Silicon Investor - Restoration Hardware - (RSTO)

[more100] Restoration Hardware Holdings (RH +1.95%) plunged over 20% in pre-market trading...

more100 — 6/10/2016 3:34:07 AM

Restoration Hardware Holdings (RH +1.95%) plunged over 20% in pre-market trading after it reported an unexpected Q1 adjusted EPS loss of -5 cents, weaker than consensus of a 5 cent gain, and then cut its full-year adjusted EPS forecast to $1.60-$1.80, well below consensus of $2.66,

[JakeStraw] 4 Reasons Restoration Hardware Is Primed To Win news.investors.com

JakeStraw — 4/28/2015 10:21:13 AM

[Smiling Bob] [graphic]

Smiling Bob — 12/26/2012 2:39:41 PM

[Smiling Bob] Restoration Hardware Co-Chief Steps Down After an Inquiry By ANDREW ROSS SORKIN...

Smiling Bob — 11/2/2012 4:27:28 PM

Restoration Hardware Co-Chief Steps Down After an Inquiry By ANDREW ROSS SORKIN

Annie Tritt for The New York Times

1

Gary Friedman, the former co-chief of Restoration Hardware, who was confronted by the board this month.

Gary Friedman, the chairman and co-chief executive of Restoration Hardware, has stepped down from his positions after an internal inquiry into an intimate relationship he had with a 26-year-old female employee, according to people involved in the matter.

The leadership change earlier this week comes at a significant moment for Restoration Hardware as it prepares for an initial public offering. Mr. Friedman, 54, often appears in the company’s catalogs in jeans and a T-shirt and is considered the driving force behind the company’s vision and aesthetic, which includes high-priced faux antique furniture and hardware accessories. Mr. Friedman started his career as a stock boy at the Gap in San Francisco and was plucked out of obscurity by Mickey Drexler, the merchant prince who built Gap and now runs J. Crew.

Mr. Friedman worked his way up at Gap and later became the president and chief operating officer of Williams-Sonoma. He joined Restoration Hardware in 2001 when it was near bankruptcy and is widely credited with turning it into one of the nation’s most successful high-end furniture retailers.

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Mr. Friedman was confronted this month with the findings of the investigation by the company’s board, which had formed a special committee and hired the law firm Weil, Gotshal & Manges to conduct the inquiry. Mr. Friedman was found to have had an inappropriate relationship with a female employee, who has since left the company, these people said. These people spoke on the condition of anonymity because the company’s internal investigation has not been made public.

The board of Restoration Hardware was alerted to the relationship by an ex-boyfriend of the employee, these people said. Mr. Friedman, who has been divorced for seven years, is still in a relationship with the former employee.

The board, which began the investigation almost immediately after being contacted, was concerned about the credibility of the allegations because the ex-boyfriend had a criminal record and was aggressively pressing the accusations both inside and outside the company, these people said.

The employee told company investigators that the relationship with Mr. Friedman was consensual and ongoing, these people added, but the board was apparently concerned about the appearance of the relationship as its stock offering proceeded.

A spokesman for the company declined to comment. A spokesman for Mr. Friedman also declined to comment.

Mr. Friedman’s resignation comes at a time when corporate boards are taking a harder line when questionable personal conduct by top executives has been brought to their attention. In April, Brian Dunn, the chief executive of Best Buy resigned after the company’s board raised questions about an “inappropriate relationship” with a 29-year-old female employee.

Mark Hurd, the former chief executive of Hewlett-Packard lost his job in 2010 after it came to light that he once had a personal relationship with a female marketing contractor who had been an actress in risqué movies. H.P.’s directors said that Mr. Hurd had violated the company’s code of conduct with misstatements on expense reports.

Thus far, Restoration Hardware has been publicly silent on the reasons for the chief executive change. This week, Restoration Hardware announced in a news release a “reorganization” of the company’s management and named the company’s co-chief executive Carlos Alberini, who joined the company two years ago from Guess, as sole chief executive.

The company also said Mr. Friedman, who is the company’s largest individual shareholder, would be starting a new “incubator” company with ties to Restoration Hardware. It said he would be the nonexecutive chairman emeritus and continue in an “exclusive advisory role, serving as creator and curator for Restoration Hardware with a focus on strategy, creative, and design direction.”

The statement also said that Mr. Friedman’s new business “will be created to develop new lines of business, including apparel, accessories, footwear and jewelry, many of which will be complementary to the company’s new product development strategy.”

Restoration Hardware said that it was taking a minority interest in Mr. Friedman’s new company and “will have the exclusive right to acquire each of the new businesses when they reach an appropriate level of maturity and profitability.”

People briefed on the board’s deliberations said that the company wanted to maintain a relationship with Mr. Friedman because he was personally associated with the brand, but that it could not allow him to remain an officer ahead of the public offering.

Lawyers for Restoration Hardware were working on Thursday to update the company’s filings with the Securities and Exchange Commission, these people said. Goldman Sachs and Bank of America were selected to underwrite the offering. It was unclear whether the company would be forced to disclose the reason for Mr. Friedman’s new role or the findings of the special committee’s inquiry.

Restoration Hardware is controlled by two private equity firms, Catterton Partners and Tower Three Partners. The company, which was once public, was bought by the firms and Mr. Friedman in 2008 for about $175 million.

At the time, the company spurned an offer from Sears. Today, Restoration Hardware’s public offering is expected to value the company at up to $1 billion.

