Restoration Efforts

Restoration Hardware Inc. (Corte Madera, Calif.), rumored to be a takeover target of Sears Holdings Inc. (Hoffman Estates, Ill.), reported a 10.6 percent increase in net revenue for the third quarter ended Nov. 3, 2007. But loss from operations in the quarter totaled $3.7 million.

“Weakening consumer spending and traffic levels continued to affect our business in the third quarter, particularly higher ticket durable categories,” said president and ceo Gary Friedman. “Revenue did not achieve our expectations, driving substantially all of our larger than anticipated operating loss in the quarter. While we are encouraged by some of the early holiday trends in our business, we remain cautious due to the macro economic environment, which has proven highly challenging for the home furnishings sector this year.”

During the quarter, the retailer signed a merger agreement with an affiliate of Catterton Partners Corp. (Greenwich, Conn.) and an independent committee of the board of directors engaged in a “go shop” process, soliciting proposals from third parties.