Williams-Sonoma ponders a private label for itself

By Andrea Lillo -- Home Textiles Today, 6/23/2003 12:00:00 AM

NEW YORK —

Williams-Sonoma may be the next brand to extend itself at Williams-Sonoma Inc., executives said at the Thomas Weisel Partners' Growth Forum 5.0 here last week, indicating that the nameplate will move beyond the eating and cooking areas to other parts of the home.

"We think there's a huge opportunity there. The brand is very strong," said Howard Lester, chairman.

Williams-Sonoma is considered the company's premium brand and generally aims at 40- to 55-year-olds. The extended home brand will target the better customer — the bottom 20 percent of those people using designers. "There's really no one who is in that space at all," Lester said.

The company recently hired Dave DeMattei in the new position of president of emerging brands to develop the concept, as well as to oversee West Elm and Hold Everything. DeMattei's retail experience includes serving as cfo of the Gap, as well as executive positions with J. Crew and Coach.

With Williams-Sonoma Inc.'s portfolio of brands, "we're not forced to grow one brand too quickly," like opening stores in poor locations, or offering specially priced merchandise to maintain sales growth, said Pat Connolly, executive vp and chief marketing officer. "We always have new and emerging brands in the pipeline. We believe our multi-channel strategy is unique and creates an advantage for us."

The company recently introduced the Pottery Barn Teen brand, and last year launched West Elm, a catalog pitched at younger urban apartment dwellers.

"They've always been talking about bringing the Williams-Sonoma brand out of the kitchen and into other areas of the home," said Kristine Koerber, analyst, WR Hambrecht. This concept will probably take the same route as the others, which will be to start with a catalog to test its potential and then expand from there into bricks and mortar, she added.

However, Koerber said she saw no role for Williams-Sonoma in soft home, noting that higher end textiles are already offered through the company's Chambers catalog business. "I see them going more in the hard line side," she said.

However, "there's a lot of speculation right now. And I don't think anything will be happening this year. At least, I hope not, they have a lot on their plate this year."

The company has already begun the introduction of furniture pieces into its Chambers catalog "little by little," noted Joan Storms, analyst, Wedbush Morgan Securities, including such items as beds, end tables, lamps, sitting room chairs and vanity pieces. This is a test for the home concept, she speculated, though the company's is probably "pretty far away" from announcing concrete plans. Williams-Sonoma historically has not done much with the Chambers brand, she added, making it "a good vehicle [for this concept] because of the classic styling and high quality items" that Williams-Sonoma is known for.