Williams-Sonoma braces for ‘most difficult’ 2008
Staff Staff -- Furniture Today, March 27, 2008
San Francisco – As the 2008 retail year gets underway, Williams-Sonoma Inc. is bracing for what it predicts as “one of the most difficult,” if not “the worst” economic periods in memory, by arming itself with new and enhanced product categories and shopping-level marketing initiatives, the upscale home furnishings retailer said today during its fourth-quarter and yearend earnings call.
The company now projects a 2008 revenue decline of 3.9% to 1.7%, and projects a comp-store sales drop of 5.5% to 3.0%. Earnings per diluted share, projected at $1.42 to $1.56, will be down 19.3% to 11.4% from the $1.76 earned in fiscal 2007.
Williams-Sonoma Inc. posted full year 2007 net revenues of $3.94 billion, up 5.6% from $3.73 billion in 2006 (comps gained 0.3%) -- but net earnings of $195.8 million fell 6.3% from $208.9 million the year prior.
“We are aggressively looking at our assortments to rationalize our skus, and this is really important because it allows us to put the investments in the things that drive the business and reduce those that just create noise for our customers, distribution and vendors,” said Laura Alber, president.
The company is implementing a range of strategies for its six retail formats.
Williams Sonoma Home has chosen Scottsdale, Ariz. as the location for its 10th unit – representing the single new store the chain plans to open this year.
The 27-unit West Elm will in 2008 expand its retail store base with 12 new stores, vs. the five openings in 2007.
Pottery Barn’s 190-plus units this year will introduce “a greater level of newness” via innovative product development and better visual merchandising. It is also working to improve its direct marketing with “strategic changes” in catalog circulation, catalog versioning and paid search, and likewise improve its customer service levels at the stores.
Pottery Barn Kids division will move to “filling in the gaps in the merchandising assortment across all categories” within the kids’ bedroom aspect; grasp the “important opportunity” posed by the nursery category by further strengthening Pottery Barn Kids’ vendor base; and improving direct-to-consumer marketing.
Finally, Pottery Barn Teen – like West Elm – turned in a solid performance, with “strong growth” in all key merchandising categories, particularly furniture, textiles and decorative accessories, Alber said. The company is optimistic for the year ahead for the division.
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