as one segment and has a single reporting unit, Arhaus Consolidated. For the purposes of goodwill impairment testing, a reporting unit is defined as an operating segment or one level below an operating segment (referred to as a component) for which discrete financial information is available.

We test goodwill for impairment on an annual basis in the fourth quarter of each year, and more frequently if events or changes in circumstances indicate that it might be impaired. Circumstances that may indicate impairment include, but are not limited to:

•Deterioration in general economic conditions, limitations on accessing capital, or other developments in equity and credit markets;

•Industry and market considerations such as deterioration in the environment in which the Company operates, an increased competitive environment, a decline in market dependent multiples or metrics, a change in the market for the Company’s merchandise or services, or a regulatory or political development;

•Cost factors that have a negative effect on earnings and cash flows;

•Overall financial performance;

•Changes in management, key personnel, strategy, or clients;

•A sustained decrease in share price in either absolute terms or relative to peers.

Under U.S. GAAP, we have the option to first assess qualitative factors in order to determine if it is more likely than not that the fair value of our reporting unit is greater than its carrying value (“Step 0”). The term more likely than not refers to a level of likelihood that is more than 50 percent. If the qualitative assessment leads to a determination that the reporting unit’s fair value

is less than its carrying value, or if we elect to bypass the qualitative assessment altogether, we are required to perform a quantitative impairment test (“Step 1”) by calculating the fair value of the reporting unit and comparing the fair value with its associated carrying value. We will recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value.

We determine fair values using an equally weighted combination of the discounted cash flow approach (“income approach”) and the guideline public company method (“market approach”), based upon the relevance and availability of the data at the time we perform the valuation.

Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. We use our internal forecasts to estimate future cash flows and include an estimate of long-term future growth rates based on our most recent views of the long-term outlook for the reporting unit. Actual results may differ from those assumed in our forecasts. We derive our discount rate based on our weighted average cost of capital determined by using a combination of the capital asset pricing model, the cost of debt and an appropriate industry capital structure. We use a discount rate that is commensurate with the risks and uncertainty inherent in the respective businesses and in our internally developed forecasts. Valuations using the market approach are derived from metrics of publicly traded companies that are deemed sufficiently similar to the Company. Estimating the fair value of reporting units requires the use of estimates and significant judgments that are based on a number of factors including actual operating results. It is reasonably possible that the judgments and estimates described above could change in future periods.

Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of those assets may not be recoverable. Circumstances that may indicate impairment include, but are not limited to:

•A significant decrease in the market price of a long-lived asset or asset group;

•A significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition;

•A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an adverse action or assessment by a regulator;

•an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset or asset group;

•A current-period operating or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset or asset group;

•A current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

An asset group is defined as the lowest level for which identifiable cash flows are available and largely independent of the cash flows of other groups of assets, which for our Showrooms is the individual Showroom level.

In those circumstances, the Company performs an undiscounted cash flow analysis to determine if an impairment exists. If the sum of the estimated undiscounted future cash flows over the remaining life of the asset are less than the carrying value, the Company will recognize an impairment charge equal to the difference between the carrying value and the fair value, usually determined by the estimated discounted future cash flows associated with the asset.

Based on management’s analysis there were no events or circumstances identified during 2021 or 2020, indicating a potential impairment of any long-lived assets.

Deferred Rent and Lease Incentives

For leases that contain fixed escalations of the minimum annual lease payment during the original term of the lease, the Company recognizes rental expense on a straight-line basis over the lease term and records the difference between rent expense and the amount currently payable as deferred rent. The Company records rental expense during the construction period, as the expected lease term begins the date the Company takes possession for construction or other purposes. Deferred lease incentives include construction allowances received from landlords, which are amortized on a straight-line basis over the initial lease term, including the construction period.

Merchandise Warranties

The Company warrants certain merchandise to be free of defects in both construction materials and workmanship from the date the performance obligation was fulfilled to the client for three to ten years depending on the merchandise category. The Company accounts for merchandise warranties by accruing an estimated liability at the time we recognize revenue on the sale of warrantied merchandise. We estimate future warranty claims based on claim experience which includes materials and labor costs to perform the repairs. We use judgment in making our estimates. We record differences between our estimated and actual costs when the differences are known.

A reconciliation of the changes in our limited merchandise warranty liability were as follows (amounts in thousands):


	2021		2020
Balance as of beginning of year	$	3,326	$	3,164
Accruals during the year	7,903		4,548
Settlements during the year	(6,505)		(4,386)
Balance as of end of the year (1)	$	4,724	$	3,326

(1) $2.7 million and $1.8 million were recorded in accrued other expenses at December 31, 2021 and 2020, respectively. The remainder is recorded in other long-term liabilities.

We recorded accruals during the periods presented in the table above, primarily to reflect charges that relate to warranties issued during the respective periods.

Income Taxes

We account for income taxes under an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. In estimating future tax consequences, we generally take into account all expected future events then known to us, other than changes in the tax law or rates which have not yet been enacted and which are not permitted to be considered. We may record a valuation allowance to reduce our net deferred tax assets to the amount that is more-likely-than-not to be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based upon the weight of available evidence. Future taxable income of the appropriate character in either the carryback or carryforward period under the tax law and ongoing prudent and feasible tax planning are considered in determining the amount of the valuation allowance, and the amount of the allowance is subject to adjustment in the future. Specifically, in the event we were to determine that it is not more-likely-than-not that we would be able to realize our net deferred tax assets in the future, an adjustment to the valuation allowance would decrease net income in the period such determination is made. This allowance does not alter our ability to utilize the underlying tax net operating loss and credit carryforwards in the future, the utilization of which requires future taxable income.

The accounting standard for uncertainty in income taxes prescribes a recognition threshold that a tax position is required to meet before being recognized in the financial statements and provides guidance on subsequent recognition, derecognition, and measurement based on management’s best judgement given the facts, circumstances, and information available at the reporting date. Differences between tax positions taken in a tax return and amounts recognized in the financial statements generally result in an increase in liability for income taxes payable or a reduction of an income tax refund receivable, or a reduction in a deferred tax asset or an increase in a deferred tax liability, or both. At December 31, 2021 and 2020, the Company assessed its income tax positions and concluded that it had no unrecognized tax benefits. We recognize interest and penalties related to unrecognized tax benefits in income tax expense on the consolidated statements of comprehensive income. No such interest and penalties were recorded for the years ended December 31, 2021, 2020 or 2019.

Prior to the Reorganization, the Company was a limited liability company under the Internal Revenue Code that had elected to be taxed as a partnership and did not pay federal or most state corporate income taxes on its taxable income, but rather its members were liable for their respective portions of the taxable income (loss) of Arhaus, LLC. Therefore, no provision for federal income taxes are included in these consolidated financial statements prior to the Reorganization. Subsequent to the Reorganization, Arhaus, LLC’s taxable income flows through to FS Arhaus and Homeworks who are subject to U.S. federal and state corporate income taxes.

The Company is subject to state and local income tax examinations by tax authorities. With few exceptions, the Company is no longer subject to state and local tax examinations for the years before 2017.

Cost of Goods Sold

Cost of goods sold includes, but is not limited to, the direct cost of purchased merchandise, inventory shrinkage, inbound freight, all freight costs to get merchandise to our Showrooms, design, buying and allocation costs, credit card fees, occupancy costs related to Showroom operations and supply chain such as rent, property tax and common area maintenance for our leases, depreciation and amortization of leasehold improvements, equipment and other assets in our Showrooms and distribution centers, sourcing related costs, and all logistics costs associated with shipping merchandise to clients.

Selling, General and Administrative Expenses

Selling, general and administrative expenses include all operating costs not included in cost of goods sold. These expenses include payroll and payroll related expenses, Showroom expenses other than occupancy,and expenses related to many of our operations at our corporate headquarters, including utilities, depreciation and amortization and marketing expense, which primarily includes catalog production, mailing and print advertising costs. Payroll includes both fixed compensation and variable compensation. Variable compensation includes Showroom commissions and Showroom bonus compensation related to demand, likely before the client obtains control of the merchandise. Variable compensation is primarily received by Showroom employees and is not significant in our eCommerce channel. All new Showroom opening expense other than occupancy are included in selling, general and administrative expenses and are expensed as incurred.

Loyalty Reward Program

In January of 2019, the Company established a loyalty reward program for clients who use the Company’s private label credit card to receive rewards based on the client’s merchandise purchases. The liabilities associated with the rewards are established on the consolidated balance sheets when the rewards are issued and are removed from the consolidated balance sheets, either when used by the client or upon expiration (3 months from when the reward is issued). At December 31, 2021 and 2020, outstanding liabilities related to the loyalty reward program of $1.3 million and $0.9 million, respectively, and are included within the accrued other expenses line item of the consolidated balance sheets. The Company recognizes expense upon the establishment of the liability.

Gift Cards

The Company sells gift cards to our clients in our Showrooms and through our website. Such gift cards do not have expiration dates. We defer revenue when payments are received in advance of performance for unsatisfied obligations related to our gift cards. The liability related to unredeemed gift cards of $0.9 million and $0.8 million at December 31, 2021 and 2020, respectively, is recorded in the accrued other expenses line item of the consolidated balance sheets. The Company recognizes income associated with breakage proportional to actual gift card redemptions.

Self-Insurance

We maintain insurance coverage for significant exposures as well as those risks that, by law, must be insured. In the case of health care coverage for employees, we have a managed self-insurance program related to claims filed. Expenses related to this self-insured program are computed on an actuarial basis, based on claims experience, regulatory requirements, an estimate of claims incurred but not yet reported (“IBNR”) and other relevant factors. The projections involved in this process are subject to uncertainty related to the timing and number of claims filed, levels of IBNR, fluctuations in health care costs and changes to regulatory requirements. We had liabilities of $0.9 million and $0.6 million at December 31, 2021 and 2020, respectively, recorded in the accrued other expenses line item of the consolidated balance sheets.

We carry workers’ compensation insurance subject to a deductible amount for which we are responsible on each claim. We had liabilities related to workers’ compensation claims of $0.2 million and $0.4 million at December 31, 2021 and 2020, respectively, recorded in the accrued taxes line item of the consolidated balance sheets.

Credit Risk and Concentration Risk

Approximately 18% and 25% of the Company’s merchandise were purchased from one vendor for the years ended December 31, 2021 and 2020, respectively.

Fair Values of Financial Instruments

The Company’s primary financial instruments are accounts receivable, payables, lease obligations, derivatives, and equity based compensation instruments. Due to the short-term maturities of accounts receivable and payables, the Company believes the fair values of these instruments approximate their respective carrying values at December 31, 2021 and 2020. See Note 5 for discussion of our derivative, Note 6 for discussion of our lease obligations and Note 9 for discussion of our equity based compensation instruments.

The Company has established a hierarchy to measure our financial instruments at fair value, which requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs represent market data obtained from independent sources, whereas unobservable inputs reflect the Company’s own market assumptions, which are used if observable inputs are not reasonably available without undue cost and effort. The hierarchy defines three levels of inputs that may be used to measure fair value:

Level 1 Unadjusted quoted prices in active markets for identical, unrestricted assets and liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability.

Level 3 Unobservable inputs that reflect the entity’s own assumptions about the assumptions market participants would use in the pricing of the asset or liability and are consequently not based on market activity but rather through particular valuation techniques.

Deferred Financing Fees

Debt issuance costs were recorded as part of the establishment of the Company’s financing arrangements (see Note 5). The debt issuance costs were recorded within the other noncurrent assets line item on the consolidated balance sheets and were amortized as interest expense over the contractual life of the debt structure using the straight-line method, which approximates the effective interest rate method.

