Williams-Sonoma exits remote work
Despite the tough economic environment, multi-brand home furnishings retailer Williams-Sonoma credited the combination of strong real estate, high gas prices and more people working from home with driving results records in the first quarter and good prospects.
“The current economic environment is challenging, but the housing market remains strong, the rise of hybrid working means people will continue to spend more time at home, and rising gas and travel costs have always leads people to stay home to cook. and entertain,” Laura Alber, CEO of Williams-Sonoma, told analysts on Wednesday (May 25).
“We believe these three trends will result in a continued momentum to equip and improve the home and as a business we are ready to manage economic uncertainty,” she added, not only for the period of three months that ended May 1, but also in terms of achieving its full-year goals as well as its longer-term goal of reaching $10 billion in annual revenue by 2024, compared to $8.2 billion last year.
To get there, the parent company of Pottery Barn, West Elm and half a dozen other brands said it was looking to capitalize on the growth of its core retail businesses, as well as its new B2B efforts. , its market and its plans for global expansion.
“Understanding our industry is key to putting our results into perspective,” Alber said on the call, highlighting Williams-Sonoma’s place as a great digital company within a highly fragmented $800 billion industry that generates more than half of its sales from small businesses. , brick-and-mortar retailers lacking sophisticated e-commerce capabilities.
As such, Alber said the company plans to leverage these strengths and trends to capture a bigger slice of the home furnishings pie, where it currently only holds around 1% of the share.
The stage of creating the home
While Williams-Sonoma’s flagship brand saw first-quarter comparison store sales drop 2% due to stockouts, its Pottery Barn and West Elm brands increased same-store sales by 15% and 13%, respectively.
Not only did the latter two brands benefit from inventory availability, but Alber said omnichannel presence and strong appeal to younger customers were also factors behind their outperformance.
Alber also pointed to the general shift towards online shopping as well as the trend of what she called “millennials moving into the home-making stage” as key drivers for results and future opportunities. of the company.
“In an industry occupied by companies that are lagging behind in developing their digital experiences and capabilities, and pure-players that are inexperienced in running stores, we believe we are well positioned as as a digital-first, but not digital-only business,” she said, noting the leadership team’s experience in managing in difficult times.
Great opportunity in B2B
Although the retailer’s non-core B2B business still only accounts for around 13% of total revenue, the unit’s 53% growth rate and $250 million contribution has not gone unnoticed in road to its biggest quarter in its history.
Alber said the addition of commercial customers not only adds access to new customers, geographies and industries, but presents “exciting opportunities” to provide solutions to underserved markets. One of those new markets is the hospitality industry where Williams-Sonoma said it just finished installing furniture for Marriott’s new headquarters hotel.
“We are winning in this space by leveraging our best in-house product design capabilities to develop products specifically for large contract projects,” Alber said. “The continued expansion of our customer base not only increases our business volume, but also allows us to focus on a wide range of customer types and verticals,” she added, noting that the he B2B effort had strong momentum and energy.