* IPO $100 mln-$300 mln planned for 1st half 2011-source
* Post-IPO market cap of about $1 billion expected -source
* Bank of America, Goldman to lead underwriters -source
* Shares expected to trade on NYSE -source
(Adds details on U.S. IPO pipeline, performance of private equity-backed IPOs, Restoration Hardware's private equity backers and financials)
By Clare Baldwin and Dhanya Skariachan
NEW YORK, Sept 21 (Reuters) - Restoration Hardware plans to raise as much as $300 million in an initial public offering that would allow its private equity backers to cash in on part of their investment in the U.S. furniture retailer, a source familiar with the situation told Reuters.
Bank of America Merrill Lynch and Goldman Sachs would lead the IPO, which is planned for the first half of next year, the source said.
It is expected to raise between $100 million and $300 million and give Restoration Hardware a market capitalization of around $1 billion, the source said.
Restoration Hardware sells furniture, bath linens, lighting fixtures and other items for homes at its retail stores, online and through catalogs. The IPO plan comes as home goods recover after the recession.
The shares are expected to trade on the New York Stock Exchange, the source said.
Four hundred fifty-eight companies have filed to go public in the U.S. since 2009, according to Thomson Reuters data. Private equity-owned companies are among the biggest.
Hospital operator HCA Inc hopes to raise up to $4.6 billion and Toys R Us Inc hopes to raise about $800 million. Nielsen Holdings BV, best known for viewership ratings which often determine the fate of TV shows, hopes to raise $2.01 billion.
This year, private equity-backed IPOs debuting in the United States have posted average losses of 0.7 percent compared with all IPOs, which have posted average gains of 4.42 percent, according to the data.
Restoration Hardware's plans for an IPO are still preliminary and could change. The source declined to be named because preparations for the IPO remain private. Spokespeople for Bank of America Merrill Lynch and Goldman Sachs declined to comment. A spokeswoman for Restoration Hardware also declined comment.
Sales at home goods retailers crumbled during the U.S. recession and housing downturn as consumers tried to save money by buying fewer things. They are beginning to buy more things after a long hiatus.
But the economy is recovering in fits and starts and consumer demand is uncertain. Some industry watchers also worry that the expiration of a U.S. tax credit for home buyers could slow recent sales growth.
Private equity firms Catterton Partners and Tower Three Partners LLC, along with Restoration Hardware Chief Executive Officer Gary Friedman, bought a controlling equity stake in Restoration Hardware in a merger agreement approved by shareholders in June 2008.
Restoration Hardware had 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. Sears Holdings Corp (SHLD.O) had also bid for the company.
At the time of closing, private equity firm Tower Three Partners LLC 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.
Before it was taken private, Restoration Hardware was publicly traded on the Nasdaq under the ticker symbol "RSTO."
In its last fiscal year before going private, which ended on Feb. 2, 2008, Restoration lost $51.9 million on net revenue of $722.2 million. The company had lost money in seven of its nine latest fiscal years at the time.
Restoration Hardware, with its latest collection including hand-crafted oak tables and linen-upholstered chairs in neutral hues, looks to be targeting a higher-end customer.
At the same time, much of chain retailers' sales strength has come from cutting prices and offering more products.
Pier 1 has been selling more cheaper, decorative items like end-tables and side-tables rather than bulky couches and armoires. The store is also offering more kinds of products.
Williams-Sonoma Inc (WSM.N), which operates Pottery Barn and West Elm, slashed prices on some items despite worries that the move might tarnish its image as a high-end retailer.
Even furniture retailer Ethan Allen Interiors Inc (ETH.N), which stuck with full prices throughout most of the downturn, offered more promotions to avoid losing more market share.
Most of these retailers changed their sales strategies after Linens 'N Things [LNNHDL.UL], once the No. 2 U.S. home goods chain, and smaller players like Gottschalks GOTTQ.PK became casualties of the downturn.
(Reporting by Clare Baldwin, Dhanya Skariachan and Jonathan Stempel. Editing by Gerald E. McCormick and Robert MacMillan)
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