PRINT THIS STORY:

CHANGE TEXT SIZE:

Restoration puts fun back in hardware retail

By DEBRA HAZEL

Ever want one of those gizmos waiters use to scoop up crumbs? Or an angled dentist's mirror? Or a $1,100 sofa? Many shoppers are flocking to Restoration Hardware for its eclectic mix of hard goods -- and landlords are aching to get it into their centers.

Combining the whimsical with the practical, the Corte Madera, Calif.-based chain has grown from founder Stephen Gordon's house to a 43-unit chain today. And expansion will be rapid.

The store arose from Mr. Gordon's frustrations in remodeling his Eureka, Calif., home. Mr. Gordon, a counselor with a master's degree in psychology, couldn't find the period fittings he needed to restore his Victorian house into a bed-and-breakfast. He began searching directly for vendors, eventually buying large quantities of doorknobs, drawer pulls, and other hard-to-find items that he began reselling to people just like himself.

The home-based business grew into the chain's first store in 1980. A second store was opened in 1984. By 1993, the chain had seven stores. A cash infusion from private investors led to an expansion boom, with the chain essentially doubling each year since. Restoration Hardware now has 43 stores in 18 states.

"I absolutely love these guys. They are so good in presentation, so good in training their people, in their in-stock condition, the way they set up a store," raved Roger Burghdorf, senior executive vice president of Santa Monica, Calif.-based Westfield America. Restoration has a unit at the firm's Garden State Plaza in Paramus, N.J., and is the most-requested tenant by shoppers at Westfield's other centers, he said.

The 10,000-square-foot to 12,000-square-foot stores are a unique blend of the truly useful and the sometimes silly, in an environment that looks more like a well-appointed home than a store. In essence, the stores are a blend of both a home furnishings emporium and a hardware store.

Classic, high-quality furniture and lamps create a home atmosphere punctuated by practical tools (a hammer with a compartment for screws in the handle, a metal watering can), and the nostalgic (Slinky and U-Bet syrup, the chocolate-like syrup used in milk shakes). Books on architecture and design also join the mix. The reason behind the merchandising decisions: Mr. Gordon liked the stuff. Few chains so clearly reflect the personality of its owner.

Other items reflect customer demand. Furniture was added to the mix when shoppers asked to buy the pieces originally intended as a backdrop to help display smaller product.

The furniture, however, is less quirky than most of the smaller items sold.

"So much of what we are doing in home fashion retail is doing the classics. A furniture purchase is a fairly large one, so we stayed with the tried-and-true. We then surround it with whimsical product," he said.

Thus far, Gordon's tastes and his shoppers' are the same. Because the chain is still privately held, Mr. Gordon declined to confirm total 1997 sales figures, which one published report said were about $100 million, more than double 1996's $39 million. Sales totaled about $400 per square foot, the chain does say.

The mix also draws that rarest of rarities, the male mall shopper. About 35% of Restoration Hardware shoppers are men, Mr. Gordon said.

"For years, we always merchandised our centers to women with the apparel tenants. So this does appeal to men. But it also appeals to women," Mr. Burghdorf noted.

The typical Restoration Hardware customer, Mr. Gordon said, "is 35 or 45 years old, with about $80,000 to $100,000 in income. They are college-educated, well-traveled and well-read. Psychographically, we've done no studies. But our customers are people who don't take themselves seriously, but take their family lives seriously." In other words, much like Mr. Gordon himself.

Not all of this was planned, Mr. Gordon admitted.

"I have found, in general, that the hardest part of the concept is articulating goals. We executed the store, then tried to figure out what we had done. The appeal to men is a natural spinoff of starting as a hardware store," Mr. Gordon said.

Growth will continue. The firm plans to open 25 stores each in 1998 and 1999, through a combination of regional mall and streetfront locations.

While noting that newer regional centers such as TrizecHahn Corp.'s Park Meadows outside Denver provide creative opportunities, "Given my druthers, I really would rather be on the street," he said.

Street locations, Mr. Gordon added, offer a "greater degree of identity. It's a lot more natural, and the co-tenants stay open until 11:30 p.m. But it's not a case of street vs. shopping centers. It's the right site."

Mr. Gordon is not looking to expand into Europe or Asia in the next two years, he added.

Some observers have expressed concern with the firm's rapid expansion. Mr. Gordon admitted that if he were on the outside looking in, he might be a little worried, as well.

"But we have doubled our size and doubled our revenues. We opened 21 stores last year from the Northeast to Tampa, Fla., to Texas to Seattle, and we did it flawlessly," he noted. Stores opened on time and have performed well.

Another concern could be the chain's seeming total reliance on Mr. Gordon and his eclectic tastes.

Those tastes haven't always been on the money. Mr. Gordon ruefully recalled one product that just didn't make it.

"It was called Veggie Forms, acrylic molds that covered vegetables and they would grow into that shape. And I wasn't smoking anything at the time," he laughed. The forms were a nice donation to charity, he added.

He remains intimately involved in nearly every aspect of his company's operation -- despite the additional responsibilities of a larger chain, Mr. Gordon continues to write the descriptive copy that appears beneath each item. In J. Peterman catalog style, the copy often refers to Mr. Gordon's childhood, describing why he found the item appealing.

"I do this in blocks of time. I am the CEO, so I'm doing real estate, finance, etc. Writing copy is the great creative release," Mr. Gordon said.

He is beginning to delegate more, in recognition of the fact that part of his new responsibilities is to create a corporate culture that can exist without him. Once the sole buyer for the chain, he now oversees several buyers, though he retains final sign-off on each item. He defends that tight control.

"It is my point of view. It may seem fascist, but the great merchants are those that make a statement. I don't bring all the product in, but I do approve it. It is a rather consistent point of view," he said.

And he prides himself on finding people who can carry through his vision.

"If I went sailing for a year, I don't think the company would be as good," he admitted, adding he wasn't planning to do that in the foreseeable future. "But there are people here who really 'get it.'"

In recent months, Mr. Gordon has bolstered his management team, recruiting former Barnes & Noble president Tom Christopher as COO and former Home Express corporate controller Tom Low as CFO.

Mr. Gordon never did open up the bed-and-breakfast. He and his family lived in the restored house for eight years, before selling it. But the chain that house spawned, Restoration Hardware, remains his baby.

"People find a certain joy in retailers who love to express themselves, and certainly other retailers do this. It's very possible to have this exciting, sexy retail environment where the product seems to be a formula driven by systems without a lot of risk-taking. We're certainly interested in systems, but it is clearly merchant-driven," Mr. Gordon said.