Emerging brands a plus at Williams-Sonoma
By Staff -- Home Textiles Today, 9/23/2008 2:03:00 PM
San Francisco – Williams-Sonoma Inc. is looking to its emerging retail formats, as well as strict inventory discipline, as bright spots in its outlook for holiday and beyond.
“We are maintaining a conservative outlook,” said Patrick Connolly, evp, chief marketing officer during the presentation today at the Thomas Weisel Partners Consumer Conference 2008. “We will reduce our inventories to be in line with sales, which has the added benefit of higher margins.”
“Pottery Barn, excluding new and expanded stores, actually reduced inventories by $36 million on a year-over-year basis in the most recent quarter, despite a significant shortfall in sales.” he said. “Because we anticipated a downturn, we bought accordingly.”
As reported during the company’s recent second quarter earnings call, the company’s “emerging brands” – West Elm, Williams-Sonoma Home and PB Teen – represent the upside.
“Our emerging brands have enjoyed growth of 16% this year and are showing growth, even in the most recent quarter,” Connolly said.
Williams-Sonoma Home is “demonstrating improvement” thanks to a revitalized merchandising effort. “We actually recorded flat comp store sales during the second quarter,” Connolly said.
Pottery Barn Teen boasts a year-over-year growth rate of 25% thus far this year. Part of that increase is fueled by the fact that 60% to 70% of new PB Teen customers were once Pottery Barn Kids customers, he observed.
As for West Elm, this newest of the brands “continues to show good growth, but it is not immune to macro headwinds,” Connolly admitted. Also growing “positively” is the website of Williams-Sonoma, even though the brand “has been impacted.”
On the flip side, Pottery Barn and Pottery Ban Kids “are not enjoying the same level of performance,” Connolly warned. To aid these nameplates, the company has “many things that we are working on to improve, but we can’t completely overcome the external forces.”
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