Report: Restoration Hardware co-CEO resigns
The chairman and co-CEO of high-end home decor company Restoration Hardware has resigned from his posts following an internal investigation into his relationship with a female employee, according to a published report on Friday.
The New York Times says that Restoration Hardware's board created a special committee and hired law firm Weil, Gotshal & Manges to conduct the investigation of Gary Friedman. Citing anonymous sources, the report said that the inquiry found that Friedman had an inappropriate relationship with a 26-year-old worker who is no longer with the company.
The 54-year-old Friedman was reportedly told of the investigation's findings this month and resigned from his roles earlier this week.
The newspaper says that the former employee's ex-boyfriend told Restoration Hardware's board of the relationship. Friedman, who is divorced, is believed to still be in a relationship with the woman.
A representative for Restoration Hardware Holdings Inc. could not be immediately reached for comment. The company's website gave no clear indication of any changes, with photos and comments from Friedman still prominently displayed Friday.
The report comes as Restoration Hardware eyes going public again. The company filed an initial public offering in September, saying at that time that it planned to raise as much as $150 million. Managers led a private-equity buyout of the company in June 2008 as the business struggled with losses.
In its September filing with the Securities & Exchange Commission, Restoration Hardware credited its leadership team, led by Friedman and co-CEO Carlos Alberini, as a key driver of its success.
Friedman has served as its CEO since 2001 and was named chairman and co-CEO in June 2010. He's been a board member since March 2001.
Restoration Hardware says Friedman helped to reposition the company "from a nostalgic, discovery-items business to a leading home furnishings brand." The company continued in the regulatory filing that the success of its business depends on the continued service of key personnel, including Friedman and Alberini.
"The loss of the services of our key personnel could make it more difficult to successfully operate our business and achieve our business goals," the company said.
Before making his mark at Restoration Hardware, Friedman held various positions at Williams-Sonoma Inc. This included serving as its president and chief operating officer. He also spent 11 years at Gap Inc. in different management roles.
Restoration Hardware is not the only company to be troubled by relationships between executives and employees. Best Buy Co. fired CEO Brian Dunn in April amid allegations that he had an inappropriate relationship with a female employee. And in 2010 Mark Hurd was forced to resign as CEO of Hewlett-Packard Co. At the time a former marketing contractor accused him of sexual harassment, but HP's board said it didn't find evidence to support the harassment claim. The company said it found inaccuracies in Hurd's expense reports for his outings with the accuser, Jodie Fisher, who helped organize and host HP networking events that Hurd attended.