Restoration Targets a Wealthy Niche

Article Excerpt

RESTORATION HARDWARE INC. $7.22 (Nasdaq symbol RSTO; SI Rating: Extra risk) (415-924-1005; www.restorationhardware.com; Shares outstanding: 38.7 million; Market cap: $279.6 million) is a specialty retailer of high quality home furnishings, linens, bath fixtures and bathware, plus functional and decorative hardware, gifts and related merchandise that reflect classic or period designs. The company operates 103 stores and eight outlet stores in 30 states, the District of Columbia and Canada. In addition to its retail stores, Restoration Hardware sells directly to consumers, both through catalogs and the Internet. It also manufactures furniture. Restoration Hardware uses its catalog as its primary marketing vehicle. It mails catalogs to people with demographic profiles similar to those of its retail customers and who also possess previous mail order purchase histories. Approximately 60% of the catalogs are circulated to past customers, and the remaining catalogs are mailed to new prospects. Results are improving In the fiscal third quarter ended October 28, 2006, Restoration Hardware’s revenues rose 22.3%, to $157.1 million from…

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