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Slow, careful growth for new catalogs

NEW YORK Though the company feels confident of the opportunities available with its newest brand — PBTeen — introduced last month, as well as West Elm, Williams-Sonoma says it will be conservative when growing the segments.

"We don't spend a whole lot of money on [a new segment] until we know we have a business," said Howard Lester, chairman, at the Merrill Lynch Global Retailing Leaders Conference. The company will have a better sense of how PBTeen will perform at the end of the year, he said, when it will probably break even.

"That's how PBKids happened, and now it's a $300 million business and growing at 30 percent," Lester noted.

The company will also remain conservative in adding other channels to the West Elm brand, thought it is thoroughly pleased with the customer response so far. A Web site will be introduced this year, and retail stores are planned for 2004.

"West Elm targets a very different customer" than the Pottery Barn brand, said Lester, and Williams-Sonoma wants to first pinpoint where those customers are located before it opens a store. It also didn't want to fall into the trap that other retailers do and open up too many stores and then become more promotional, he said.

The company originally intended to open eight West Elm stores this year before scaling those plans back. It's possible, though unlikely, a store still may open this year.

Both brands will have significant catalog presence, however, and more than 50 percent of the increased circulation for the company this year will be due to them, according to Sharon McCollum, cfo, Williams-Sonoma. Initially mailing 5.7 million books last year, West Elm will hit 15 million this year, as will the PBTeen catalog, set to mail its first issue April 21.

Besides the increased circulation, the latest West Elm catalog, which hit households last week has increased its page count to 76 pages.

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