Restoration Hardware is back from the grave, but that doesn't mean that you have to warm up to this zombie.
The upscale, home-furnishings retailer filed to go public this morning, hoping to cash in on the recent success of chains targeting well-to-do mall shoppers including Teavana
For those not familiar with the publicly traded life of Restoration Hardware, it dismissed buyout overtures from Sears
The chain's been bouncing back in recent quarters, but it's still too soon to believe that Restoration Hardware will fare any better as a public company now than it did a few years ago. For starters, Restoration Hardware has posted four consecutive fiscal years of losses. The deficit narrowed substantially last year -- and the retailer is profitable through the first two quarters of fiscal 2011 -- but couldn't Restoration Hardware have given us a full year of positive earnings before hitting the market again?
Comparable stores rose 19% last year -- and spiked 20% through the first half of this fiscal year -- but that is largely offset by declines in comps of 10%, roughly 9%, and 7% in the three previous years.
Restoration Hardware has thrived with its direct retail over the years, but it should be pointed out that there were just 87 locations open this summer. There had been 100 stores out there when the retailer was taken private by management-led Catterton Partners.
Restoration Hardware will be hoping that investors forget about its past and focus on its most recent performance metrics. Underwriters will probably point to the success of Pier 1, having gone from $0.10 a share in March 2009 to trade in the double digits today. Shares of Williams-Sonoma
We still don't know how many shares Restoration Hardware is looking to sell, let alone at what price. We'll save a fairer valuation of the offering until underwriters shed some light there. However, this still seems like an incomplete turnaround. Until the company begins opening net new stores or proves that it can sustain its recent profitability, I'll pass on the Restoration movement.
It's too early to track Restoration Hardware through MyWatchlist, but you can add some of the other related companies mentioned in this article.