Noncontrolling Interest

Noncontrolling interests represent the ownership interests of the Company held by FS Arhaus. The Company identifies its noncontrolling interests separately within the equity section on the Company’s consolidated balance sheets and within the Company’s consolidated statements of changes in mezzanine equity and stockholders’/members’ equity (deficit). The amounts of consolidated net and comprehensive income attributable to the Company and to the noncontrolling interest are presented separately on the Company’s consolidated statements of comprehensive income. As part of the Reorganization, the noncontrolling interest held by FS Arhaus was exchanged for shares of class A common stock. Accordingly, net and comprehensive income attributable to noncontrolling interest shown for 2021 on the consolidated statements of comprehensive income only represents income statement activity until the day of the Reorganization.

Equity Based Compensation

In connection with the Reorganization, the Company adopted the 2021 Equity Incentive Plan (the “2021 Equity Plan”), which authorized the Company to grant stock options (either incentive or non-qualified), stock appreciation rights or SARs, restricted stock, restricted stock units or RSUs, performance shares, performance share units and other stock-based awards with respect to our Class A common stock. As of December 31, 2021, the Company has not granted any awards to employees under the 2021 Equity Plan.

Prior to the Reorganization, the Company granted incentive units to employees and computes the costs arising from the grants at fair value and recognizes such costs as expense over the vesting period for the units. The Company uses the Black-Scholes valuation model which requires the input of assumptions regarding the expected term, expected volatility, dividend yield and risk-free interest rate to estimate the fair value of its incentive unit arrangements. The Company accounts for forfeitures as they occur. See Note 9 for further discussion of the incentive unit arrangements.

Net and comprehensive income (loss) per share

Basic net and comprehensive income (loss) per share is computed as net income (loss) attributable to Arhaus, Inc. divided by the weighted-average number of common shares outstanding for the period. Diluted net and comprehensive income (loss) per share is computed as net income (loss) attributable to Arhaus, Inc. divided by the weighted-average number of common shares outstanding for the period and common share equivalents under equity plans using the treasury stock method. Potential dilutive securities are excluded from the computation of diluted net income per share if their effect is anti-dilutive.

Emerging Growth Company Status

The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

New Accounting Standard or Updates Adopted

In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies the subsequent measurement of goodwill by removing the second step of the two-step impairment test. The amendment requires an entity to perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. A goodwill impairment will be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The standard is effective for the Company for interim and annual reporting periods beginning after December 15, 2022; early adoption is permitted. The Company adopted the standard effective January 1, 2020, with no impact to our financial statements.

New Accounting Standards or Updates Not Yet Adopted

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases which, for operating leases, requires a lessee to recognize a right-of-use asset and a lease liability, initially measured at the present value of the lease payments, in its balance sheets. While it will still be necessary for lessees to distinguish between “operating” and “financing” (formerly known as “capital”) leases, these distinctions will primarily affect how a lessee must recognize expense in its income statement. The new guidance is effective for financial statements issued for annual periods beginning after December 15, 2021. Early adoption is permitted.

The adoption of this ASU will result in a material increase on the Company’s consolidated balance sheets for lease liabilities and right-of-use assets. While the Company is continuing to evaluate all potential impacts of the standard, the Company does not expect adoption to have a material impact on the Company’s consolidated net earnings or cash flows. We will adopt the new standard using the modified retrospective approach, which requires application of the new guidance at our application date of January 1, 2022 with a cumulative-effect adjustment to retained earnings. Comparative periods will continue to be presented in accordance with ASC 840. The Company elected the package of practical expedients which allows the Company to not reassess its previous conclusions about lease identification, lease classification and initial direct costs. The Company elected the “Short-Term Leases” practical expedient and therefore will not recognize a lease liability and right-of-use asset for leases with a term of 12 months or less. The Company has decided not to elect the “Land Easements” or “Hindsight” practical expedients. As a result, the Company will measure the right-of-use asset and lease liability for operating leases upon adoption using the remaining portion of the lease term that was determined under ASC 840.

A cross-functional implementation team is finalizing the discount rate to be used based on January 1, 2022 data, and business processes and controls to support recognition and disclosure under the new standard. The primary impact upon adoption will be the recognition of right-of-use assets and lease liabilities, on a discounted basis, of our minimum lease obligations, and the derecognition of existing assets and liabilities for certain assets under construction in build-to-suit lease arrangements that the Company will lease when construction is complete, as disclosed in Note 6. The Company has substantially completed the process of assessing the impact the adoption of this ASU will have on our consolidated financial statements. We estimate the impact to be $227.7 million to $246.7 million recognized as total right-of-use assets and $310.6 million to $336.5 million recognized as total lease liabilities on our consolidated balance sheet as of January 1, 2022. As part of the adoption, the Company will also derecognize existing assets and liabilities for certain assets under construction in build-to-suit arrangements

of $31.0 million. We currently do not expect ASU 2016-12 to have a material effect on our consolidated statements of comprehensive income.

In October 2020, the FASB issued ASU 2020-10, “Codification Improvements.” The amendments in this Update represent changes to clarify the Codification or correct unintended application of guidance that are not expected to have a significant effect on current accounting practice. The amendments in this Update affect a wide variety of Topics in the Codification and apply to all reporting entities within the scope of the affected accounting guidance. ASU 2020-10 is effective for annual periods beginning after December 15, 2021 for non-public business entities. Early application is permitted. The amendments in this Update should be applied retrospectively. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

Correction of an Immaterial Error

During 2021, the Company recorded out-of-period adjustments to correct prior period errors. The errors were primarily caused by a capital lease asset being depreciated over a longer incorrect useful life which overstated property, furniture and equipment, net and the cumulative understatement of selling, general and administrative expenses of $3.0 million. Management evaluated the impacts of the out-of-period adjustments to correct the errors for year ended December 31, 2021 and for prior periods, both individually and in the aggregate, and concluded that the adjustments were not material to the Company’s consolidated annual financial statements for all impacted periods.

Property, Furniture, and Equipment

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Property, Furniture and Equipment

Property, furniture and equipment, net consists of the following at December 31, 2021 and 2020 (amounts in thousands):


	2021		2020
Leased property under capital lease	$	48,303	$	45,205
Leasehold improvements	42,418		39,704
Landlord improvements	137,106		126,245
Furniture and fixtures	5,411		4,598
Computer and equipment	25,124		17,965
Vehicles	9,229		78
Build-to-suit properties	31,017		—
Construction in process	10,457		638
	309,065		234,433
Less: Accumulated depreciation	(54,054)		(46,759)
Less: Landlord improvement accumulated depreciation	(75,380)		(69,978)
Property, furniture and equipment, net	$	179,631	$	117,696

Goodwill	12 Months Ended
Goodwill	Dec. 31, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	Goodwill During 2021, we reviewed Arhaus Consolidated, our one reporting unit’s goodwill for impairment by performing a qualitative assessment in the fourth quarter. Based on the results, it was identified that it was more likely than not the fair value of goodwill recorded exceeded the current carrying value and concluded no impairment existed. During the years ended December 31, 2021 and 2020, there was no change in the recorded goodwill balances and we have not recorded any historical goodwill impairments.

Long-Term Debt

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term DebtThe Company’s prior debt structure entered into in 2017 (“Prior Credit Facilities”) included a revolving credit facility of $30.0 million (the “Prior Revolver”) and a term loan of $40.0 million (the “Term Loan”). The Prior Revolver’s availability was limited pursuant to a borrowing base formula based on specified percentages of eligible inventories and accounts receivable. The Company had the option, subject to terms and conditions, to borrow on the Prior Revolver by means of any combination of Base Rate Loans or LIBOR Loans. The Company’s borrowings under the Prior Revolver bore variable interest rates for Base Rate Loans of the greater of (a) the Federal Funds Rate plus 0.5%, (b) the Prime Rate, (c) the LIBOR Rate plus 1.0%, and (d)

4.0% and at LIBOR loans at the LIBOR rate (“LIBOR”) plus the applicable margin (6.25% at December 31, 2019). The Prior Revolver carried a non-use fee of 0.50% per annum. Deferred financing costs related to the Prior Revolver were recorded in other noncurrent assets and were amortized over the term of the debt on a straight-line basis, which approximated the effective interest method. Amortization expense was $0.2 million and $0.5 million for the years ended December 31, 2020 and 2019, respectively, and included in interest expense within the consolidated statements of comprehensive income. The unamortized balance of these loan costs of $0.6 million as of June 25, 2020 were written off to interest expense within the consolidated statements of comprehensive income, as the Company terminated the Prior Revolver and entered in a new credit agreement with new lenders.

The Term Loan bore interest at a rate equal to 16.0% per annum, of which 12.0% per annum was to be paid in cash and 4.0% per annum was to be paid in kind by capitalizing such amount and adding it to the principal amount of the loan each quarter. The Company was required to make a prepayment on the Term Loan in an amount not less than 50 percent of the Company’s Excess Cash Flow, as defined in the Term Loan agreement, on or before May 15th of the year following such year. Other than the mandatory Excess Cash Flow payments, as defined, which were calculated at the end of each year, the Term Loan had no required periodic principal payments during the term. The Term Loan facility permitted early principal payments subject to a 1.0% prepayment premium through December 26, 2020, and none thereafter. The Term Loan was paid in full on December 28, 2020.

Deferred financing costs related to the Term Loan were amortized over the term of the Term Loan, on a straight-line basis, which approximated the effective interest method. Amortization expense was $0.6 million and $0.6 million for the years ended December 31, 2020 and 2019, respectively, and is included in interest expense within the consolidated statements of comprehensive income. On December 28, 2020, in connection with the repayment of the Term Loan, the unamortized balance of these financing costs of $0.7 million were written off to interest expense.

The Company’s Term Loan had an exit fee clause which allowed the holder of the Term Loan to receive either $3.0 million upon repayment of the Term Loan or a payout equivalent to 4.0% of the total equity value of the Company. The 4.0% of the total equity value of the Company payout was payable upon a change of control, qualified IPO or sale of all or substantially all assets of the Company. In connection with the repayment of the Term Loan on December 28, 2020, the holder informed the Company they would decline the option to receive the $3.0 million and elect to receive a payout equivalent to 4.0% of the equity value. The exit fee was treated as a derivative and adjusted to fair value each reporting period. The Company recorded a liability of $19.6 million at December 31, 2020, related to the derivative that was classified within other long-term liabilities on the consolidated balance sheets. In connection with the Company’s IPO the fair value of the exit fee was determined to be $64.1 million and was paid by the Company in November 2021 using proceeds from the IPO. The company recorded $44.5 million and $17.9 million of derivative expense for the years ended December 31, 2021 and 2020, respectively in selling, general and administrative expenses within the consolidated statements of comprehensive income.

At December 31, 2020, the Company used a discounted cash flow method and guideline public company method to determine the fair value of equity which was used to calculate the fair value of the derivative liability. The key assumptions used within the valuation as December 31, 2020 were as follows:


Term . . . . . . . . . . . .			10 years
Risk-free rate of return			0.90%
Volatility . . . . . . . .			40.00%
Dividend yield . . . .			0%

On June 25, 2020, the Company entered into a credit agreement (the “Revolver”), which included a revolving credit facility of $30.0 million with availability limited pursuant to a borrowing base formula based on specified percentages of eligible inventory, net of reserves. The Company’s borrowings under the Revolver bore variable interest at LIBOR plus the applicable margin (5.5% at December 31, 2020). In the event LIBOR ceased to be available during the term of the Revolver, the Revolver provided procedures to determine an Alternate Base Rate. At December 31, 2020, the availability on the Revolver was $3.1 million based on the borrowing base formula. The Company had the option, subject to terms and conditions, to borrow on the Revolver by means of LIBOR loans. The Revolver had certain financial covenants, including a minimum fixed charge ratio and minimum EBITDA requirements. The Revolver carried a non-use fee of 0.50% per annum. Deferred financing costs related to the Revolver of $1.5 million were recorded in other noncurrent assets on the consolidated balance sheets and were amortized over the term of the Revolver on a straight-line basis, which approximated the effective interest method. Amortization expense

was $0.4 million and $0.2 million for the years ended December 31, 2021 and 2020, respectively and were included in interest expense within the consolidated statements of comprehensive income. The Revolver was set to expire on June 25, 2023.

