Restoration Hardware Passes on Sears Offer

Restoration Hardware Inc. has determined that the most recent Sears Holdings proposal to acquire is not better than one already on the table from Catterton Partners.

A “go-shop” period during which Restoration Hardware was permitted to encourage alternative proposals to the $179 million bid it accepted from Catterton in January ended on February 28. During that period, Restoration Hardware said it made numerous efforts to engage with Sears, which had previously made its own offer for the multichannel specialty retailer, but did not receive a proposal until the final day.

After considering the terms of Sears' proposal, an independent committee determined it “was not likely to result in a superior proposal,” to the one offered by private equity firm Catterton, “because, among other considerations, the proposal was subject to significant uncertainties” compared to the other deal.


In other Sears news, Eddie Lampert outlined some plans for boosting Sears' fortunes.

"Our profit margins continue to lag our competitors," Lampert wrote. "We intend to manage the company's expenses and our inventory position more tightly in 2008."

In the shareholders' letter, Lampert raised the possibility that Sears could sell some of its brand-name products, which include Craftsman tools and Kenmore appliances, through other retailers.

Lampert said Manning's comeback story "reminds me of what we went through a few years ago with Kmart." Kmart had been "given up for dead," Lampert said, but it returned to profitability in 2004.

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