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Williams-Sonoma bullish, with caveats, on 2008   

New York – The macroeconomic outlook for 2008 isn’t dampening Williams-Sonoma Inc.’s spirits; indeed, company execs expect to snap up market share as competitors struggle for sales – although they won’t promise to make more money doing it.

“Being a strong company in a weak environment presents opportunities,” evp/chief marketing officer Pat Connelly told attendees at the Cowen and Company 6th Annual Consumer Conference here yesterday. “We are financially stronger and our brands are stronger than at any time in the past.”

He added that while there is some pricing pressure, “Our suppliers around the world are not feeling the need to raise pries like they did a year ago.”

Connelly’s tone was distinctly more upbeat than the note struck by chairman and ceo Howard Lester, who just the day before said, “The macro retail environment is going to be increasingly challenging in 2008,” and projected flat to single-digits sales growth for the year – and “a low-single to mid-single digit decrease in diluted earnings per share.”

Lester’s remarks came as San-Francisco-based Williams-Sonoma announced on Tuesday that it had reduced its earnings outlook for the fourth quarter of 2007.

Meanwhile back in New York, Connelly outlined the $3.7 billion company’s major initiatives for 2008, many of which focus on improved direct-to-consumer outreach. The Williams-Sonoma brand website will relaunch this month, with 50 embedded videos providing product demos and information as well as improved search capabilities and specialty shops. Websites for the company’s other brands will relaunch in similar formats over subsequent months, Connelly said.

The company is leveraging its propriety database – 43 million customers strong – to direct special offers to customers who are still shopping. A new marketing platform, launched this past September, allows tailored one-to-one email offers that a bringing in returns from 4% to 15% above average, he said. After several months of testing various paid search methods, Williams-Sonoma will shift more direct marketing money in that direction.

Within brands, West Elm this year will focus on “modern forms mixed with rustic features,” Connelly said, and will grow its textiles offerings by emphasizing organics and naturals.

The Pottery Barn brand launched a new product assortment this month centered on intense color and environmentally friendly product. “We’re reintroducing and marketing entry price points across all product areas,” he said.

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