On November 4, 2021 the Company terminated the Revolver of which there were no borrowings drawn. The termination of the Revolver resulted in a $1.4 million loss on extinguishment of debt. The loss, which included a $0.6 million early termination fee and a write off of the remaining unamortized loan costs of $0.8 million, included in the loss on extinguishment of debt within the consolidated statements of comprehensive income.

On November 8, 2021, the Company entered into a new revolving credit facility (the “2021 Credit Facility”). The 2021 Credit Facility provides for, among other things, (1) a revolving credit facility, in an aggregate amount not to exceed at any time outstanding the amount of such lender’s commitment, (2) a letter of credit commitment, in an amount equal to the lesser of (a) $10 million, and (b) the amount of the revolving credit facility as of such date, and (3) a swingline loan, in an amount equal to the lesser of (a) $5 million, and (b) the amount of the revolving credit facility as of such date. The aggregate amount of all commitments of all lenders under the 2021 Credit Facility is $50 million, which may be increased pursuant to the terms of the 2021 Credit Facility. The 2021 Credit Facility contains restrictive covenants and has certain financial covenants, including a minimum rent-adjusted total leverage ratio and minimum fixed charge ratio. The 2021 Credit Facility bears variable interest rates at the prevailing Bloomberg Short-Term Bank Yield index rate plus the applicable margin (1.75% at December 31, 2021), whereas the applicable margin is adjusted quarterly based on the Company’s consolidated rent-adjusted total leverage ratio. At December 31, 2021, we had no borrowings on the 2021 Credit Facility. Deferred financing costs related to the 2021 Credit Facility of $0.3 million are recorded in other noncurrent assets on the consolidated balance sheets and will be amortized over the term of the debt on a straight-line basis, which approximates the effective interest method. The 2021 Credit Facility expires on November 8, 2026.

In accordance with the change in reporting entity, the Company’s consolidated financial statements include the effect of related-party promissory notes from Reed to Homeworks which were paid off in December 2020. Interest expense related to these promissory notes of $0.4 million and $0.4 million were included within interest expense within the consolidated statements of comprehensive income for the years ended December 31, 2020 and 2019, respectively.

The Company was in compliance with all covenants at December 31, 2021 and 2020, and expects to remain in compliance over the next 12 months.

Leases

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Leases

The Company leases real estate and equipment under operating leases, some of which are from related parties. The most significant obligations under these lease agreements require the payments of periodic rents, real estate taxes, insurance and maintenance costs. The Company has received certain rent abatements, and has scheduled rent increases, under various real estate leases. The consolidated statements of comprehensive income reflects rent expense on a straight-line basis over the terms of the respective leases. Rent expense for the years ended December 31, 2021, 2020 and 2019 was $66.5 million, $58.6 million and $57.3 million, respectively. Depending on particular Showroom leases, the Company can also owe a percentage rent payment if particular Showrooms meet certain sales figures. Percentage rent expense for the years ended December 31, 2021, 2020 and 2019 was $6.1 million, $1.0 million and $1.5 million, respectively. Amortization of landlord improvements for the years ended December 31, 2021, 2020 and 2019 was $13.5 million, $10.4 million and $8.7 million, respectively.

A deferred rental obligation of $63.0 million and $71.2 million related to lease incentives and straight-line rent expense is reflected in the consolidated balance sheets at December 31, 2021 and 2020, respectively, in the deferred rent and lease incentives line item.

In September 2014, the Company entered into a lease agreement with a related party on a triple net basis for our headquarters building and distribution center, with construction completed during 2016. The base lease term is 17 years, with a 10-year renewal option at fixed rental payments, with two additional 5-year renewal options at fair market rental payments. The monthly rental payments range from $0.2 million to $0.5 million during the 17-year base lease term and from $0.5 million to $0.6 million during the 10-year renewal period. The Company concluded that the lease is a capital lease. The capital lease obligation and related asset were valued at $45 million and were recorded in 2016 when the Company took control of the property. In September 2021, the Company amended the existing capital lease agreement to extend the lease term for an additional three years with monthly rental payments of $0.6 million. Our capital lease obligation increased by $2.4 million as a

result of the extension. Accumulated amortization was $9.9 million and $5.3 million at December 31, 2021 and 2020, respectively.

Further, the amended capital lease agreement provides for the expansion of the Company’s distribution center and for monthly rental payments that have not been determined as of December 31, 2021. During the fourth quarter of 2021, the related party lessor sold its interest in the leased assets to a third party. As a result, the lease will no longer be with a related party of the Company.

Future minimum lease payments for the capital lease related to the Company’s corporate headquarters and distribution center at December 31, 2021, are as follows (amounts in thousands):


Year Ending December 31,
2022	$	4,673
2023	4,673
2024	4,673
2025	4,673
2026	5,132
Thereafter	120,390
	144,214
Less: Amounts representing interest	(94,064)
	$	50,150

In March 2021, the Company entered into a lease agreement with a related party for a distribution center and manufacturing building in North Carolina, for which construction was completed in the fourth quarter of 2021. The base lease term is for 12 years, with a 10-year renewal option and two additional 5-year renewal options at the higher of the minimum base rent or fair market rent at the time of renewal execution. The monthly rental payments range from $0.2 million to $0.3 million during the 12-year base lease term and from $0.4 million to $0.5 million during the 10-year renewal period. The Company has concluded that the lease is an operating lease.

Future minimum rental payments required under operating leases with initial or remaining noncancelable lease terms in excess of one year at December 31, 2021, are as follows (amounts in thousands):


Year Ending December 31,	Third Party		Related Party		Total
2022	$	43,540	$	2,352	$	45,892
2023	41,145		2,362		43,507
2024	37,191		1,468		38,659
2025	32,159		966		33,125
2026	29,105		798		29,903
Thereafter	125,252		4,246		129,498
	$	308,392	$	12,192	$	320,584

Some of our operating and capital leases require construction and or other modifications to prepare the leased asset for use. For certain operating and capital leases, we qualify as the deemed owner of the construction project due to our significant involvement during the construction period under build-to-suit lease accounting requirements within ASC 840, Leases. We recorded the cost of these construction projects of $31.0 million in property, furniture and equipment, net with an the offsetting lease financing obligation in accrued other expenses on our consolidated balance sheets, at December 31, 2021.

Employee Benefit Plans	12 Months Ended
Employee Benefit Plans	Dec. 31, 2021
Retirement Benefits [Abstract]
Employee Benefit Plans	Employee Benefit PlansThe Company has a defined contribution retirement savings plan covering substantially all employees. The Company may contribute a discretionary matching contribution equal to a percentage that the Company deems advisable. Total costs recorded in selling, general and administrative expenses on the consolidated statements of comprehensive income related to the plan were $2.2 million, $0.5 million and $1.1 million at December 31, 2021, 2020 and 2019, respectively.

Mezzanine Equity and Stockholders'/Members' Equity (Deficit)	12 Months Ended
	Dec. 31, 2021
Temporary Equity Disclosure [Abstract]
Mezzanine Equity	Mezzanine Equity and Stockholders’/Members’ Equity (Deficit) Homeworks Equity Structure Prior to Reorganization In accordance with the change in reporting entity, the Company’s consolidated financial statements were retrospectively adjusted to include Homeworks’ financial results for all periods presented (see Note 1). Prior to the Reorganization, Homeworks’ historical equity structure was comprised of 645 voting and 4,158 non-voting shares. The equity of Homeworks includes their investment in LLC, the noncontrolling interest in LLC and the Class B Preferred Units discussed below, which were owned by FS Arhaus and management incentive unit holders. Prior to the Reorganization, Homeworks and Reed held Class A units in LLC while FS Arhaus held Class B Units in LLC. Refer below for information on the LLC equity structure prior to the Reorganization. For the year ended December 31, 2021 cash distribution made were $61.9 million. Arhaus, LLC Equity Structure Prior to Reorganization Prior to the Reorganization, LLC established a multi-class unit structure with its members. Pursuant to LLC’s Third Amended and Restated Limited Liability Company Agreement dated June 26, 2017 (the “2017 LLC Agreement”) and the Arhaus, LLC 2017 Equity Plan (the “2017 Equity Plan”), LLC was authorized to issue up to 20,938,265 Class A Units, 7,488,248 Class B Units, 3,185,435 Class C Units, 285,387 Class D Units, 3,158,501 Class F Units, 3,158,501 Class F-1 Units, 1,250,000 Class A Preferred Units and 1,250,000 Class B Preferred Units. In connection with the issuance of the Prior Credit Facilities discussed in Note 5, the Class A and Class B unit equity holders made an aggregate $25.0 million capital contribution to the Company in exchange for 1,250,000 Class A Preferred Units and 1,250,000 Class B Preferred Units, respectively (collectively, the “Preferred Units”). The Preferred Units were issued pursuant to the 2017 LLC Agreement and accrued a 16% per annum (compounded annually) preferred return. The Preferred Units had no voting rights and did not participate in profits or losses. Preferred Unit holders were entitled to receive distributions in excess of tax distributions to Class A and B members in proportion to the accrued and unpaid preferred return and unreturned capital contributions. Further, Preferred Unit holders were entitled to receive proceeds upon a capital transaction before other unit holders in proportion to the accrued and unpaid preferred return and unreturned capital contributions. The Company could redeem the Preferred Units at our discretion, however, because the Preferred Unit holders control the board of directors (“Board”) and could force the Company to redeem the Preferred Units they were recorded as mezzanine equity. Upon the retrospective adjustment to include Homeworks, the Class A preferred units were eliminated upon consolidation. On December 29, 2020, the Preferred Units were repaid in full, including the preferred return dividend payment of $8.6 million. In May 2021, the 2017 LLC Agreement and 2017 Equity Plan were amended to authorize the Company to issue up to 967,987 Class G incentive units. Additionally, in accordance with the amendments, the authorized Class F and Class F-1 incentive units that could be issued were reduced to 2,190,514 and 2,190,514, respectively. No changes to the Company’s Class C and D incentive units were made. The Class C, D, F, F-1 and G Units (collectively referred to as the “Incentive Units) were incentive units to be issued to employees, directors, and others pursuant to the terms of the amended 2017 Equity Plan and have no voting rights and do not participate in profits or losses. Only the Class A and Class B Units had voting rights. Distributions were payable to the various unit classes only upon the occurrence of certain capital events, based upon participation thresholds and waterfalls as defined within the amended 2017 LLC Agreement. If Class B Units or Class B Preferred Units remained outstanding on January 6, 2023, the holder of those units, as defined, would have the right to cause a sale of the Company. Income and loss of the Company is allocated proportionately based off of the equity waterfall defined in the 2017 LLC Agreement. Prior to the Reorganization, the Company could make quarterly tax distributions to the Class A and B members pro rata based on the taxable income allocated to such members in an amount equal to the product of each member’s distributive share of the Company’s taxable income relating to each quarter (as estimated by the Board based on the results of the quarter), including any guaranteed payments, and the assumed tax rate. For the years ended December 31, 2021, 2020 and 2019, the Company’s tax distributions made to Class A and B members were $7.9 million, $10.9 million and $5.1 million, respectively. Prior to the Reorganization, the Company made a pre-IPO payment in the amount of $100.0 million which consisted of a $50.7 million dividend to noncontrolling interests and a $49.3 million distribution to the owners of Homeworks. Amendment and Restatement of Certificate of Incorporation In connection with the Reorganization, the Company’s Certificate of Incorporation was amended and restated to authorize two classes of common stock, Class A common stock and Class B common stock, and to authorize the Company to issue up to 750,000,000 shares of common stock, consisting of 600,000,000 shares of Class A common stock, par value of $0.001 per share, 100,000,000 shares of Class B common stock, par value of $0.001 and 50,000,000 shares of Preferred Stock, par value of $0.001. Holders of Class A common stock are entitled to one vote per share, and holders of Class B common stock are entitled to ten votes per share. Except as otherwise required in the Certificate of Incorporation or by applicable law, the holders of Class A common stock and Class B common stock shall vote together as a single class on all matters. Further, except as otherwise required in the Certificate of Incorporation or by applicable law, the holders of Class A common stock and Class B common stock shall be treated equally, identically and ratable in all respects as to all matters including, dividends, distributions, subdivision or combination and change of control transactions. Initial Public Offering On November 4, 2021, the Company completed its IPO and sold 12,903,226 shares of Class A common stock at an IPO price of $13.00 per share and received proceeds of $151.4 million, net of underwriting discounts and commissions of $10.4 million and offering expenses of $5.9 million. The Company used a portion of the net proceeds to pay the Term Loan exit fee of $64.1 million, as discussed in Note 5. The remainder of the net proceeds were used for general corporate purposes, including payment of fees and expenses in connection with the IPO and to replenish working capital following the payment of the Pre-IPO dividend to LLC Unit holders. 2021 Equity Incentive Plan In connection with the Reorganization, the Company adopted the 2021 Equity Incentive Plan (the “2021 Equity Plan”), which authorized the Company the ability to grant stock options (either incentive or non-qualified), stock appreciation rights or SARs, restricted stock, restricted stock units or RSUs, performance shares, performance share units and other stock-based awards with respect to our Class A common stock. As of December 31, 2021, the Company has not granted any awards to employees under the 2021 Equity Plan.

