February 26, 2016

Restoration Hardware: No Surprise RH Stock has Tanked

No surprise to this financial planner (and avid shopper).  The Restoration Hardware chain of stores (symbol RH, based in nearby Corte Madera, California) lost 26% of its value yesterday after the company released its worse quarterly earnings report since going public in 2012.  RH stock, well, tanked and then some, closing yesterday at $38.49.  As noted below, RH is trading today in the $39 range.

Restoration Hardware (RH) closed down 26% yesterday after disastrous quarterly results.
This morning RH is currently trading up about 3% as shown in the stock price graph above.

No surprise to me.  I posted commentary last November about my experience with Restoration Hardware's 2015 Holiday Catalog, which earned my vote for the Retailer Flub of the Year.  Amazingly, the catalog sold a stocking stuffer for the grill enthusiast:  A hand-held meat tenderizer modeled after brass knuckles!

Restoration Hardware's 2015 Holiday Right-Hook Brass Knuckles-like Meat Tenderizer
No wonder the product quickly became "not available".

Foolish and reckless.  Perhaps just plain stupid.  Didn't Restoration Hardware know that brass knuckles and brass knuckle-like items are illegal in many states, including California?  In California, even the possession of brass knuckles can result in felony prosecution.  Did the company actually want to make their customers into a bunch of felonious grill enthusiasts?

And Restoration Hardware never publicly offered an explanation or apology for this major flub.

Years ago when the chain was privately held, Restoration Hardware stores were quirky and cool, an absolutely delight to shop in with merchandise found nowhere else including replicas of old fashioned items, quality furniture, and unique gadgets and tools.  But all that change after the company went public in 2012 and morphed into a Pottery Barn wannabe lookalike.  I've not shopped at my local Walnut Creek store since.

I stated on my November post that I thought Restoration Hardware had some 'splaining to do.  Now I really think the company has some serious 'splaining to do!

For information about my Insurance Consulting, Expert Witness, and Tax Services visit Fouts Financial Group.

Mary Rae Fouts

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