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Restoration Hardware’s IPO Jumps 29%

After going private and going through a painful restructuring


Furniture retailer Restoration Hardware (NYSE:RH) priced its IPO at $24, which was at the top of its range of $22 to $24. And so far in today’s trading, the shares are up 29% to $31.19.  The lead underwriters on the deal included BofA Merrill Lynch (NYSE:BAC) and Goldman Sachs (NYSE:GS).

Back in 2008, Restoration Hardware went private and began a tough restructuring, with a focus on the luxury market. The company shut down many of its mall locations and instead created Design Galleries (the typical location has 21,500 square feet).

The company also aggressively invested in digital assets. Consider that Restoration Hardware’s website gets about 14 million unique visitors.

From fiscal 2009 to fiscal 2011, net revenues have climbed by 53% to $958.1 million, and adjusted EBITDA has soared by 356% to $80.2 million. A key factor has been the recovery in the U.S. real estate market, which is showing continued strength. The rising trend in housing has also been a nice boost to other recent deals like Realogy Holdings (NYSE:RLGY) and Trulia (NYSE:TRLA).

Tom Taulli runs the InvestorPlace blog IPOPlaybook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook.” Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media,

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