Equity Based Compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Equity Based Compensation

In January 2014, the Arhaus, LLC 2014 Equity Plan was established which allowed for the granting of Class C and D incentive units to employees. In June 2017, the Board adopted the 2017 Equity Plan, which allowed for the granting of Class F/F-1 incentive units to employees and in May 2021, the 2017 LLC Agreement and 2017 Equity Plan were amended to allow for the granting of Class G incentive units.

In May, June and July 2021, the Company granted a total of 701,965 Class G incentive units that vest over a five year term. The Class C, D, F and F-1 incentive units vest over three to five years. All holders of the Incentive Units become fully vested in the event of a change in control, death or disability, as long as the holder of the unit is employed by the Company on the date of such event. Further, certain Class G incentive unit holders who are terminated without cause will have their unvested units fully vest upon that event.

The Incentive Units represent interests that share only in proceeds from defined capital transactions above specified participation thresholds. Upon the Incentive Unit holder’s termination of employment, all unvested units are forfeited, and the Company has the right to purchase all vested units at a per unit price equal to the fair market value of a unit determined at the date such right is exercised by an independent appraisal firm to be mutually agreed to by the Company and the unit holder; provided however, all vested and unvested units are forfeited without compensation in the event of termination for cause.

The grant-date fair value of the Class C, D and F/F-1 incentive units is determined through use of the Black-Scholes option pricing model. The key assumptions used for the January 31, 2019 and September 30, 2019 Class F/F-1 incentive unit grants within the Black-Scholes model were as follows:


	September 30, 2019	January 31, 2019
Term	5 years	5 years
Risk-free rate of return	1.90%	2.60%
Volatility	36.10%	73.40%
Dividend yield	0%	0%

The Company’s valuation of the Class G incentive units granted in May, June and July 2021 were measured using the probability-weighted expected return model (“PWERM”). The PWERM is a scenario-based methodology that estimates the fair value of the Incentive Units awarded based upon an analysis of future values for the Company. The Company considered two different scenarios: (a) remain private and (b) IPO. Under the remain private scenario, as of June 30, 2021, the Company estimated the enterprise value by weighting the guideline public company method and the discounted cash flow method, and then relied on the option pricing model and applied a discount for lack of marketability. The option pricing model estimated the value using the Black-Scholes option pricing model.


			2021 Awards
Term			10 years
Risk-free rate of return			1.50%
Volatility			40.00%
Dividend yield			0%

The expected term represents our expected time until a liquidity event, as of the valuation date. The volatility assumption is based on an identified group of comparable public companies over a similar term. The risk-free rate of return is based on the yields of U.S. Treasury securities with maturities similar to the expected term. We used an expected divided yield of zero, as we do not plan to pay cash dividends for the foreseeable future.

The fair values of each class of units have been determined utilizing unobservable inputs, and therefore are Level 3 measurements under the fair value hierarchy.

Additionally, a probability distribution of possible future equity values is completed and incorporated into the calculation of respective unit fair values. This is necessary as upon the occurrence of a liquidity event in the future, the proceeds thereof will be allocated in accordance with the distribution waterfall defined within the amended 2017 LLC Agreement.

Prior to the Reorganization in November 2021, the Incentive Unit activity for the period prior to the Reorganization in 2021 and the year ended December 31, 2020, was as follows:


	Incentive Units
	Class C			Class D			Class F/F-1			Class G
	Units	Weighted Average Grant Date Fair Value		Units	Weighted Average Grant Date Fair Value		Units	Weighted Average Grant Date Fair Value (1)		Units	Weighted Average Grant Date Fair Value
December 31, 2019	1,868,913	$	0.57	96,318	$	0.83	4,984,390	$	0.63	—	$	—
Purchased	—			—			(36,638)	0.36		—
Forfeited	—			—			(566,722)	0.61		—
December 31, 2020	1,868,913	0.57		96,318	0.83		4,381,030	0.63		—	—
Granted										701,965	18.10
Forfeited	—			—			(109,916)	0.77
November 7, 2021	1,868,913	$	0.57	96,318	$	0.83	4,271,114	$	0.63	701,965	$	18.10

(1) - For each Class F Unit a corresponding Class F-1 Unit is authorized, issued and outstanding. The Class F Units and Class F-1 Units are aggregated for purposes of valuation

In connection with the Reorganization, the Incentive Unit holders contributed their units of LLC to Arhaus, Inc. in exchange for shares of Class A or Class B common stock for their vested Incentive Units and Class A or Class B restricted stock for their unvested Incentive Units (collectively referred to as the "Exchanged Stock"). The Exchanged Stock's fair value was equal to the respective Incentive Units’ fair market value prior to the Reorganization, which was in accordance with the distribution waterfall defined in the 2017 LLC Agreement. The vesting requirements for the exchanged Class A and Class B restricted stock (collectively the "Restricted Stock") did not change from the original Incentive Unit terms. The exchange of the Exchanged Stock was accounted for as a Type I (probable-to-probable) modification in accordance with ASC 718, Stock Based Compensation, in which no incremental fair value was determined to have been given to the Incentive Unit holders.

The Exchanged Stock activity from the Reorganization to December 31, 2021, is as follows:


	Common Stock						Restricted Stock
	Class A			Class B			Class A			Class B
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
November 8, 2021	—	—		—	—		—	—		—	—
Issued	5,836,278	$	16.28	6,148,146	$	0.13	2,520,227	$	16.28	596,598	$	0.13
December 31, 2021	5,836,278	$	16.28	6,148,146	$	0.13	2,520,227	$	16.28	596,598	$	0.13

In November 2021, the 2021 Equity Plan was adopted by the Board of Directors which allows for the granting of nonqualified stock options, incentive stock options, stock appreciation rights or SARs, restricted stock, restricted stock units or RSUs, performance shares, performance share units, and other awards. As of December 31, 2021, the Company has not granted any awards to employees under the 2021 Equity Plan.

Vested Incentive Units prior to the Reorganization in 2021 and the year-ended December 31, 2020, was as follows:


	Incentive Units
	Class C	Class D	Class F/F-1	Class G
December 31, 2020	1,653,476	96,318	2,167,547	—
November 7, 2021	1,868,913	96,318	2,982,442	—

No shares of Class A or Class B restricted stock have vested from the Reorganization to December 31, 2021.

The shares of the Incentive Units and Restricted Stock time vest and are accounted for as equity awards in which the fair value of the award is determined at the grant-date. The Company has recorded compensation expense of $1.8 million, $0.4 million

and $0.3 million at December 31, 2021, 2020 and 2019, respectively, within the selling, general and administrative expenses line item of the consolidated statements of comprehensive income. Total unrecognized compensation cost to be recognized in future periods was $11.6 million at December 31, 2021, and will be recognized over a weighted average period of 4.31 years. The total grant-date fair value of units vested during the years ended December 31, 2021 and 2020, was $0.3 million and $0.4 million, respectively.

In December 2021, Reed, a related party, transferred 421,350 shares of Class B common stock, which were automatically converted upon transfer to shares of Class A common stock to certain long-tenured employees of the Company, which was treated as an equity award. The transferred shares of Class A common stock do not have any vesting requirements. As a result of the transfer and awarding of the Class A common stock to employees, the Company recorded $4.6 million of compensation expense at December 31, 2021, within the selling, general and administrative expenses line item of the consolidated statements of comprehensive income. Further, Reed contributed $2.8 million to the Company in relation to the tax withholding obligations of the Company and those long tenured employees. The contribution was recorded as withholding expense within the selling, general and administrative expenses line item of the consolidated statements of comprehensive income.

In accordance with the change in reporting entity, the Company’s consolidated financial statements include a deferred compensation liability related to a former employee of Homeworks. The current portion of the deferred compensation liability is included within accrued other expenses on the consolidated balance sheets for $1.1 million at December 31, 2020. The non-current portion of the deferred compensation liability is recorded within other long-term liabilities on the consolidated balance sheets for $3.9 million at December 31, 2020, respectively. At the time of the Reorganization, Reed assumed the remaining deferred compensation liability which resulted in a capital contribution to additional paid-in-capital for $3.9 million at December 31, 2021.

Segment Reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment Reporting

Our chief operating decision maker (“CODM”) is our Chief Executive Officer, who reviews financial information presented on a consolidated basis for purposes of making decisions, assessing financial performance and allocating resources. We operate our business as one operating segment and therefore we have one reportable segment that offers an assortment of merchandise across a number of categories, including furniture, lighting, textiles, décor, and outdoor. The assortment of merchandise can be purchased through our Retail and eCommerce sales channels.

The majority of our revenue is generated through sales to clients in the United States. Sales to clients outside of the United States are not significant. Further, no single client represents more than ten percent or more of our net revenue.

The following table shows revenue by merchandise sales channel for the years ended December 31, 2021, 2020 and 2019 (amounts in thousands):


	2021		2020		2019
Retail	$	652,790	$	417,426	$	439,660
eCommerce	144,132		90,003		54,878
Total Net revenue	$	796,922	$	507,429	$	494,538

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Net and Comprehensive Income per Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Net and Comprehensive Income per Share

Net and comprehensive income per share

As a result of the Reorganization and IPO, existing Class A and Class B Unitholders of the Company were issued Class A and Class B common stock in Arhaus, Inc., in accordance with the distribution waterfall defined in the Company’s 2017 LLC Agreement. The Class A Unitholders received 80,792,206 shares of Class B common stock and the Class B Unitholders received 31,266,536 shares of Class A common stock.

Accordingly, all share and per share amounts for all periods presented in the consolidated statements of comprehensive income and this note have been adjusted retroactively, where applicable, to reflect the Reorganization.

