Restoration Hardware Sues Crate and Barrel Over Trade Secrets

Restoration Hardware and Crate and Barrel are going head-to-head in court over trade secrets and in-store cafes. The trendy Three Arts Club Cafe operated by Restoration Hardware inside its RH Chicago Gold Coast gallery is at the center of this fight. In 2012, Restoration Hardware started developing a concept to include food and beverage services at certain gallery locations, according to its lawsuit filed Monday in a California superior court. Restoration Hardware is now trying to stop Crate and Barrel from opening a food and beverage operation in any of its stores for a year. Crate and Barrel CEO Douglas Diemoz and another top executive, Kimberly Ahlheim, are named as defendants — both worked at Restoration Hardware and are accused of stealing trade secrets and breaching contracts with their former employee. Some of this inside information includes how to sell coffee and wine in the same store in which customers buy stemware and settees, the suit alleges.

Total Retail’s Take: Food and beverage concepts are popular right now. For Restoration Hardware, the idea took years to come to fruition, and now the company doesn’t want its competitor to be able to do it the easy way — and breaching a contract is no joke. Restoration Hardware is asking the court to order Diemoz and Ahlheim to erase all proprietary information they have, and prohibit Crate and Barrel from opening a food and beverage service in any of its store locations for a year. It also wants the court to prevent Crate and Barrel from employing Ahlheim in a position where her proprietary knowledge would be valuable for a year. This could severely hurt Crate and Barrel’s plans if the court sides with Restoration Hardware.