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Williams-Sonoma suffers, but brands stay strong

SAN FRANCISCO — While its Pottery Barn, West Elm and Hold Everything brands enjoyed strong results during the third quarter, Williams-Sonoma’s signature brand suffered lower than expected actual sales at the hands of outdoor goods, tabletop and cookware, the company reported this morning during its earnings call.

"The third quarter of 2004 was a very challenging quarter for the Williams-Sonoma brand. Although we expected our growth to be substantially lower than the prior year due to difficult sales comparisons and economic uncertainties, our actual sales growth for the quarter at 1.3 percent was below expectations, primarily in the retail channel," explained W. Howard Lester, chairman of the board.

Gains were experienced in the brand’s direct-to-consumer side, thanks to a 41 percent hike in unique visitors to the Web site.

In merchandise mix, categories that did well included linens, electronics, housewares and books, "mainly driven by new product offerings in these areas," Lester said.

"We believe the challenges we faced in (the outdoor, tabletop and cookware) categories in the third quarter will improve," he said, through enhanced sourcing initiatives, new merchandise offerings and other related efforts.

Bolstering the brand during the period was a favorable reception so far of the Williams-Sonoma Home catalog, which launched in September.

"This new premium brand extends the Williams-Sonoma lifestyle into every room of the home," said Edward Mueller, CEO. "We are pleased with the customer’s response."

Textiles were among the top selling categories for the catalog, others of which included furniture and decorative accessories.

In general for the brand, table linens continue to be a "very strong business for us," Lester said, "and we’ll continue to expand that and add more expanded assortments like hemstitched product that we’ve been very successful with."

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