Basic and diluted net and comprehensive income per share for the years ended December 31, 2021, 2020 and 2019 was calculated by adjusting net and comprehensive income attributable to Arhaus, Inc. for preferred dividends, net and comprehensive income attributable to noncontrolling interest and dividing by basic and diluted weighted-average number of common shares outstanding (amounts in thousands except unit and per share data). Management Incentive Unitholders and Preferred Unitholders do not participate in the earnings or losses of the Company as of December 31, 2021, 2020 and 2019 and

therefore are not participating securities. As such, they are not included within the calculation of basic or diluted earnings per share as of December 31, 2021, 2020 and 2019.

Basic and diluted net and comprehensive income per share for the years ended December 31, 2021, 2020 and 2019, is as follows (amounts in thousands except unit and per unit data):


	2021		2020		2019
Numerator
Net and comprehensive income	$	36,932	$	17,040	$	15,842
Less: Preferred unit dividend unpaid	$	—	$	2,847	$	2,511
Less: Net and comprehensive income attributable to noncontrolling interest	15,815		10,958		8,315
Net and comprehensive income attributable to Arhaus, Inc.	$	21,117	$	3,235	$	5,016

Denominator—Weighted Average Shares Outstanding
Weighted-average number of common shares outstanding, basic	116,013,492		112,058,742		112,058,742
Effect of dilutive restricted stock	3,507,950		—		—
Weighted-average number of common shares outstanding, diluted	119,521,442		112,058,742		112,058,742

Net and Comprehensive Income Per Share
Net and comprehensive income per share, basic	$	0.18	$	0.03	$	0.04
Net and comprehensive income per share, diluted	$	0.18	$	0.03	$	0.04

Commitments and Contingencies	12 Months Ended
Commitments and Contingencies	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	Commitments and ContingenciesThe Company is involved in litigation and claims that are incidental to its business. Although the outcome of these matters cannot be determined at the present time, management of the Company believes that the ultimate resolution of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.From time to time, the Company has received inquiries from a number of state and local taxing agencies with respect to the remittance of sales, use, telecommunications, excise, and income taxes. Several jurisdictions are currently conducting tax audits of the Company's records. The Company collects, or has accrued for, taxes that it believes are required to be remitted. The amounts that have been remitted have historically been within the accruals established by the Company. The Company adjusts its accrual when facts relating to specific exposures warrant such adjustment. As of December 31, 2021 and 2020, we recorded liabilities of $1.2 million and $1.2 million, respectively, in accrued other expenses on the consolidated balance sheets for non-income tax matters that were probable and reasonably estimable.

Related Party Transactions	12 Months Ended
Related Party Transactions	Dec. 31, 2021
Related Party Transactions [Abstract]
Related Party Transactions	Related Party Transactions The Company has beneficial owners and affiliated entities under the related party definition in ASC 850, “Related Party Disclosures.” Related parties include those defined in the Company’s proxy statement which has been incorporated by reference herein. In accordance with the change in reporting entity, the Company’s consolidated financial statements include a related-party receivable between Homeworks and Reed. The related-party receivable of $0.1 million is included within prepaid and other current assets on the consolidated balance sheets at December 31, 2020. In January of 2021, the Company also entered into a related-party note receivable with Reed for $1.0 million. The full principal on the note and accrued interest were received in May 2021. In accordance with the Reorganization, the Company has accounts payable due to the former noncontrolling interests of LLC for state and federal income tax refunds filed for tax periods prior to the Reorganization. The accounts payable due to related parties of $2.9 million at December 31, 2021 are included within accounts payable on the consolidated balance sheets. For additional discussion of the Company’s related party transactions see Notes 1, 5, 6 and 9.

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Income Tax Disclosure

Income Taxes

Components of income (loss) before provision for (benefit from) income taxes include (in thousands):


	2021		2020
Domestic	$	26,788	$	17,823
Foreign	—		—
Income (loss) before taxes	$	26,788	$	17,823

The components of the provision for (benefit from) income taxes include (in thousands):


	2021		2020
Current
Federal	$	112	$	—
State	218		783
Total current expense (benefit)	330		783
Deferred
Federal (1)	(7,754)
State (1)	(2,720)
Total deferred expense (benefit)	(10,474)		—
Income tax expense (benefit)	$	(10,144)	$	783

(1) The 2021 deferred tax benefit reflects the recognition of deferred taxes as a result of the Reorganization. After the Reorganization, Arhaus LLC’s taxable income flows through to FS Arhaus and Homeworks who are subject to U.S. federal and state corporate income taxes.

The difference between income taxes expected at the U.S. federal statutory income tax rate of 21% and the provision (benefit) for income taxes is summarized as follows:


	2021		2020
Federal statutory income tax rate	$	5,625	$	3,743
State taxes	101		783
Nontaxable partnership (a)	(6,999)		(3,743)
FS Arhaus and Homeworks investment in LLC (a)	(9,137)		—
Other	266		—
Provision (benefit) for income taxes	$	(10,144)	783

(a) Prior to the Reorganization, the Company was not subject to corporate income taxes. After the Reorganization, a deferred tax benefit related to Homeworks investment in the Arhaus, LLC partnership was recognized through income tax expense because Homeworks lost its nontaxable status through the Reorganization. The deferred tax benefit related to FS Arhaus, Inc.’s investment in Arhaus, LLC was recognized as a capital contribution to additional paid-in-capital for $17.4 million.

Components of our deferred tax assets and liabilities include (in thousands):


	2021		2020
Deferred tax assets
Interest expense carryforwards	$	7,465	$	—
Net operating loss carryforwards	1,768		—
FS Arhaus investment in LLC	13,034		—
Homeworks investment in LLC	5,417		—
Total deferred tax assets	27,684		—


Less: valuation allowance	—		—
Total deferred tax assets, net of valuation allowance	$	27,684	$	—

At year-end 2021, we have a federal NOL carryforward of $1.7 million that does not expire, state NOL carryforwards of $0.1 million that begin to expire in 2026 and an interest expense carryforward of $7.5 million that does not expire. A portion of our interest carryforward is subject to Section 382 as a result of the Reorganization.

Based on available evidence (namely, a three-year cumulative income position), management believes it is more-likely-than-not that the net U.S. and state deferred tax assets will be fully realizable. We have not recorded a valuation allowance against deferred tax assets.

No unrecognized tax benefits have been recognized as of December 31, 2021 and 2020. We recognize accrued interest and penalties related to unrecognized tax benefits within the provision for income taxes in the consolidated statements of operations. There were no amounts of interest and penalties accrued as of December 31, 2021 and 2020.

We file income tax returns in the U.S. and various state and local jurisdictions. The tax years after 2017 remain open to examination by the state taxing jurisdictions in which the Company is subject to tax. As of December 31, 2021, the Company was not under examination by the Internal Revenue Service or any state tax jurisdiction.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation

Use of Estimates

Cash and Cash Equivalents

Cash and Cash EquivalentsThe Company considers cash and all other highly liquid investments with an original maturity of three months or less to be cash equivalents.

Restricted Cash Equivalents

Accounts Receivable

Revenue Recognition

Private Label Credit Card

Gift Cards

Merchandise Inventory

Advertising Costs

Property, Furniture and Equipment


Asset class/ type						Useful Life-Years
Leased property under capital lease						Term of the underlying lease
Leasehold improvements						Lesser of 10 years or lease term
Landlord improvements						Lesser of 10 years or lease term
Furniture and fixtures						3 to 5 years
Computers and equipment						3 to 10 years
Vehicles						5 to 10 years

Capitalized software costs relate to third-party developed software and are amortized on a straight-line basis over the estimated useful life of the software, which generally is three years.

Property, Furniture and Equipment, Impairment

Goodwill

•Deterioration in general economic conditions, limitations on accessing capital, or other developments in equity and credit markets;

•Cost factors that have a negative effect on earnings and cash flows;

•Overall financial performance;

•Changes in management, key personnel, strategy, or clients;

•A sustained decrease in share price in either absolute terms or relative to peers.

Long-Lived Assets

•A significant decrease in the market price of a long-lived asset or asset group;

•A significant adverse change in the extent or manner in which a long-lived asset or asset group is being used or in its physical condition;

•A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset or asset group, including an adverse action or assessment by a regulator;

•an accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset or asset group;

•A current expectation that, more likely than not, a long-lived asset or asset group will be sold or otherwise disposed of significantly before the end of its previously estimated useful life.

Deferred Rent and Lease Incentives

Merchandise Warranties

Income Taxes

Cost of Goods Sold

Selling, General and Administrative Expenses

Selling, General and Administrative ExpensesSelling, general and administrative expenses include all operating costs not included in cost of goods sold. These expenses include payroll and payroll related expenses, Showroom expenses other than occupancy,and expenses related to many of our operations at our corporate headquarters, including utilities, depreciation and amortization and marketing expense, which primarily includes catalog production, mailing and print advertising costs. Payroll includes both fixed compensation and variable compensation. Variable compensation includes Showroom commissions and Showroom bonus compensation related to demand, likely before the client obtains control of the merchandise. Variable compensation is primarily received by Showroom employees and is not significant in our eCommerce channel. All new Showroom opening expense other than occupancy are included in selling, general and administrative expenses and are expensed as incurred.

Loyalty Reward Program

Loyalty Reward ProgramIn January of 2019, the Company established a loyalty reward program for clients who use the Company’s private label credit card to receive rewards based on the client’s merchandise purchases. The liabilities associated with the rewards are established on the consolidated balance sheets when the rewards are issued and are removed from the consolidated balance sheets, either when used by the client or upon expiration (3 months from when the reward is issued).

Self Insurance Reserve

Self-InsuranceWe maintain insurance coverage for significant exposures as well as those risks that, by law, must be insured. In the case of health care coverage for employees, we have a managed self-insurance program related to claims filed. Expenses related to this self-insured program are computed on an actuarial basis, based on claims experience, regulatory requirements, an estimate of claims incurred but not yet reported (“IBNR”) and other relevant factors. The projections involved in this process are subject to uncertainty related to the timing and number of claims filed, levels of IBNR, fluctuations in health care costs and changes to regulatory requirements.

Fair Value of Financial Instruments

Fair Values of Financial Instruments

Level 1 Unadjusted quoted prices in active markets for identical, unrestricted assets and liabilities that the reporting entity has the ability to access at the measurement date.

Deferred Financing Fees

Equity Based Compensation

Net and comprehensive income (loss) per share

New Accounting Standards or Updates Adopted and Not Yet Adopted

New Accounting Standard or Updates Adopted

New Accounting Standards or Updates Not Yet Adopted

of $31.0 million. We currently do not expect ASU 2016-12 to have a material effect on our consolidated statements of comprehensive income.

Basis of Presentation and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Accounting Policies [Abstract]

Property, Furniture, and Equipment, Useful Life


Asset class/ type						Useful Life-Years
Leased property under capital lease						Term of the underlying lease
Leasehold improvements						Lesser of 10 years or lease term
Landlord improvements						Lesser of 10 years or lease term
Furniture and fixtures						3 to 5 years
Computers and equipment						3 to 10 years
Vehicles						5 to 10 years

Merchandise Warranty Liability

A reconciliation of the changes in our limited merchandise warranty liability were as follows (amounts in thousands):


	2021		2020
Balance as of beginning of year	$	3,326	$	3,164
Accruals during the year	7,903		4,548
Settlements during the year	(6,505)		(4,386)
Balance as of end of the year (1)	$	4,724	$	3,326

(1) $2.7 million and $1.8 million were recorded in accrued other expenses at December 31, 2021 and 2020, respectively. The remainder is recorded in other long-term liabilities.

