SecProbe.io

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Mail Stop 3561

									July 18, 2005

Mr. Gary G. Friedman
President, Chief Executive Officer
and Chairman of the Board
Restoration Hardware, Inc.
15 Koch Road, Suite J
Corte Madera, CA 94925

      RE:	Restoration Hardware, Inc.
      Form 10-K for Fiscal Year Ended January 29, 2005
      Filed April 14, 2005
      Form 10-Q for Fiscal Quarter Ended April 30, 2005
      File No. 0-24261

Dear Mr. Friedman:

      We have reviewed your filings and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and will make no further review of your
documents.  Where indicated, we think you should revise your
document
in response to these comments.  If you disagree, we will consider
your explanation as to why our comment is inapplicable or a
revision
is unnecessary.  Please be as detailed as necessary in your
explanation.  In some of our comments, we may ask you to provide
us
with supplemental information so we may better understand your
disclosure.  After reviewing this information, we may raise
additional comments.

      Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or any other aspect
of
our review.  Feel free to call us at the telephone numbers listed
at
the end of this letter.

General
1. Where a comment below requests additional disclosures or other
revisions to be made, these revisions should be included in your
future filings, as applicable.

Form 10-K for Fiscal Year Ended January 29, 2005

Selected Financial Data, page 17

2. Please mark the applicable columns of the Selected Financial
Data
table "as restated."

Management`s Discussion and Analysis of Financial Condition and
Results of Operation, page 18

3. Where you identify intermediate causes of changes in your
operating results, also describe the reasons underlying the
intermediate causes.  For example, you indicate that the favorable
change in cost of revenue and occupancy expense as a percentage of
revenue from fiscal year 2003 to 2004 was partially due to
improved
product margins.  Please provide a discussion of the relevant
factors
and trends that led to the improved product margins.  See SEC
Release
No. 33-8350.

4. Where you describe two or more business reasons that
contributed
to a material change in a financial statement line item between
periods, please quantify, where possible, the extent to which each
change contributed to the overall change in that line item.  For
example, with respect to the overall change in selling, general
and
administrative expenses from fiscal year 2003 to 2004 and fiscal
year
2002 to 2003, please quantify the extent to which the changes are
attributable to the various contributing factors, such as
advertising, payroll, and professional fees expenses.  See Item
303(a) of Regulation S-K and SEC Release No. 33-8350.

Liquidity and Capital Resources, page 25

5. Please revise your tabular disclosure of contractual
commitments
to include estimated interest payments on your line of credit.  A
footnote to the table should provide appropriate disclosure
regarding
how you computed the payments.  Since the table is aimed at
increasing transparency of cash flow, we believe these payments
should be included in the table.  If you choose not to include
these
payments, a footnote to the table should clearly identify the
excluded items and provide any additional information that is
material to an understanding of your cash requirements.  If
material,
also include a note to the table to specify that the lease
obligation
figures do not include insurance, real estate taxes, and repair
and
maintenance expenses to which the company is obligated.  Provide a
context for the reader to understand the impact of these charges
on
your total lease obligations.  See Item 303(a)(5) of Regulation S-
K.

Critical Accounting Policies, page 28

6. Please revise the discussion of your critical accounting
policies
to focus on the assumptions and uncertainties that underlie your
critical accounting estimates, rather than duplicating the
accounting
policy disclosures in the financial statement footnotes.  Discuss
the
sensitivity of reported results to changes in your assumptions,
judgments, and estimates, including the likelihood of obtaining
materially different results if different assumptions were
applied.
For example, please revise your MD&A in future filings to discuss
in
more detail the basis for the changes in your valuation allowance
and
highlight the judgments and assumptions involved in evaluating the
sufficiency of the remaining valuation allowance.

