W-S Counts on Newer Brands
Michele SanFilippo -- Home Textiles Today, September 5, 2005
San Francisco — Williams-Sonoma, Inc. is looking to emerging brands — particularly West Elm, Williams-Sonoma Home, PB Teen and Hold Everything — as the means for increasing sales and attaining long-term growth, company executives related during its second-quarter earnings conference call last week.
All five of the new West Elm stores currently rank in the top 20 percent of highest volume producing stores, executives said. Three of them consistently are in the top 10 percent. Executives described the anticipated Williams-Sonoma Home stores as “some of our more magnificent stores overall.”
“Our initiatives to broaden merchandise assortment, soften the color palette and enhance the lifestyle presentation are clearly attracting many new customers to the (West Elm) brand, which is critically important as we accelerate our growth plans in 2006,” said Ed Mueller, Williams-Sonoma CEO, adding that an additional store will open later this year.
Long-term goals in emerging brands include building customer databases and expanding multi-channel capabilities, in addition to adding more stores and increasing catalog circulations.
In the Williams-Sonoma Home brand, the company will increase catalog circulation in the back half of the year, add order replacement functionality to the e-catalog Web site and open its first three stores in the third quarter. According to Mueller, “We continue to believe the retail launch will accelerate growth in this brand due to the customers' desire to see the product and experience the brand's design authority.”
In Hold Everything, the company plans to approach the second half of the year cautiously while adding new fall and holiday merchandise, and suspending all new store openings.
In Pottery Barn and Pottery Barn Kids, the company is encouraged by positive consumer response to core and seasonal merchandise in textiles and furniture, also including back-to-school gear in the PB Kids brand. The ongoing performance of the bedding and gift-giving assortments, and renewed strength of decorative accessories at PB Kids have been encouraging, said company executives. It will expand holiday gift-giving assortments to include a greater number of gifts for all age groups.
The company will also aggressively pursue holiday gift-giving opportunities, introduce new merchandise categories and substantially increase catalog circulation and electronic direct marketing at PB Teen. It wants to remain proactive in building new marketing strategies to increase teen interaction such as contests, surveys and sweepstakes.
In core brands, goals consist of increasing retail lease square footage in catalog circulation; refining retail/catalog merchandising strategies in the Williams-Sonoma brand; expanding traffic-generating merchandise assortment in PB Kids; increasing outlet/lease square footage to maximize a return on excess inventories across growth channels; and implementing new marketing strategies such as e-marketing and gift cards.
The company attributed the strong performance of the Williams-Sonoma brand in linens, electrics, cutlery, cookware and core food to the redesign of the catalog and increase in online marketing.
Online bridal, search capabilities and electronic direct marketing were identified as significant long-term growth opportunities.
Williams-Sonoma's relationship with CBS will also be expanded to include a new promotional DVD campaign featuring CBS personalities presenting cooking ideas from the New York flagship store along with ongoing national publicity from the “five-minute cooking school” series.
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