Restoration Hardware eyes late summer IPO-sources
* Company filed to raise $150 mln
* IPO may embolden Neiman Marcus to follow suit
* Restoration Hardware was taken private in 2008
* BofA, Goldman underwriting planned IPO
By Olivia Oran and Dhanya Skariachan
July 13 (Reuters) - Restoration Hardware Holdings Inc is eyeing a market debut in late summer or early fall, roughly a year after filing for a $150 million initial public offering, according to two sources with knowledge of the situation.
An offering from the high-end furniture maker and retailer would come as other consumer-sector IPOs perform strongly. If successful, it could help push forward an eagerly awaited offering from luxury department store Neiman Marcus Group Inc .
Founded in 1980, Restoration Hardware sells furniture, bath linens, lighting fixtures and other items for homes at its stores, online and through catalogs. Private equity firms Catterton Partners and Tower Three Partners LLC, along with Restoration Hardware Chief Executive Gary Friedman, bought a controlling equity stake in Restoration Hardware in 2008.
The initial public offering would come amid a recovery in the home goods industry after years of declining sales during the housing downturn and the recession.
IPOs from consumer companies have outperformed the broader U.S. market for initial offerings so far this year, with an average first-day return of 40.7 percent, compared with 16.6 percent across all industries, according to IPO research firm Renaissance Capital.
Shares of apparel company Michael Kors Holdings Ltd have risen 43.3 percent since the company's December IPO. Shares of organic foods company Annie's Inc have more than doubled after pricing in March.
Consumer offerings have traditionally held up well even in challenged IPO markets, thanks in part to fast-growing chains like discount retailer Five Below Inc, which next week is looking to raise up to $135 million. The retailer, which focuses on teens, said net sales rose 50 percent in 2011 to nearly $300 million.
Later this month, IPOs are also expected from organic retailer Natural Grocers by Vitamin Cottage Inc and Tex-Mex restaurant chain Chuy's Holdings Inc.
Despite general gloom in the IPO market resulting from economic uncertainty and a disappointing offering from Facebook Inc, BB&T Capital Markets analyst Anthony Chukumba said now is a good time for Restoration Hardware to go public.
"The housing market is picking up," he said. "Home furnishings retailers in general are doing pretty well. From that perspective, I guess now is as good a time as any."
Restoration Hardware's IPO is being led by Bank of America Corp and Goldman Sachs Group Inc.
Restoration Hardware and the banks declined to comment.
Sales at home goods chains crumbled during the economic downturn when U.S. shoppers cut back on the purchase of non-essential items. They have now started to invest in their homes again after a long hiatus.
Restoration Hardware agreed in November 2007 to be taken private for $6.70 per share, or about $267 million, in a transaction led by Catterton and Friedman, who remains CEO. Two months later, it reduced the price to $4.50 per share, valuing the company at roughly $175 million, after market conditions deteriorated.
At the time of closing, Tower Three made an equity investment in Restoration. This left Catterton and Tower Three with a controlling stake, the company said at the time. Tower Three has invested $115 million in Restoration, according to the firm's website.
In June, the company said in a filing that sales rose 20 percent to $991.2 million in the 12 months ended in April.
Some of Restoration Hardware's rivals include Williams-Sonoma Inc, which operates the Pottery Barn and West Elm chains, Ethan Allen Interiors Inc and Pier 1 Imports Inc.
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