While Mr. Friedman may no longer be the chairman or co-chief executive, his picture and letter will appear in the company’s newest catalogs in the fall.

A version of this article appeared in print on 08/17/2012, on page B1 of the NewYork edition with the headline: Restoration Hardware Co-Chief Steps Down After an Inquiry.

[Glenn Petersen] A good debut for RH: Restoration Hardware Jumps in Market Debut By MICHAEL J...

Glenn Petersen — 11/2/2012 2:07:22 PM

A good debut for RH:

Restoration Hardware Jumps in Market Debut

By MICHAEL J. DE LA MERCED
DealBook
New York Times
November 2, 2012, 12:46 pm

Hurricane Sandy appears to have done little to dent investor appetite for Restoration Hardware, as the home furnishings retailer’s stock enjoyed a surge in its trading debut.

Shares in Restoration Hardware, which trade under the symbol “RH” on the New York Stock Exchange, opened up at $32.28, more than 35 percent higher than their initial offer price. The company already looked on track for a strong debut, with its shares having priced Thursday night at $24, the top of their range.

With shares at $31.73 as of midday on Friday, the retailer is worth nearly $1.2 billion.

All told, Restoration Hardware raised about $123.8 million in its offering. The company’s cut of the proceeds will be used to pay down debt taken on by its 2008 leveraged buyout. Several existing shareholders will also cash out some of their holdings.

The retailer is the most prominent of the three companies that began trading on Friday after a storm-shortened week. The stocks of all three — Restoration Hardware and the oil industry companies Delek Logistics and Southcross Energy Partners — opened with double-digit gains.

Gary Friedman, the company’s chairman emeritus and a top adviser, recalled how the usual I.P.O. roadshow was shortened by a few days because of the storm. But after talking with investors during the roughly week-and-a-half trip, executives determined that they should still seek to price the stock sale.

“We have had to sail through a storm on this one,” Mr. Friedman said, adding that “our hearts go out to all of those who have been victimized by the storm.”

Other moments during the run-up to Restoration Hardware’s debut on the N.Y.S.E. proved painful as well. Perhaps chief among them was the departure of Mr. Friedman as co-chief executive, following a board inquiry into his relationship with a 26-year-old employee. (“I never knew my personal life would be so popular with the press,” he joked.)

Mr. Friedman, who joined the retailer in 2001 and is credited with saving it from bankruptcy, remains the company’s biggest shareholder. He has formed a new company, Hierarchy, that will offer fashion and apparel, but he said that the “vast majority” of his time was being spent on Restoration Hardware.

He called Friday’s debut the ultimate response to those who thought the company doomed at points during his tenure.

“A lot of people thought that this company would never make it, a lot of naysayers said that we’d go bankrupt,” Mr. Friedman said. “For all the people who fought through the adversity, this is a day of great pride and day of great opportunity.”

The question now is what road Restoration Hardware will take as a public company. Carlos Alberini, who is now the sole chief executive, said that the retailer would shutter what he called duplicative stores in many markets, though it will also embark on international expansion.

Mr. Friedman described a vision of elaborate destination stores that showcase not only the retailer’s signature premium furniture but also art, clothing and furnishings that go well beyond chairs and sofas. The Boston store, as Mr. Friedman described in a pitch reminiscent of the late Steven P. Jobs, features a granite plaza, elevators patterned after the Bradbury Building in Los Angeles, a tea salon and a wine bar.

“It’s an expression of home furnishings that people have yet to see,” he said.

dealbook.nytimes.com

[Glenn Petersen] Restoration Hardware Sets Price Range for I.P.O. By DEALBOOK DealBook New Yor...

Glenn Petersen — 10/23/2012 9:34:20 AM

Restoration Hardware Sets Price Range for I.P.O.

By DEALBOOK
DealBook
New York Times
October 23, 2012, 8:10 am

Restoration Hardware said in a filing on Tuesday that it planned to sell 5.2 million shares at $22 to $24 a share in an initial public offering.

At the midpoint of that price range, the company would have a market value of more than $850 million. Restoration Hardware is being classified as an “emerging growth company” under the Jumpstart Our Business Start-Ups Act, or the JOBS Act, which was enacted this year to ease the regulatory burden for companies that want to go public.

An I.P.O. has been long awaited for the specialty home furnishings retailer, which was taken private in 2008 by the private equity firms Catterton Partners and Tower Three Partners and its top executive at the time, Gary Friedman, for about $175 million.

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The amended S-1

Mr. Friedman recently stepped down as co-chief executive and chairman after an internal inquiry into a personal relationship with a 26-year-old female employee. Mr. Friedman, who still owns 17.6 percent of the company, is an adviser to the company and board, with the title of creator and curator, as well as chairman emeritus of the board.

The amended S-1 filing gives details on a five-year advisory services agreement between the company and Mr. Friedman, whose termination date was Oct. 20. The agreement calls for an annual fee of $1.1 million. Mr. Friedman can also earn a minimum annual bonus of $500,000 if certain performance goals are met.

Bank of America- Merrill Lynch and Goldman Sachs are leading the underwriting of the offering. Restoration Hardware’s shares are set to trade on the New York Stock Exchange under the ticker symbol RH.

dealbook.nytimes.com

[Glenn Petersen] Restoration Hardware filed a registration statement this afternoon: sec.gov Th...

Glenn Petersen — 9/9/2011 6:01:39 PM

Restoration Hardware filed a registration statement this afternoon:

sec.gov

The company has still not figured out how to operate profitability on a consistent basis.