Williams-Sonoma to Bring West Elm to Canada

Williams-Sonoma Inc. (San Francisco) has announced plans to bring its West Elm division to Canada. According to the Toronto Globe & Mail, the younger and hipper version of the parent operation will open its first Canadian stores in October in Toronto's King Street West area.

Later this week, Inter IKEA Systems B.V. (Delft, Sweden), which is going after the same young, on-a-budget, urban apartment-dweller, will launch a temporary "pop-up" showroom in the same Toronto neighborhood.

West Elm has been expanding rapidly. There are 32 West Elm stores today and industry observers told the Globe & Mail that it could have 200 or more outlets over the next several years. "We really want to take on more of the mass market, below Pottery Barn, which is why West Elm was conceived," said Dave DeMattei, group president at Williams-Sonoma. "We go after the upper tier of the mass market. We are a specialty version of IKEA."

Source: VMSD.com

Williams-Sonoma Continues Growth Strategy

SAN FRANCISCO-Despite e-commerce growth that contrasts with declining comp-store sales, Williams-Sonoma remains committed to a “cautious” store opening schedule, executives said at its first-quarter conference call.

The company will open a total of 51 new units this year across nearly all its brands, while closing 24 stores. No new Williams-Sonoma Home stores will be opened this year. The openings come even as comp-store sales declined 9%. Net revenues decreased 4.2% to $781.8 million. However, e-commerce sales have risen 8.7%, attributed to the natural growth of e-commerce and shoppers migrating from phone sales, not from stores.

“We’re continuing to monitor very closely what happens with customers who come from the web and migrate to retail stores, and retail customers who might migrate to the web,” said Howard Lester, chairman and CEO. “We’ve seen very little shift to the extent that it would affect our ability to pen retail stores. At this time, I don’t see any material change in our long-term strategy.”

Williams-Sonoma operates 603 stores under the Williams-Sonoma, Pottery Barn, Pottery Barn Kids, PBteen, West Elm and Williams-Sonoma Home banners.

Source: GlobeSt.

Williams-Sonoma gives cautious outlook

NEW YORK (Reuters) - Upscale home goods retailer Williams-Sonoma Inc (WSM.N: Quote, Profile, Research) on Thursday posted a higher quarterly profit but gave a cautious outlook for the current fiscal year, citing a challenging economic backdrop.

The owner of the Williams-Sonoma, Pottery Barn and West Elm chains, whose shares fell more than 6 percent before Wall Street's opening bell, said it expects first-quarter results of break-even to a profit of 3 cents a share, below analysts average estimate of a profit of 12 cents a share.

The company forecast second-quarter earnings of 15 cents to 19 cents per share and expects earnings per share for the fiscal year that began on February 4 of $1.42 to $1.56. Both of these forecasts were also below analysts' average estimates.

"As we look forward to 2008, we believe we will be operating in one of the most challenging macro-economic environments we have seen in many years," Chief Executive Howard Lester said in the earnings release.

For the fourth quarter, Williams-Sonoma posted higher-than-expected earnings, helped by an extra week of sales than the year-earlier period.

Fourth-quarter net profit rose to $124.6 million, or $1.15 a share, from $121.1 million, or $1.06 per share, a year earlier. Analysts had on average expected $1.12 per share, according to Reuters Estimates.

Net revenue rose 9.5 percent to $1.37 billion in the fourth quarter even as sales at stores open at least a year fell 0.1 percent.

Lester said the fourth-quarter results reflected the company's ability to execute its business in difficult economic times.

Higher gasoline and food prices, resetting of mortgage rates, a credit crunch and the U.S. housing decline has been felt by all retailers. But chains that specialize in home goods like Williams-Sonoma, Pier 1 Imports Inc (PIR.N: Quote, Profile, Research) and Bed Bath & Beyond Inc (BBBY.O: Quote, Profile, Research) have been especially hurt as the housing decline significantly weakened demand for new furniture and decor.

Given the increasingly challenging home-furnishings industry, Williams-Sonoma said it would focus on reducing catalog circulation, containing discretionary costs and aggressively managing inventory.

The San Francisco-based company also raised its quarterly cash dividend by 4.3 percent to 12 cents per share.

Shares fell to $23.40 in trading before the opening bell from a close of $24.99 on the New York Stock Exchange.

Source: Reuters