Property, Furniture, and Equipment (Tables)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, furniture and equipment, net consists of the following at December 31, 2021 and 2020 (amounts in thousands):


	2021		2020
Leased property under capital lease	$	48,303	$	45,205
Leasehold improvements	42,418		39,704
Landlord improvements	137,106		126,245
Furniture and fixtures	5,411		4,598
Computer and equipment	25,124		17,965
Vehicles	9,229		78
Build-to-suit properties	31,017		—
Construction in process	10,457		638
	309,065		234,433
Less: Accumulated depreciation	(54,054)		(46,759)
Less: Landlord improvement accumulated depreciation	(75,380)		(69,978)
Property, furniture and equipment, net	$	179,631	$	117,696

Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2021

Debt Disclosure [Abstract]

Schedule of Fair Value Assumptions for Long-Term Debt

The key assumptions used within the valuation as December 31, 2020 were as follows:


Term . . . . . . . . . . . .			10 years
Risk-free rate of return			0.90%
Volatility . . . . . . . .			40.00%
Dividend yield . . . .			0%

Leases (Tables)

12 Months Ended

Dec. 31, 2021

Leases [Abstract]

Schedule of Future Minimum Lease Payments Under Capital Leases

Future minimum lease payments for the capital lease related to the Company’s corporate headquarters and distribution center at December 31, 2021, are as follows (amounts in thousands):


Year Ending December 31,
2022	$	4,673
2023	4,673
2024	4,673
2025	4,673
2026	5,132
Thereafter	120,390
	144,214
Less: Amounts representing interest	(94,064)
	$	50,150

Schedule of Future Minimum Rental Payments Under Operating Leases

Future minimum rental payments required under operating leases with initial or remaining noncancelable lease terms in excess of one year at December 31, 2021, are as follows (amounts in thousands):


Year Ending December 31,	Third Party		Related Party		Total
2022	$	43,540	$	2,352	$	45,892
2023	41,145		2,362		43,507
2024	37,191		1,468		38,659
2025	32,159		966		33,125
2026	29,105		798		29,903
Thereafter	125,252		4,246		129,498
	$	308,392	$	12,192	$	320,584

Equity Based Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Fair Value Assumptions

The key assumptions used for the January 31, 2019 and September 30, 2019 Class F/F-1 incentive unit grants within the Black-Scholes model were as follows:


	September 30, 2019	January 31, 2019
Term	5 years	5 years
Risk-free rate of return	1.90%	2.60%
Volatility	36.10%	73.40%
Dividend yield	0%	0%

The option pricing model estimated the value using the Black-Scholes option pricing model.


			2021 Awards
Term			10 years
Risk-free rate of return			1.50%
Volatility			40.00%
Dividend yield			0%

Incentive Unit Activity

Prior to the Reorganization in November 2021, the Incentive Unit activity for the period prior to the Reorganization in 2021 and the year ended December 31, 2020, was as follows:


	Incentive Units
	Class C			Class D			Class F/F-1			Class G
	Units	Weighted Average Grant Date Fair Value		Units	Weighted Average Grant Date Fair Value		Units	Weighted Average Grant Date Fair Value (1)		Units	Weighted Average Grant Date Fair Value
December 31, 2019	1,868,913	$	0.57	96,318	$	0.83	4,984,390	$	0.63	—	$	—
Purchased	—			—			(36,638)	0.36		—
Forfeited	—			—			(566,722)	0.61		—
December 31, 2020	1,868,913	0.57		96,318	0.83		4,381,030	0.63		—	—
Granted										701,965	18.10
Forfeited	—			—			(109,916)	0.77
November 7, 2021	1,868,913	$	0.57	96,318	$	0.83	4,271,114	$	0.63	701,965	$	18.10

(1) - For each Class F Unit a corresponding Class F-1 Unit is authorized, issued and outstanding. The Class F Units and Class F-1 Units are aggregated for purposes of valuation

The Exchanged Stock activity from the Reorganization to December 31, 2021, is as follows:


	Common Stock						Restricted Stock
	Class A			Class B			Class A			Class B
	Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value		Shares	Weighted Average Grant Date Fair Value
November 8, 2021	—	—		—	—		—	—		—	—
Issued	5,836,278	$	16.28	6,148,146	$	0.13	2,520,227	$	16.28	596,598	$	0.13
December 31, 2021	5,836,278	$	16.28	6,148,146	$	0.13	2,520,227	$	16.28	596,598	$	0.13

Incentive Units Vested

Vested Incentive Units prior to the Reorganization in 2021 and the year-ended December 31, 2020, was as follows:


	Incentive Units
	Class C	Class D	Class F/F-1	Class G
December 31, 2020	1,653,476	96,318	2,167,547	—
November 7, 2021	1,868,913	96,318	2,982,442	—

Segment Reporting (Tables)

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Net Revenue by Segment

The following table shows revenue by merchandise sales channel for the years ended December 31, 2021, 2020 and 2019 (amounts in thousands):


	2021		2020		2019
Retail	$	652,790	$	417,426	$	439,660
eCommerce	144,132		90,003		54,878
Total Net revenue	$	796,922	$	507,429	$	494,538

Net and Comprehensive Income per Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Calculation of Basic and Diluted Earnings Per Share

Basic and diluted net and comprehensive income per share for the years ended December 31, 2021, 2020 and 2019, is as follows (amounts in thousands except unit and per unit data):


	2021		2020		2019
Numerator
Net and comprehensive income	$	36,932	$	17,040	$	15,842
Less: Preferred unit dividend unpaid	$	—	$	2,847	$	2,511
Less: Net and comprehensive income attributable to noncontrolling interest	15,815		10,958		8,315
Net and comprehensive income attributable to Arhaus, Inc.	$	21,117	$	3,235	$	5,016

Denominator—Weighted Average Shares Outstanding
Weighted-average number of common shares outstanding, basic	116,013,492		112,058,742		112,058,742
Effect of dilutive restricted stock	3,507,950		—		—
Weighted-average number of common shares outstanding, diluted	119,521,442		112,058,742		112,058,742

Net and Comprehensive Income Per Share
Net and comprehensive income per share, basic	$	0.18	$	0.03	$	0.04
Net and comprehensive income per share, diluted	$	0.18	$	0.03	$	0.04

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Income (Loss) Before Provision for (Benefit from) Income Taxes

Components of income (loss) before provision for (benefit from) income taxes include (in thousands):


	2021		2020
Domestic	$	26,788	$	17,823
Foreign	—		—
Income (loss) before taxes	$	26,788	$	17,823

Schedule of Components of the Provision for (Benefit from) Income Taxes

The components of the provision for (benefit from) income taxes include (in thousands):


	2021		2020
Current
Federal	$	112	$	—
State	218		783
Total current expense (benefit)	330		783
Deferred
Federal (1)	(7,754)
State (1)	(2,720)
Total deferred expense (benefit)	(10,474)		—
Income tax expense (benefit)	$	(10,144)	$	783

Schedule of Effective Income Tax Rate Reconciliation

The difference between income taxes expected at the U.S. federal statutory income tax rate of 21% and the provision (benefit) for income taxes is summarized as follows:


	2021		2020
Federal statutory income tax rate	$	5,625	$	3,743
State taxes	101		783
Nontaxable partnership (a)	(6,999)		(3,743)
FS Arhaus and Homeworks investment in LLC (a)	(9,137)		—
Other	266		—
Provision (benefit) for income taxes	$	(10,144)	783

Schedule of Deferred Tax Assets and Liabilities

Components of our deferred tax assets and liabilities include (in thousands):


	2021		2020
Deferred tax assets
Interest expense carryforwards	$	7,465	$	—
Net operating loss carryforwards	1,768		—
FS Arhaus investment in LLC	13,034		—
Homeworks investment in LLC	5,417		—
Total deferred tax assets	27,684		—


Less: valuation allowance	—		—
Total deferred tax assets, net of valuation allowance	$	27,684	$	—

Nature of Business (Details)			12 Months Ended
Nature of Business (Details)	Nov. 08, 2021 $ / shares shares	Nov. 04, 2021 USD ($) $ / shares shares	Dec. 31, 2021 USD ($) stores $ / shares shares	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Nature of Business [Line Items]
Number of showrooms \| stores			79
Proceeds from sale of stock under IPO			$ 157,258,000	$ 0	$ 0
Payments of offering costs			5,907,000	0	$ 0
Cash and cash equivalents			123,777,000	57,093,000
Noncontrolling interest			$ 0	(7,689,000)
Common stock , shares authorized (in shares) \| shares	750,000,000
Preferred stock, shares authorized (in shares) \| shares	50,000,000
Homeworks
Nature of Business [Line Items]
Cash and cash equivalents				6,400,000
Deferred compensation liability				5,000,000
Noncontrolling interest				$ (7,700,000)
Restricted Stock
Nature of Business [Line Items]
Stock issued in Reorganization (in shares) \| shares	127,159,991
Loan Payable \| Term Loan
Nature of Business [Line Items]
Loan, exit fee, payment		$ 64,100,000
Class A
Nature of Business [Line Items]
Common stock , shares authorized (in shares) \| shares	600,000,000		600,000,000
Common stock, par value (in dollars per share) \| $ / shares			$ 0.001
Stock issued in Reorganization (in shares) \| shares	39,623,041
Class A \| Restricted Stock
Nature of Business [Line Items]
Stock issued in Reorganization (in shares) \| shares	2,520,227
Class A \| IPO
Nature of Business [Line Items]
Sale of stock, shares sold (in shares) \| shares		12,903,226
Sale of stock, price per share (in dollars per share) \| $ / shares		$ 13.00
Proceeds from sale of stock under IPO		$ 151,400,000
Common stock, discount on shares		10,400,000
Payments of offering costs		$ 5,900,000
Class B
Nature of Business [Line Items]
Common stock , shares authorized (in shares) \| shares	100,000,000		100,000,000
Common stock, par value (in dollars per share) \| $ / shares	$ 0.001		$ 0.001
Stock issued in Reorganization (in shares) \| shares	87,536,950
Class B \| Restricted Stock
Nature of Business [Line Items]
Stock issued in Reorganization (in shares) \| shares	596,598
Preferred Stock
Nature of Business [Line Items]
Common stock, par value (in dollars per share) \| $ / shares	$ 0.001

Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) stores	Dec. 31, 2021 USD ($)	Dec. 31, 2021 USD ($) segment	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jan. 01, 2022 USD ($)
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cash and cash equivalents	$ 123,777	$ 123,777	$ 123,777	$ 123,777	$ 123,777	$ 57,093
Accounts receivable, net	228	228	228	228	228	600
Allowance for doubtful accounts	200	200	200	200	200	300
Allowance for sales returns	5,600	5,600	5,600	$ 5,600	5,600	5,100
Client deposits, percentage collected (at least)				50.00%
Merchandise inventory reserve	4,200	4,200	4,200	$ 4,200	4,200	2,700
Prepaid capital costs	11,500	11,500	11,500	11,500	11,500	10,200
Advertising costs		35,900				24,400	$ 23,400
Depreciation and amortization		23,922				16,957	15,964
Unrecognized tax benefits	0	0	0	0	0	0
Unrecognized tax benefits, penalties and interest expense		0				0	$ 0
Other accrued expenses, loyalty program	1,300	1,300	1,300	1,300	1,300	900
Self insurance liability	900	900	900	900	900	600
Workers' compensation liability	200	200	200	200	200	$ 400
Construction costs	31,000	31,000	$ 31,000	$ 31,000	$ 31,000
Number of operating segments (in segments)			1		1
Number of reporting units \| stores			1
Immaterial error correction, unrecorded		3,000
Vendor 1 \| Accounts Payable \| Product Concentration Risk
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Concentration risk (percent)				18.00%		25.00%
Other Accrued Expenses
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other accrued expenses, gift cards	$ 900	900	$ 900	$ 900	$ 900	$ 800
Minimum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Merchandise warranty, term	3 years
Minimum \| Subsequent Event \| Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets								$ 227,700
Operating lease liabilities								310,600
Minimum \| Software and Software Development Costs
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Estimated useful life	3 years
Maximum
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Merchandise warranty, term	10 years
Maximum \| Subsequent Event \| Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Operating lease right-of-use assets								246,700
Operating lease liabilities								$ 336,500
In-Transit from Credit Card Companies
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Cash and cash equivalents	$ 9,100	$ 9,100	$ 9,100	$ 9,100	$ 9,100	$ 5,700

