RESTORATION HARDWARE HOLDINGS INC (RH) IPO

We estimate that the net proceeds to us from this offering, after deducting 
the underwriting discount and estimated offering expenses, will be 
approximately $97.1 million, based on the initial public offering price of 
$24.00 per share. We will not receive any proceeds from the sale of shares 
by the selling stockholders. 

We intend to use approximately $90.1 million of the net proceeds from the 
sale of common stock by us in this offering to repay a portion of the 
outstanding amounts under the Restoration Hardware, Inc. revolving line of 
credit and term loan and $7.0 million of the net proceeds to pay management 
fees to affiliates of Catterton, Tower Three and Glenhill pursuant to the 
terms of the management services agreement that will terminate upon 
consummation of this offering. In addition, we intend to use $8.4 million 
of available cash to further reduce amounts outstanding under Restoration 
Hardware, Inc.’s revolving line of credit and term loan. 

The total outstanding amounts under the Restoration Hardware, Inc. 
revolving line of credit was $129.6 million as of July 28, 2012. The maturity 
date of the revolving line of credit is August 3, 2016. Borrowings under 
the revolving line of credit bear interest at a rate equal to either the 
bank’s reference rate or the London Interbank Offered Rate as published by 
Reuters, referred to as “LIBOR,” plus an applicable margin rate. 

The total outstanding amounts under the Restoration Hardware, Inc. term loan 
was $14.8 million, net of $0.2 million of unamortized debt issuance costs, 
as of July 28, 2012. The term loan bears interest at a rate of LIBOR plus 
5.0%. Restoration Hardware, Inc. is required to make quarterly payments of 
$1.25 million beginning October 2012 with the final payment in April 2015. 

Pending use of the net proceeds from this offering described above, we intend to 
invest the net proceeds in short- and intermediate-term interest-bearing 
obligations, investment-grade instruments, certificates of deposit or direct or 
guaranteed obligations of the United States government. 

Bank of America, N.A. is a lender under the Restoration Hardware, Inc. 
revolving line of credit and term loan and an affiliate of Merrill Lynch, 
Pierce, Fenner & Smith Incorporated, an underwriter in this offering, and 
will receive more than five percent of the net proceeds of this offering. 
Thus, Merrill Lynch, Pierce, Fenner & Smith Incorporated will be deemed to 
have a “conflict of interest” under the applicable provisions of Rule 5121 
of the Conduct Rules of FINRA. Accordingly, this offering will be made in 
compliance with the applicable provisions of Rules 5110 and 5121 of the 
Conduct Rules regarding the underwriting of securities of a company with a 
member that has a conflict of interest within the meaning of those rules. 
Goldman, Sachs & Co. has agreed to serve as a “qualified independent 
underwriter” as defined by FINRA and performed due diligence investigations 
and reviewed and participated in the preparation of the registration 
statement of which this prospectus forms a part. No underwriter with a 
conflict of interest will execute sales in discretionary accounts without 
the prior written specific approval of the customers.

The home furnishings industry is highly competitive. We primarily compete 
against a large number of independent retailers that provide unique items 
and custom-designed product offerings at high price points, including antique 
dealers and home furnishings retailers who market to the interior design 
community. We also compete with national and regional home furnishings
retailers and department stores. We also compete with mail order catalogs 
focused on home furnishings. 

We believe we compete primarily on the basis of design, quality, value 
and customer service. We believe our distinct combination of design, quality
and value allows us to compete effectively and we believe we differentiate 
ourselves from competitors based on the strength of our brand, products and 
our fully integrated multi-channel business model. We compete with the 
interior design trade and specialty merchants by providing a broader product 
assortment at an exceptional value based both upon the price and quality of 
our products. We compete against certain other home furnishings retailers 
primarily by offering what we believe is superior quality, highly distinctive 
design styles and a sophisticated lifestyle presentation in our product 
offering. 

We also believe that our success depends in substantial part on our ability
to originate and define product trends, as well as to timely anticipate, 
gauge and react to changing consumer demands. Certain of our competitors 
are larger and have greater financial, marketing and other resources than 
us. However, many smaller specialty retailers may lack the financial 
resources, infrastructure, scale and national brand identity necessary 
to compete effectively with us.