Restoration Hardware Completes Sale to Catterton Partners

Tower Three Partners Joins Catterton with Equity Investment

CORTE MADERA, Calif., June 17 /PRNewswire/ -- Restoration Hardware, Inc.
today announced that the acquisition of the Company by a group of investors
including Catterton Partners and Gary Friedman, the Company's Chairman,
President and Chief Executive Officer, has been completed. Under the terms of
the merger agreement, which was approved by shareholders on June 12, 2008, all
of the outstanding shares of common stock of Restoration Hardware, other than
those exchanged by certain shareholders participating with Catterton Partners
in the transaction, will receive $4.50 per share in cash.
In connection with the closing, Restoration Hardware and Catterton
Partners also announced that Tower Three Partners LLC, an operationally
focused private equity firm, has made an equity investment in the Company.
Tower Three's investment is approximately equal to the investment made by
Catterton. Together, Catterton and Tower Three will have a controlling equity
interest in the Company.
"We are pleased to announce the successful closing of this transaction and
the investment by Tower Three," said Mr. Friedman. "With Tower Three's
investment, we will gain access to a team of professionals with a proven track
record of building operational excellence. Combined with Catterton's
expertise in developing and growing leading consumer brands, I believe this
partnership will greatly benefit Restoration Hardware's stakeholders,
customers, and team members."
"With a leading brand, management team and multi-channel operating
platform, Restoration Hardware has a solid foundation in place," said Bill
Forrest, Founding Partner of Tower Three. "We look forward to working with
Catterton Partners and Gary's leadership team to capitalize on these strengths
and drive sustainable growth and profitability."
"We have great respect for the principals of Tower Three, having worked
and invested along side them for over a decade," said J. Michael Chu, Managing
Partner of Catterton Partners. "We are delighted to partner with Tower
Three's principals and the Restoration Hardware team to grow and further
develop one of the leading brands in home furnishings."
As a result of the acquisition closing, Restoration Hardware's common
stock will cease trading on NASDAQ prior to the opening of the market on June
18, 2008, and will no longer be listed on NASDAQ.
Shareholders who hold shares through a bank or broker will not have to
take any action to have their shares converted into cash, since these
conversions will be handled by the bank or broker. Shareholders who hold
certificates can exchange their certificates for $4.50 per share in cash,
without interest, through Restoration Hardware's paying agent, Computershare.
Computershare will be mailing out instructions to registered shareholders in
the next few days regarding specific actions they will need to take to
exchange their shares for the cash consideration.
In addition, under the terms of the previously announced preliminary
settlement of shareholder litigation, holders of common stock as of the date
of the closing of the merger will also be entitled to receive a payment from a
shareholder common fund in the amount of approximately $0.10 to $0.13 per
share. Certain shareholders including those participating with Catterton
Partners in the transaction and those who are also directors of Restoration
Hardware will not be entitled to receive payment from the shareholder common
fund. The exact payout per share of common stock will depend upon various
factors including the amount of attorneys' fees and expenses deducted from the
common fund.
About Restoration Hardware
Restoration Hardware, Inc. is a specialty retailer of high quality home
furnishings, bath fixtures and bathware, functional and decorative hardware,
gifts and related merchandise that reflects the Company's classic and
authentic American point of view. Restoration Hardware sells its merchandise
offering through its retail stores, catalog (800-762-1005) and on-line at
http://www.restorationhardware.com and http://www.rhbabyandchild.com. The
Company currently operates 100 retail stores and 10 outlet stores in 30
states, the District of Columbia and Canada.
About Tower Three Partners
Tower Three Partners LLC is an operationally focused private equity firm
formed to make a concentrated number of control investments in businesses in
transition. Tower Three targets middle market companies across all business
sectors that are currently experiencing operational or sector challenges.
Tower Three looks for situations where it can leverage the expertise of its
senior professionals in implementing operational and financial improvements.
The firm's average investment size ranges from approximately $75 million to
$150 million.
About Catterton Partners
With more than $2.3 billion under management, Catterton Partners is a
leading private equity firm in the U.S. focused exclusively on the consumer
industry. Since its founding in 1990, Catterton has leveraged its investment
capital, strategic and operating skills, and network of industry contacts to
establish one of the strongest investment track records in the consumer
industry. Catterton invests in all major consumer segments, including Food
and Beverage, Retail and Restaurants, Consumer Products and Services, and
Media and Marketing Services. Catterton has led investments in companies such
as Breyers Yogurt, Wellness Pet Food, The Worth Collection, Build-A-Bear
Workshop, Cheddar's Restaurants, P.F. Chang's China Bistro, Baja Fresh Mexican
Grill, Frederic Fekkai, Kettle Foods, Farley's and Sathers Candy, Odwalla and
Heartland Recreational Vehicles. More information about the firm can be found
at http://www.cpequity.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act
of 1995
This release contains forward-looking statements that involve known and
unknown risks. Such forward-looking statements include, without limitation,
statements regarding the benefits of the completed transaction and future
performance of Restoration Hardware and statements containing words such as
"likely" or "expects" and words of similar import or statements of
management's opinion. There are a number of risks and uncertainties that could
cause actual results to differ materially from these forward-looking
statements, including that Restoration Hardware may be adversely affected by
unexpected costs of the transaction or by other economic, business and/or
competitive factors. Additional factors that may affect the future results of
Restoration Hardware are set forth in its filings with the Securities and
Exchange Commission, including its recent filings on Forms 10-K, 10-Q and 8-K,
including, but not limited to, those described in Restoration Hardware's Form
10-Q for the fiscal quarter ended May 3, 2008, in Part I, Item 2 thereof
("Management's Discussion and Analysis of Financial Condition and Results of
Operations"), in Part I, Item 4 thereof ("Controls and Procedures"), and in
Part II, Item 1A thereof ("Risk Factors"). Unless required by law, Restoration
Hardware undertakes no obligation to publicly update or revise any forward-
looking statements, whether as a result of new information, future events or
otherwise.
Contacts

Restoration Hardware Catterton Partners Tower Three
Chris Newman Eric Brielmann, Andrea Salas Partners
Chief Financial Officer and Joele Frank, Bill Forrest
415-945-4530 Wilkinson Brimmer Katcher Partner
212-355-4449 203-485-5800

SOURCE Restoration Hardware, Inc.

Chris Newman, Chief Financial Officer of Restoration Hardware, Inc.,
+1-415-945-4530; or Eric Brielmann, or Andrea Salas, or Joele Frank, all of
Wilkinson Brimmer Katcher, +1-212-355-4449, for Catterton Partners; or Bill
Forrest, Partner of Tower Three Partners, +1-203-485-5800