Adverse Weather Hampers Restoration Hardware

May 31, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on June 2007 Blaming bad weather and the housing slowdown, Restoration Hardware, Core Madera, Calif., said Thursday that it posted a loss of $13.8 million in its first quarter as revenues rose 7 percent to $142.1 million.

“The first quarter was particularly challenging, reflecting a combination of factors that affected our financial performance,” said Gary Friedman, chairman, president and CEO of the 111-store chain that also sells via catalogs and the Internet. “We experienced below plan sales in April, primarily in our outdoor and seasonal businesses, with the majority concentrated in the Eastern region of the country. We believe this was due to the fact that the second mailing of our Outdoor catalog dropped on April 5 during adverse weather conditions in the East. We also are experiencing ongoing softness across our business due to the challenging home furnishings environment and the effects from the slowdown in the home building industry. While we continue to operate in an uncertain macro environment, we believe the growth initiatives we have underway, combined with our cost cutting efforts, will enable us to achieve our previously stated financial guidance for the second quarter and full year 2007. We expect full year sales growth in the range of 9 percent to 11 percent and improved operating margins in the range of 1.4 percent to 1.8 percent.”

He said the company is continuing to extend the Restoration Hardware brand with first-quarter initiatives that include a new Restoration Hardware Bed & Bath catalog and Restoration Hardware Trade, a direct sales division targeting home and hospitality developers. A new brand, Brocade Home, is delivering promising results after debuting last fall.