February 28, 2007, 12:00 AM

Restoration Hardware hammers away at growing web sales

Restoration Hardware Inc. is on track to join the $100 million online sales club. Through the first nine months of 2006, Restoration Hardware reported e-commerce sales of $77.6 million, an increase of 50% from the prior year.

Mark Brohan

Research Director

Restoration Hardware Inc. is on track to join the $100 million online sales club. Through the first nine months of 2006, Restoration Hardware reported e-commerce sales of $77.6 million, an increase of 50% from web sales of $51.8 million for the same period in 2005.

With a growth rate of 50%, Restoration Hardware is on track to generate web sales of more than $115 million in 2006 vs. web sales of $76.2 million in 2005. In the third quarter, web sales rose by 50% to $24.2 million from $16.9 million in Q3 2005.

Overall for the period of January through September of 2006, the web accounted for 17% of total sales of $468.8 million, compared with the same period in 2005 when web sales comprised 14% of total revenue of $390.6 million. "We are pleased to report another quarter of solid progress,” says Restoration Hardware president and CEO Gary Friedman. "Total revenues increased 22%, reflecting our ability to gain market share and improve profitability, despite a difficult home furnishings environment."

Restoration Hardware, No. 273 in the Internet Retailer Top 500 Guide, also is launching new direct marketing initiatives. In August, Restoration Hardware launched Brocade Home, a fashion home brand aimed at the budget-minded home furnishings shopper, the company says. Brocade Home was developed by Lisa Versacio, who joined Restoration Hardware from Williams-Sonoma Inc. where she was responsible for developing and launching the West Elm brand. Eventually Brocade Home will have an e-commerce base.

"We are excited about the introduction of Brocade Home, a fashion home brand targeted at the broader value market with a unique and feminine point of view,” says Friedman. “The brand launches with a catalog this fall, and our plan is to develop a multi-channel retailing platform over the next several years."

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