Basis of Presentation and Summary of Significant Accounting Policies - Property, Furniture, and Equipment, Useful Life (Details)	12 Months Ended
	Dec. 31, 2021
Maximum \| Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Maximum \| Landlord improvements
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Maximum \| Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Maximum \| Computer and equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Maximum \| Vehicles
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	10 years
Minimum \| Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Minimum \| Computer and equipment
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Minimum \| Vehicles
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years

Basis of Presentation and Summary of Significant Accounting Policies - Merchandise Warranty Liability (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance as of beginning of year	$ 3,326	$ 3,164
Accruals during the year	7,903	4,548
Settlements during the year	(6,505)	(4,386)
Balance as of the end of the period	4,724	3,326
Accrued other expenses	$ 2,700	$ 1,800

Property, Furniture, and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Property, furniture and equipment, gross	$ 309,065	$ 234,433
Less: Accumulated depreciation	(54,054)	(46,759)
Less: Landlord improvement accumulated depreciation	(75,380)	(69,978)
Property, furniture and equipment, net	179,631	117,696
Leased property under capital lease
Property, Plant and Equipment [Line Items]
Property, furniture and equipment, gross	48,303	45,205
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, furniture and equipment, gross	42,418	39,704
Landlord improvements
Property, Plant and Equipment [Line Items]
Property, furniture and equipment, gross	137,106	126,245
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, furniture and equipment, gross	5,411	4,598
Computer and equipment
Property, Plant and Equipment [Line Items]
Property, furniture and equipment, gross	25,124	17,965
Vehicles
Property, Plant and Equipment [Line Items]
Property, furniture and equipment, gross	9,229	78
Build-to-suit properties
Property, Plant and Equipment [Line Items]
Property, furniture and equipment, gross	31,017	0
Construction in process
Property, Plant and Equipment [Line Items]
Property, furniture and equipment, gross	$ 10,457	$ 638

Long-Term Debt - Narrative (Details) - USD ($)					12 Months Ended
Long-Term Debt - Narrative (Details) - USD ($)	Dec. 31, 2021	Nov. 04, 2021	Dec. 31, 2020	Jun. 24, 2020	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Nov. 30, 2021	Nov. 08, 2021	Dec. 28, 2020	Jun. 25, 2020
Debt Instrument [Line Items]
Unamortized financing costs										$ 700,000
Derivative expense associated with Term Loan exit fee					$ 44,544,000	$ 17,928,000	$ 0
Loss on extinguishment of debt					(1,450,000)	0	0
Loan Payable \| Term Loan
Debt Instrument [Line Items]
Credit facility, face amount				$ 40,000,000
Amortization of loan costs					600,000	600,000
Stated interest rate				16.00%
Loan prepayment (not less than)				50.00%
Loan prepayment premium				1.00%
Loan, exit fee, face amount				$ 3,000,000
Loan, exit fee clause, percentage of total equity				4.00%
Loan, derivative liability			$ 19,600,000			19,600,000
Debt Instrument, Exit Fee Clause, Fair Value								$ 64,100,000
Derivative expense associated with Term Loan exit fee					44,500,000	17,900,000
Loan Payable \| Term Loan \| Cash
Debt Instrument [Line Items]
Stated interest rate				12.00%
Loan Payable \| Term Loan \| Paid In Kind
Debt Instrument [Line Items]
Stated interest rate				4.00%
Promissory Note \| Homeworks
Debt Instrument [Line Items]
Interest expense, debt						400,000	400,000
Revolving Credit Facility \| 2021 Credit Facility
Debt Instrument [Line Items]
Credit facility, face amount									$ 50,000,000
Credit facility, basis spread on variable rate	1.75%
Loan costs, net	$ 300,000				300,000
Credit facility borrowings	0				$ 0
Revolving Credit Facility \| Credit Agreement \| Credit Agreement - Revolver
Debt Instrument [Line Items]
Credit facility, face amount											$ 30,000,000
Credit facility, basis spread on variable rate			5.50%
Credit facility, available borrowing capacity			$ 3,100,000			3,100,000
Credit facility, unused capacity, non-use fee					0.50%
Loan costs, net	$ 1,500,000				$ 1,500,000
Amortization of loan costs					$ 400,000	200,000
Write off of unamortized loan costs		$ 800,000
Credit facility, early termination fee		600,000
Loss on extinguishment of debt		$ 1,400,000
Revolving Credit Facility \| Credit Agreement \| Credit Agreement - Prior Revolver
Debt Instrument [Line Items]
Credit facility, unused capacity, non-use fee				0.50%
Loan costs, net											$ 600,000
Amortization of loan costs						$ 200,000	$ 500,000
Revolving Credit Facility \| Credit Agreement \| Credit Agreement - Prior Revolver \| Fed Funds Rate
Debt Instrument [Line Items]
Credit facility, basis spread on variable rate				0.50%
Revolving Credit Facility \| Credit Agreement \| Credit Agreement - Prior Revolver \| LIBOR
Debt Instrument [Line Items]
Credit facility, basis spread on variable rate				1.00%			6.25%
Revolving Credit Facility \| Credit Agreement \| Credit Agreement - Prior Revolver \| Base Rate
Debt Instrument [Line Items]
Credit facility, basis spread on variable rate				4.00%
Revolving Credit Facility \| Letter of Credit \| 2021 Credit Facility
Debt Instrument [Line Items]
Credit facility, face amount									10,000,000
Revolving Credit Facility \| Swingline Loan \| 2021 Credit Facility
Debt Instrument [Line Items]
Credit facility, face amount									$ 5,000,000

Long-Term Debt - Fair Value Assumptions (Details) - Level 3 - Discounted Cash Flow	Dec. 31, 2020 yr
Term
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	10
Risk-free rate of return
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.0090
Volatility
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0.4000
Dividend yield
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative liability, measurement input	0

Leases - Narrative (Details) $ in Thousands	1 Months Ended		12 Months Ended
Leases - Narrative (Details) $ in Thousands	Sep. 30, 2021 USD ($)	Sep. 30, 2014 USD ($)	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2021	Dec. 31, 2016 USD ($)	Dec. 31, 2014 lease_renewal
Operating Leased Assets [Line Items]
Rent expense			$ 66,500	$ 58,600	$ 57,300
Percentage rent expense			6,100	1,000	1,500
Deferred rent and lease incentives			63,037	71,213
Operating lease, term						12 years
Construction costs			31,000
Related Party
Operating Leased Assets [Line Items]
Operating lease, term								17 years
Capital lease obligations			2,400				$ 45,000
Capital leases, accumulated amortization			9,900	5,300
Renewal Term, Five Years \| Related Party
Operating Leased Assets [Line Items]
Operating lease, renewal term								5 years
Number of additional renewal options \| lease_renewal								2
Minimum
Operating Leased Assets [Line Items]
Operating lease, renewal term						5 years
Minimum \| Base term, 17 years \| Related Party
Operating Leased Assets [Line Items]
Rent expense		$ 200
Minimum \| Base term, 12 years
Operating Leased Assets [Line Items]
Rent expense			200
Minimum \| Renewal term, 10 years
Operating Leased Assets [Line Items]
Rent expense			400
Minimum \| Renewal term, 10 years \| Related Party
Operating Leased Assets [Line Items]
Rent expense	$ 600	500
Maximum
Operating Leased Assets [Line Items]
Operating lease, renewal term						10 years
Maximum \| Related Party
Operating Leased Assets [Line Items]
Operating lease, renewal term								10 years
Maximum \| Base term, 17 years \| Related Party
Operating Leased Assets [Line Items]
Rent expense		500
Maximum \| Base term, 12 years
Operating Leased Assets [Line Items]
Rent expense			300
Maximum \| Renewal term, 10 years
Operating Leased Assets [Line Items]
Rent expense			500
Maximum \| Renewal term, 10 years \| Related Party
Operating Leased Assets [Line Items]
Rent expense		$ 600
Leasehold improvements
Operating Leased Assets [Line Items]
Amortization			$ 13,500	$ 10,400	$ 8,700

Leases - Future Minimum Lease Payments, Capital Leases (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Capital Leases, Future Minimum Payments [Abstract]
2022	$ 4,673
2023	4,673
2024	4,673
2025	4,673
2026	5,132
Thereafter	120,390
Finance lease liability, payment, due	144,214
Less: Amounts representing interest	(94,064)
Finance lease liability	$ 50,150

Leases - Future Minimum Rental Payments, Operating Leases (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Operating Leases, Future Minimum Payments [Abstract]
2022	$ 45,892
2023	43,507
2024	38,659
2025	33,125
2026	29,903
Thereafter	129,498
Future minimum rental payments	320,584
Third Party
Operating Leases, Future Minimum Payments [Abstract]
2022	43,540
2023	41,145
2024	37,191
2025	32,159
2026	29,105
Thereafter	125,252
Future minimum rental payments	308,392
Related Party
Operating Leases, Future Minimum Payments [Abstract]
2022	2,352
2023	2,362
2024	1,468
2025	966
2026	798
Thereafter	4,246
Future minimum rental payments	$ 12,192

Employee Benefit Plans (Details) - USD ($) $ in Millions	12 Months Ended
Employee Benefit Plans (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Retirement Benefits [Abstract]
Defined contribution plan costs	$ 2.2	$ 0.5	$ 1.1

Mezzanine Equity and Stockholders'/Members' Equity (Deficit) - (Details) $ in Thousands			10 Months Ended	12 Months Ended
	Dec. 29, 2020 USD ($)	Jun. 26, 2017 USD ($) shares	Nov. 03, 2021 USD ($) shares	Dec. 31, 2021 USD ($) vote	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	May 31, 2021 shares
Class of Stock [Line Items]
Number of voting shares (in shares)			645
Number of non-voting shares (in shares)			4,158
Distributions to noncontrolling interest holders \| $				$ (61,915)	$ 0	$ 0
Proceeds from issuance of mezzanine equity \| $		$ 25,000
Mezzanine equity, dividend rate (in dollars per share)		16.00%
Payments of preferred units dividends \| $				0	(8,553)	0
Payments of tax distributions \| $				$ (7,900)	$ (10,900)	$ (5,100)
Payments of pre-IPO dividend to noncontrolling interests of Arhaus, LLC \| $			$ (100,000)
Noncontrolling interests
Class of Stock [Line Items]
Payments of pre-IPO dividend to noncontrolling interests of Arhaus, LLC \| $			(50,700)
Owners
Class of Stock [Line Items]
Payments of pre-IPO dividend to noncontrolling interests of Arhaus, LLC \| $			$ (49,300)
Preferred Units
Class of Stock [Line Items]
Payments of preferred units dividends \| $	$ (8,600)
Class A Preferred Units
Class of Stock [Line Items]
Issuance of mezzanine equity (in shares)		1,250,000
Class B Preferred Units
Class of Stock [Line Items]
Issuance of mezzanine equity (in shares)		1,250,000
Class A Units
Class of Stock [Line Items]
Issuance of mezzanine equity (in shares)		20,938,265
Class B Units
Class of Stock [Line Items]
Issuance of mezzanine equity (in shares)		7,488,248
Class C
Class of Stock [Line Items]
Issuance of mezzanine equity (in shares)		3,185,435
Class D
Class of Stock [Line Items]
Issuance of mezzanine equity (in shares)		285,387
Class F
Class of Stock [Line Items]
Issuance of mezzanine equity (in shares)		3,158,501
Class F \| Incentive Units
Class of Stock [Line Items]
Number of shares authorized (in shares)							2,190,514
Class F1
Class of Stock [Line Items]
Issuance of mezzanine equity (in shares)		3,158,501
Class F1 \| Incentive Units
Class of Stock [Line Items]
Number of shares authorized (in shares)							2,190,514
Class A
Class of Stock [Line Items]
Number of votes per share \| vote				1
Class B
Class of Stock [Line Items]
Number of votes per share \| vote				10

