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Williams-Sonoma Home to be edited, West Elm to expand
Apr 30, 2010

Williams-Sonoma Inc. is in the process of editing its Williams Sonoma Home business but aggressively building on the momentum of its West Elm brand, according to a report in Home Textiles Today. “We believe that to best leverage the opportunity with Williams Sonoma Home, we will be using the Williams-Sonoma brand and taking aspects of that brand and using the ones that are most beneficial to our bridal registry and our designer businesses and marketing those to the Williams-Sonoma brand,” said Sharon McCollam, evp, coo and cfo of the company. “West Elm is where we are very focused right now. We think there is substantial opportunity with this more value-focused customer to really take that brand, make it broader, and that is really a significant opportunity,” she said.
The company plans to expand the limited assortment to include more categories of goods. It will also widen its design approach to appeal to a broader demographic and embark on retail expansion. “We just had meetings last week with all of our landlords, really discussing the opportunities for West Elm. We will refine the real estate positioning. This likely means smaller stores to allow for more stores as well as enhanced internet capabilities. This customer is highly web savvy,” she said.
Both nameplates are part of the company’s larger effort to restore retail channel profitability to its historical levels, said Patrick Connolly, director, evp, chief marketing officer. At the center of the company’s thinking right now is its e-commerce and internet-related businesses and initiatives, which Connolly said “have become the focus of our capital investment. We are reorganizing key parts of our business to focus exclusively on the internet opportunity, not only as it relates to our core ecommerce but also to building content and community, new revenue streams and potentially new businesses.” Nearly 40% of Williams-Sonoma Inc.’s total corporate revenue is direct, and 30% is ecommerce.
“We believe that this new model will increasingly be the preference of the upscale consumer,” he continued. “We believe that we are approaching an inflection point where our retail and direct revenues will begin to converge. Because the internet is our most profitable channel, sales growth in this channel will have a disproportionally positive impact on total corporate earnings. This 30% of corporate revenue that is e-commerce is very profitable. It is the primary driver of the channel.”
Click here for full story: Home Textiles Today.

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