NEW YORK (AP) — Shares of Restoration Hardware jumped in its first day of trading, as investors decided to take a bet on a familiar retail name and the gradual housing recovery.
Shares rose $7.10, or 29.6 percent, to close at $31.01 Friday on the New York stock exchange. The home decor retailer and its shareholders raised $124 million, selling 5.2 million shares for $24 each.
"It's been quite well received," said Sam Hamadeh, CEO of PrivCo LLC, which researches private companies. "It's reasonably priced and a well-known brand."
In addition, the housing market is slowly strengthening. The Standard & Poor's/Case Shiller index reported Tuesday that national home prices rose 2 percent in August, the third straight monthly increase. And new home sales jumped in September to the highest annual pace in the past two and a half years.
Restoration Hardware is one way investors could capitalize on the recovery, Hamadeh said.
"You get familiar brand name plus an IPO bet on the housing market," he said.
Restoration Hardware, which operates more than 70 retail stores, is going public several years into a turnaround. The company was losing money when it was bought by a private equity firm in in 2008. It has since redesigned stores, revamped its product line and focused on a higher-end market.
In the fiscal year ended Jan. 28, the company reported net income of $20.3 million, compared with a loss in the prior year of $8.1 million. Revenue rose 24 percent to $958.1 million.
Restoration Hardware sells items in a wide range of categories including furniture, lighting, textiles, bathware, décor, outdoor and garden, and baby and child products.
Restoration Hardware Holdings Inc., based in Corte Madera, Calif., is trading under the "RH" ticker symbol.