Equity Based Compensation - Narrative (Details) - USD ($) $ in Thousands		3 Months Ended	10 Months Ended	12 Months Ended
	Dec. 31, 2021	Jul. 31, 2021	Nov. 08, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	May 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Deferred compensation liability, current					$ 1,100
Deferred compensation liability, noncurrent					3,900
Shareholder capital contribution	$ 3,900		$ 3,872
Incentive Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unit compensation expense				$ 1,800	400	$ 300
Unrecognized compensation cost	$ 11,600			$ 11,600
Unrecognized compensation cost, period for recognition				4 years 3 months 21 days
Dividend yield				0.00%
Grant date fair value for units vested during period				$ 300	$ 400
Incentive Units \| Class G
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)							967,987
Award vesting period		5 years
Incentive Units \| Class C, D, F and F-1 \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period		3 years
Incentive Units \| Class C, D, F and F-1 \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period		5 years
Common Stock \| Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unit compensation expense				4,600
Share-based payment arrangement, expense, tax benefit				$ 2,800

Equity Based Compensation - Fair Value Assumptions (Details) - Incentive Units			12 Months Ended
	Sep. 30, 2019	Jan. 31, 2019	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term			10 years
Risk-free rate of return			1.50%
Volatility			40.00%
Dividend yield			0.00%
Class F/F-1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Term	5 years	5 years
Risk-free rate of return	1.90%	2.60%
Volatility	36.10%	73.40%
Dividend yield	0.00%	0.00%

Equity Based Compensation - Incentive Unit Activity (Details) - $ / shares		2 Months Ended	3 Months Ended	12 Months Ended
	Nov. 08, 2021	Dec. 31, 2021	Jul. 31, 2021	Dec. 31, 2021	Dec. 31, 2020
Class C \| Incentive Units
Units
Outstanding, beginning of period (in shares)				1,868,913	1,868,913
Purchased (in shares)					0
Granted (in shares)
Forfeited (in shares)				0	0
Outstanding, end of period (in shares)		1,868,913		1,868,913	1,868,913
Weighted Average Grant Date Fair Value
Outstanding, beginning of period (in dollars per share)				$ 0.57	$ 0.57
Purchased (in dollars per share)
Granted (in dollars per share)
Forfeited (in dollars per share)
Outstanding, end of period (in dollars per share)		$ 0.57		$ 0.57	$ 0.57
Class D \| Incentive Units
Units
Outstanding, beginning of period (in shares)				96,318	96,318
Purchased (in shares)					0
Granted (in shares)
Forfeited (in shares)				0	0
Outstanding, end of period (in shares)		96,318		96,318	96,318
Weighted Average Grant Date Fair Value
Outstanding, beginning of period (in dollars per share)				$ 0.83	$ 0.83
Purchased (in dollars per share)
Granted (in dollars per share)
Forfeited (in dollars per share)
Outstanding, end of period (in dollars per share)		$ 0.83		$ 0.83	$ 0.83
Class F/F-1 \| Incentive Units
Units
Outstanding, beginning of period (in shares)				4,381,030	4,984,390
Purchased (in shares)					(36,638)
Granted (in shares)
Forfeited (in shares)				(109,916)	(566,722)
Outstanding, end of period (in shares)		4,271,114		4,271,114	4,381,030
Weighted Average Grant Date Fair Value
Outstanding, beginning of period (in dollars per share)				$ 0.63	$ 0.63
Purchased (in dollars per share)					0.36
Granted (in dollars per share)
Forfeited (in dollars per share)				0.77	0.61
Outstanding, end of period (in dollars per share)		$ 0.63		$ 0.63	$ 0.63
Class G \| Incentive Units
Units
Outstanding, beginning of period (in shares)				0	0
Purchased (in shares)					0
Granted (in shares)			701,965	701,965
Forfeited (in shares)					0
Outstanding, end of period (in shares)		701,965		701,965	0
Weighted Average Grant Date Fair Value
Outstanding, beginning of period (in dollars per share)				$ 0	$ 0
Purchased (in dollars per share)
Granted (in dollars per share)				18.10
Forfeited (in dollars per share)
Outstanding, end of period (in dollars per share)		$ 18.10		$ 18.10	$ 0
Class A \| Common Stock
Units
Outstanding, beginning of period (in shares)		0
Granted (in shares)		5,836,278
Outstanding, end of period (in shares)	0	5,836,278		5,836,278
Weighted Average Grant Date Fair Value
Outstanding, beginning of period (in dollars per share)		$ 0
Granted (in dollars per share)		16.28
Outstanding, end of period (in dollars per share)	$ 0	$ 16.28		$ 16.28
Class A \| Restricted Stock
Units
Outstanding, beginning of period (in shares)		0
Outstanding, end of period (in shares)	0	2,520,227		2,520,227
Weighted Average Grant Date Fair Value
Outstanding, beginning of period (in dollars per share)		$ 0
Granted (in dollars per share)	$ 16.28
Outstanding, end of period (in dollars per share)	$ 0	$ 16.28		$ 16.28
Class B \| Common Stock
Units
Outstanding, beginning of period (in shares)		0
Granted (in shares)		6,148,146
Outstanding, end of period (in shares)	0	6,148,146		6,148,146
Weighted Average Grant Date Fair Value
Outstanding, beginning of period (in dollars per share)		$ 0
Granted (in dollars per share)		0.13
Outstanding, end of period (in dollars per share)	$ 0	$ 0.13		$ 0.13
Class B \| Restricted Stock
Units
Outstanding, beginning of period (in shares)		0
Outstanding, end of period (in shares)	0	596,598		596,598
Weighted Average Grant Date Fair Value
Outstanding, beginning of period (in dollars per share)		$ 0
Granted (in dollars per share)	$ 0.13
Outstanding, end of period (in dollars per share)	$ 0	$ 0.13		$ 0.13

Equity Based Compensation - Incentive Units Vested (Details) - Incentive Units - shares	Nov. 07, 2021	Dec. 31, 2020
Class C
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested incentive units (in shares)	1,868,913	1,653,476
Class D
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested incentive units (in shares)	96,318	96,318
Class F/F-1
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested incentive units (in shares)	2,982,442	2,167,547
Class G
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vested incentive units (in shares)	0	0

Segment Reporting (Details) $ in Thousands	12 Months Ended
Segment Reporting (Details) $ in Thousands	Dec. 31, 2021 USD ($)	Dec. 31, 2021 stores	Dec. 31, 2021 segment	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Segment Reporting [Abstract]
Number of operating segments (in segments)		1	1
Number of reportable segments (in segments) \| segment			1
Segment Reporting Information [Line Items]
Net revenue	$ 796,922			$ 507,429	$ 494,538
Retail
Segment Reporting Information [Line Items]
Net revenue	652,790			417,426	439,660
eCommerce
Segment Reporting Information [Line Items]
Net revenue	$ 144,132			$ 90,003	$ 54,878

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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-Section 50
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
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-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130545-203045

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Net and Comprehensive Income per Share - Narrative (Details)	12 Months Ended
	Dec. 31, 2021 shares
Class B
Class of Stock [Line Items]
Shares issued (in shares)	80,792,206
Class A
Class of Stock [Line Items]
Shares issued (in shares)	31,266,536

Net and Comprehensive Income per Share - Calculation of EPS (Details) - USD ($) $ / shares in Units, $ in Thousands	2 Months Ended	10 Months Ended	12 Months Ended
	Dec. 31, 2021	Nov. 08, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Numerator
Net income	$ 13,089	$ 23,843	$ 36,932	$ 17,040	$ 15,842
Comprehensive income			36,932	17,040	15,842
Less: Preferred unit dividend unpaid			0	2,847	2,511
Less: Comprehensive income attributable to noncontrolling interest			15,815	10,958	8,315
Less: Net income attributable to noncontrolling interest			15,815	10,958	8,315
Net and comprehensive income attributable to Arhaus, Inc.			21,117	3,235	5,016
Comprehensive income (loss) attributable to Arhaus, Inc.			$ 21,117	$ 3,235	$ 5,016
Denominator - Basic and Diluted
Weighted-average number of common shares outstanding, basic (in shares)			116,013,492	112,058,742	112,058,742
Effect of dilutive restricted stock (in shares)			3,507,950	0	0
Weighted-average number of common shares outstanding, diluted (in shares)			119,521,442	112,058,742	112,058,742
Net and comprehensive income (loss) per unit, basic (in dollars per share)			$ 0.18	$ 0.03	$ 0.04
Net and comprehensive income (loss) per unit, diluted (in dollars per share)			$ 0.18	$ 0.03	$ 0.04

Commitments and Contingencies (Details) - USD ($) $ in Millions	Dec. 31, 2021	Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]
Loss contingency accrual	$ 1.2	$ 1.2

Related Party Transactions (Details) - USD ($) $ in Millions	Dec. 31, 2021	Jan. 31, 2021	Dec. 31, 2020
Related Party Transaction [Line Items]
Accounts receivable, related parties			$ 0.1
Accounts payable, related parties	$ 2.9
Reed
Related Party Transaction [Line Items]
Related party, note receivable		$ 1.0

Income Taxes - Income (Loss) Before Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Domestic	$ 26,788	$ 17,823
Foreign	0	0
Income before taxes	$ 26,788	$ 17,823	$ 16,210

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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-Topic 940
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-Section 25
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-URI http://asc.fasb.org/extlink&oid=123384075&loc=d3e41242-110953

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
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Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
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-Section S99
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-Subparagraph (SX 210.7-04(8))
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-Publisher FASB
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-Name Accounting Standards Codification
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+ Details

Income Taxes - Current and Deferred Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Disclosure [Abstract]
Federal	$ 112	$ 0
State	218	783
Total current expense (benefit)	330	783
Federal	(7,754)
State	(2,720)
Total deferred expense (benefit)	(10,474)	0
Provision (benefit) for income taxes	$ (10,144)	$ 783	$ 368

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Provision (Benefit) for Income Taxes (Details) - USD ($) $ in Thousands	2 Months Ended	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income Tax Examination [Line Items]
Federal statutory income tax rate		$ 5,625	$ 3,743
State taxes		101	783
Nontaxable partnership		(6,999)	(3,743)
FS Arhaus and Homeworks investment in LLC		(9,137)	0
Other		266	0
Provision (benefit) for income taxes		(10,144)	$ 783	$ 368
Deferred tax impact of Reorganization from partnership to a corporation	$ 17,436
Homeworks
Income Tax Examination [Line Items]
Deferred tax impact of Reorganization from partnership to a corporation		$ 17,400

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Valuation Allowance [Line Items]
Interest expense carryforwards	$ 7,465	$ 0
Net operating loss carryforwards	1,768	0
Total deferred tax assets	27,684	0
Less: valuation allowance	0	0
Total deferred tax assets, net of valuation allowance	27,684	0
FS Arhaus
Valuation Allowance [Line Items]
Investment in LLC	13,034	0
Homeworks
Valuation Allowance [Line Items]
Investment in LLC	$ 5,417	$ 0

Income Taxes - Narrative (Details) $ in Millions	Dec. 31, 2021 USD ($)
Domestic Tax Authority
Operating Loss Carryforwards [Line Items]
NOL carryforward	$ 1.7
State and Local Jurisdiction
Operating Loss Carryforwards [Line Items]
NOL carryforward	0.1
Foreign Tax Authority
Operating Loss Carryforwards [Line Items]
NOL carryforward	$ 7.5