Although Restoration Hardware's retail concept centers around fixtures and furnishings for the home-improvement market, its huge success can be attributed to responding to America's nostalgia for a time when everyday objects were built to last, with no pre-planned assumption of obsolescence. Its primary stock-in-trade is authenticity. For sophisticated baby boomers, Restoration Hardware satisfies a desire for things rich in history and style

Enter Restoration Hardware, and you feel an excitement and sense of discovery evocative of visiting a wonderful estate sale - except that all the items here are new. As you stroll from room to room, you are struck by the exquisite built-in cabinetry, the silver sage painted walls trimmed in white and beech, the graceful white columns and the natural quality of light.

Then you begin to notice the objects for sale in every room. Craftsman-style wooden furniture, hand-rubbed to a lustrous finish. A Beaux Arts table lamp and torchière. An Art Deco-inspired chair. Victorian glass doorknobs. Pewter fixtures. And much to your delight, scattered here and there on chests of drawers and end tables, are toys you have not seen in years - a tin speedboat, a wind-up Atomic Robot Man, a sock monkey and the like. Wistfully, you think back on simpler times when quality and pride of craftsmanship, even in the making of household tools, counted for something.

That yearning for authenticity is turning Restoration Hardware into one of the hottest retail concepts in the country. Today it operates 65 stores in 25 states and British Columbia and enjoys annual sales of nearly $100 million. While Restoration Hardware is capitalizing on the growth of the home improvement market, it understands that upscale baby boomers aren't looking so much for ultramodern style as they are for well made and classically designed fixtures and furnishings.

Founder and CEO Stephen Gordon understands this desire well, since the retail concept grew out of his own personal search for such things. At the time, the idea of starting a retail business was the farthest thing from his mind. The odyssey to what Restoration Hardware is today began in 1979 when Gordon, just awarded a master's degree in psychology, accepted his first job as a counselor in Eureka, California. He quickly realized that his passion for the human psyche was on a more abstract level, and one day while listening to a client describe her decision to murder her neighbor, he resolved to quit his job and open a bed-and-breakfast establishment in the scenic coastal town.

Purchasing a dilapidated six-bedroom Queen Anne Victorian, he set out to restore it to its original elegance, but discovered that authentic period hardware, lighting fixtures and other finishing touches were extremely hard to find. In fact, he spent long hours contacting obscure sources throughout the country to locate what he needed. Once he found them, neighbors began asking where they could get them too. That gave Gordon the idea of buying two and keeping one - and lo and behold, what was to be the front room of the B&B became Restoration Hardware's first retail space.

Over the next decade, customers came from all over northern California to buy Restoration Hardware's hard-to-find items, and finally in 1989, Gordon decided his retail concept would appeal to a wider market. "If we could make it in Eureka, where disposable income is not king, I knew there was opportunity," he says. The enthusiastic reception of its first few stores in California gave the company the confidence to expand into markets across the country. In June 1998, Restoration Hardware became a publicly traded company on the NASDAQ.

"Restoration Hardware has evolved into a home furnishings store with a hardware soul - or, at least, a hardware genesis," says Gordon. Indeed, it still carries hammers, flashlights, tool kits and other traditional hardware goods, and such merchandise may explain why it attracts more male shoppers than traditional home furnishing stores. However, Restoration Hardware primarily targets customers who are drawn to the intrinsic beauty of objects as well as their functionality.

Not a threat to Home Depot or the neighborhood hardware store, Restoration Hardware appeals to those seeking items with a one-of-a-kind feeling, albeit a door knocker or a rocking chair. Architecturally designed to evoke the feeling of a spacious home, the store environment invites leisurely browsing, with customers passing through a foyer-like area to enter a "great room." Other store sections - the bathroom, the bedroom - are delineated by distinctive white columns. Lamps and decorative items for sale are often displayed individually on appropriate furniture, allowing shoppers to view them as they might be used at home.

The effect also creates a sense of surprise. Shoppers delight in the fact that they never know what to expect around the corner or on the next shelf. A $6 gyroscope toy may be displayed next to a $2000 leather club chair and ottoman. Prices range from $5 to upwards of $5,000, attracting both impulse gift shoppers and people in pursuit of serious furniture. "We don't buy products for particular price points. We don't make perceptions about customers who do, or do not, fit a given price point," says Gordon. "The touchstone for us is the question, 'Would you want this in your home?'"

Gordon continues, "At times, we've added items just to be playful. I'm not sure we even have a formula, but we have a point of view." A miner's lunch box, a book of labor-savings hints from the 1920s, a "Home Improvement" star Tim Allen signature hammer, a bootscrape shaped like a hedgehog - all make shopping an entertaining experience and one that summons memories.

While most of Restoration Hardware's merchandise, Gordon acknowledges, is rooted in the past, he adds, "It's not about nostalgia. It's an intuitive process to understand what an egg beater can mean to people, to package a set of salt cellars so they evoke a whole set of memories...We appreciate tradition and history, but we stay away from ye-old." .

Gordon has concluded that customers want tradition that isn't stodgy, a retro outlook that appreciates the design values in common objects from the first half of the century, but doesn't smack of trendiness. "As technology becomes part of every minute of our day, we're harkening back to a simpler, pre-information age, where we can recreate what we once had, or create what we wish had been."

He stresses, "What ties everything together for us is authenticity, quality, functionality and, finally, something you can tell a story about."

Stories, written by Gordon, are an important means of enhancing appreciation and understanding of Restoration Hardware's eclectic product mix. In fact, Gordon says he "started writing signage as a justification for having certain items in the store." These anecdotal placards tell customers why Gordon found each product so appealing, and sometimes even recount a personal memory of having one just like it way back when. The personal tone of these descriptions reinforces the impression that Restoration Hardware wants to share its wonderful "finds" with shoppers rather than merely promote merchandise.

These stories have also found their way into Restoration Hardware's new catalog, which debuted in August 1998.

This fall Restoration Hardware is opening a new store in the Flatiron district of Manhattan. At 10,000 square feet, it is the company's largest store to date - thousands of feet larger and thousands of miles removed from Restoration Hardware's original 3,000 square foot store in the quiet town of Eureka.

The company's dramatic success stems from its determination to buck many retail traditions, concentrating instead on a simple yet unique strategy of authenticity. "From the beginning, I had my own focus," Gordon says. "Call it intuition, ignorance or naiveté, I never worried too much about accepted techniques."