By Andria Cheng
It’s well noted by now that retailers, from discount to upscale, had a tough holiday quarter. Here’s an exception: Williams-Sonoma Inc.
While rivals such as Bed, Bath & Beyond Inc. /quotes/zigman/68991/delayed/quotes/nls/bbbyBBBY+0.32%and Pier 1 Imports Inc. /quotes/zigman/238377/delayed/quotes/nls/pirPIR+0.07%stumbled, Williams-Sonoma /quotes/zigman/246567/delayed/quotes/nls/wsmWSM, the parent of its namesake kitchen-gadget chain as well as Pottery Barn and West Elm, had its best holiday season in five years. Same-store sales surged a stunning 10.4% in the company’s fiscal fourth quarter.
Investors on Thursday were responding by driving the shares to an all-time high.
Williams-Sonoma “is really the best example of a retailer gaining market share because of their multi-channel format,” Jefferies analyst John Marrin told MarketWatch. “When weather is bad, customers go to the website. They leverage big data more effectively than anyone I’m aware of.”
For example, Marrin said, the company studies its online traffic to drive sales and help it figure out where to open new stores, what inventory to carry and what discounts to offer.
Online sales at Williams-Sonoma have increased by a three-year compounded annual growth of about 18%, to nearly $2 billion in sales last year, the company said late Wednesday. That is nearly half of its total sales of $4.39 billion and the highest proportion among major retailers.
Its online savvy, built on its older skills in catalog sales, is among the best of all retailers, said Craig Johnson of Customer Growth Partners. “It has perhaps the most effective multi-channel marketing of all retailers.”
Indeed, Williams-Sonoma says Pinterest is the No. 1 non-marketing related traffic driver to the website of West Elm, its younger, contemporary home-furnishings brand. It also features consumers’ Instagram photos in the store’s catalogs and partners with online artisan site Etsy to pitch hand-made crafts to its customers. The result? West Elm same-stores sales surged 18.3% in the fourth quarter, following a 19% gain a year earlier. It was the best performer among the retailer’s units.
Online marketing isn’t the only thing investors like about Williams-Sonoma. The company is also driving sales through a growing number of exclusive products such as its branded pizza maker as well as a new, more affordable line called Open Kitchen cookware and tableware at its namesake chain. At Pottery Barn, it’s expanding its in-home service offerings such as free design assistance.
Williams-Sonoma also is expanding overseas, opening company-owned stores last year in Australia and the U.K. It plans franchised expansion in the Middle East and the Philippines. In addition, it has introduced a personalized gift site called Mark and Graham and has bought lighting and home decor company Rejuvenation, which touts many American-made products.
“We are not just category lovers,” said Chief Executive Laura Alber on a conference call. “We are supply-chain experts and we are marketing maniacs.”
Being maniacs look to have paid off for Williams-Sonoma.
– Follow Andria on Twitter @AndriaCheng