The product will degrade and customer service will worsen, but all RH's institutional/government customers will stick with them anyway because they have policies mandating the use of RH. This will cause RH to be more profitable, and their execs to get bigger bonuses.
It is possible (but certainly not guaranteed) that eventually, after years, some competitor to RH will arise and get enough of these customers to switch to make a real dent in RH's profitability, but by then the execs will be long-gone and cruising on their yachts.
It is possible (but certainly not guaranteed) that eventually, after years, some competitor to RH will arise and get enough of these customers to switch to make a real dent in RH's profitability, but by then the execs will be long-gone and cruising on their yachts.