Williams-Sonoma Home preps fall launch
January 19, 2004,
After its recent brand extensions targeting the younger crowd, Williams-Sonoma is now set to pursue the other end of the spectrum, as Williams-Sonoma Home is set to launch this fall.
Expected to launch in September or October, the new premium brand is "well underway," and will include a retail component eventually, true to how it launches its brands historically.
"We have a significant opportunity to leverage our customer base," he said. "We know the Williams-Sonoma name helps."
This latest concept is actually not the newest, having been an idea of the company's for 10 years. But the company's success is due in part to its careful maneuvering, which it can afford to do because of its portfolio of brands.
"Multiple brand development reduces the risk going forward," said Connolly, mentioning that it waited 10 years for the right real estate location for its recently opened San Francisco flagship store. "We can afford to be patient and disciplined because we have other ways to grow business...We've said internally that if we don't believe it can be $500 million eventually than we probably shouldn't go into it."
The company's Internet component also continues at an astounding pace, garnering a quarter of the company's sales last year, with plans to be 35 percent this year.
"Before, it was an advantage if you had a web site," Connolly said. "Now it's a disadvantage if you don't have one."
The biggest complaint from Chambers customers, its oldest group, actually, is that the catalog doesn't have a web site. "The fastest adoption rate is seniors," he noted.
The company's total direct sales will be 40 percent for the company, or $1.1 billion this year. It has a good holiday season as well, as sales jumped 28.7 percent for the eight-week period.
Though its brands can play off each other well, Williams-Sonoma is careful not to abuse or dilute them. For example, the Pottery Barn catalog has the largest mailing of all of its brands, and it would be easy to add several pages of PB Kids or PB Teen to prospect, said Connally. "For the short term, you'd get a lift; for the long term, it muddies the brands."
However, when the different catalogs are mailed closely together, the company has found that it only reinforces the brand, instead of cannibalizing them.
Now with 512 stores but with a potential of 700 to 800 locations, the company will stick with its strategy of growing its large stores in its best markets, he said. "We don't want to be on every corner; we want to be the best location on the best street."
The Williams-Sonoma brand will grow its square footage 10 to 11 percent this year, totaling 237 units. In some stores it finds that increasing the store footage will increase sales per square foot. Last year, it grew its store count by 19 percent, while its sales per square foot jumped 39 percent.
Pottery Barn will have 12 percent growth this year, with a potential store base of 225. The company also believes PB Kids can grow to 125 to 150 units.
It is very pleased with its PB Teen brand, launched last April, and will achieve $50 million in revenue in a little more than half a year.