Financial Statements

(1) Summary of Business and Significant Accounting Policies, page
37

7. Please disclose the types of expenses that you include in the
cost
of revenue and occupancy line item and the types of expenses that
you
include in the selling, general and administrative expense line
item.
In doing so, please disclose specifically whether you include
inbound
freight charges, purchasing and receiving costs, inspection costs,
warehousing costs, internal transfer costs, and the other costs of
your distribution network in cost of revenue and occupancy.  If
you
currently exclude a significant portion of these costs from cost
of
revenue and occupancy, please provide cautionary disclosure in
MD&A
that your gross margins may not be comparable to others, since
some
entities include the costs related to their distribution network
in
cost of revenue and others like you exclude all or a portion of
them
from gross margin, including them instead in a line item such as
selling, general and administrative expenses.  To the extent it
would
be material to an investor`s ability to compare your operating
results to others in your industry, you should quantify in MD&A
the
amount of these costs excluded from cost of revenue and occupancy.

8. Please tell us the nature and terms of any incentives you offer
to
customers, including discounts, coupons, rebates, or free
products.
Please also disclose your accounting policy for these types of
arrangements, including the statement of operations line item in
which each type of arrangement is included.  For each expense line
item that includes these types of arrangements, please disclose
the
related amounts included in that line item.  For each type of
arrangement treated as an expense rather than as a reduction of
revenues, please tell us how this type of arrangement meets the
requirements in EITF 01-09.

(6) Income Taxes, page 47

9. We note that you recorded a $3.0 million reduction of your
valuation allowance during fiscal year 2004, reducing it to zero.
Considering the existence of negative evidence under SFAS 109,
such
as your cumulative operating losses in the past five years, it
appears that eliminating your valuation allowance may not be
appropriate at January 29, 2005.  Citing the factors in SFAS 109,
please explain in detail how you determined that a reduction of
the
full valuation allowance to zero is appropriate.  Specifically
discuss the negative and positive evidence you considered in your
evaluation.  As noted in paragraph 103 of SFAS 109, a cumulative
loss
in recent years is difficult to overcome, requiring positive
evidence
of sufficient quality and quantity to support a conclusion that,
based on the weight of all available evidence, a valuation
allowance
is not needed.  A projection of future taxable income is
inherently
subjective and will generally not be sufficient to overcome
negative
evidence that includes cumulative losses in recent years.

(7) Redeemable Convertible Preferred Stock, page 49

10. We note that you include your redeemable preferred stock in
mezzanine equity.  Please clarify your disclosure of the preferred
stock`s redemption features by specifically indicating whether it
is
redeemable at your option, the holder`s option, or both.

Report of Independent Registered Public Accounting Firm, page 58

11. We note that your auditors have excluded their signature from
this report and their report on internal control over financial
reporting.  Please amend your filing to include both of these
reports
signed by your auditors.

Schedule II - Valuation and Qualifying Accounts, page 66

12. Based on the nature of your business, we would expect your
Valuation and Qualifying Accounts schedule to include the activity
in
your allowance for sales returns, if material.  Please either
revise
to include this account in your schedule or otherwise tell us why
disclosure of the activity in this account is not required.  See
Rules 5-04 and 12-09 of Regulation S-X.

      As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response.  Please furnish a cover letter that keys your
responses to our comments and provides any requested supplemental
information.  Detailed cover letters greatly facilitate our
review.
Please understand that we may have additional comments after
reviewing your amendment and responses to our comments.

      We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filings include all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed decision.  Since the company and
its management are in possession of all facts relating to a
company`s
disclosure, they are responsible for the accuracy and adequacy of
the
disclosures they have made.

      In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:

* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;

* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and

* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.

      In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.

      If you have any questions regarding these comments, please
direct them to Staff Accountant Andrew Blume at (202) 551-3254.
Any
other questions regarding disclosure issues may be directed to me
at
(202) 551-3716.

								Sincerely,

									Will Choi
									Branch Chief

Mr. Gary G. Friedman
President, Chief Executive Officer
and Chairman of the Board
Restoration Hardware, Inc.
July 18, 2005
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