Restoration Hardware Agrees to be Sold for $267M
San Francisco, Restoration Hardware Inc. said Thursday that it has agreed to sell itself to private-equity firm Catterton Partners for $267 million, according to the San Francisco Chronicle.
Restoration CEO Gary Friedman is participating in the buyout. In addition, several institutional investors are investing in the transaction or exchanging their common stock for equity in Catterton or an affiliate.
Similar to other home-furnishings stores, Restoration Hardware has been struggling in the aftermath of the housing slump, which has caused consumers to rein in spending. Last year, the company earned $3 million on revenue of $713 million; in 2005 it lost $29 million on $582 million in revenue.
In August, Restoration said it would cut 100 jobs at its Corte Madera headquarters to save $9 million a year. Previously, it had 3,800 employees—1,700 of them part time.
Last year, the company took steps into the broader "value" market segment with its new Brocade Home brand. Brocade Home products, which it sells via catalogs and the Web, have lower prices than Restoration and a design aesthetic aimed at women.
In April, Restoration told analysts it would temporarily suspend store expansion while it focuses on increasing direct-to-consumer sales. Friedman said he expects catalogs and the Internet to account for half of the company's sales within three years, up from a third now.
Restoration said it would solicit competing bids until Dec. 13. If it accepts another offer, it must pay Catterton a $10.68 million termination fee. That deal is expected to close by April.