Printer Friendly

WILLIAMS-SONOMA SEEKS TO TAP BUDGET MINDED.

SAN FRANCISCO-Williams-Sonoma is moving downstream with reports that the high-end specialty retailer is now eyeing a lower-end consumer.

The name Williams-Sonoma has become synonymous with high quality and taste, and its younger sibling, Pottery Barn, is now a hallmark of what casually gracious living is all about.

But, Williams-Sonoma now wants to capture the budget-minded shopper with a new format that is slated to open in the next six to nine months, said Bonnie Tonneson, an analyst at Hambrecht & Quist. She said the merchandise will be closer to the Pottery Barn concept than the Williams-Sonoma format.Williams-Sonoma did not return calls seeking comment.

"I can't tell you what our value plans are, but I can tell there's a lot to learn from [Gap's] Old Navy," said Gary Friedman, chief merchandise officer at Williams-Sonoma, according to TheStreet.com. "We are positioning ourselves in the value-priced category." Williams-Sonoma will create an entirely new brand for the format, said Tonneson.

Williams-Sonoma is by no means alone and scores of other upper-end retailers are seeking to tap the lower-income shopper. Crate & Barrel will soon be opening its Blueprint format. And don't forget Federated Department Stores' recent acquisition of low-end cataloger Fingerhut. Pier 1 had been considering a move to a lower-end concept, but the Texas-based company said it will instead target a more upscale format (see story, page 6).

"Williams-Sonoma is trying to capture a new target audience," said Kurt Barnard, president of Upper Montclair, N.J.-based Barnard's Retail Trend Report. "[The retailer] would like to broaden its customer base, and the best way to do this is to reach out to a customer segment that up until now has essentially eluded it."

The company's stock has been trading about $10 below a high hit earlier this year at 40 3/4. The drop was partly attributed to the announced retirement of Williams-Sonoma's chief administrative officer, Dennis Chantland, who was seen as leading its growth.

"Williams-Sonoma hasn't recovered since Dennis Chantland announced he is going to resign," said Kim Galle, director of specialty retailing and consumer products research at Boston investment bank Advest.

The lower end of the market has been attracting much attention, thanks to stores like Target and Kmart, which realized that these shoppers want tasteful home furnishings without breaking the bank.

"Is Williams-Sonoma going to successfully compete with Target?" asked Galle. "Probably not. So they are going to have to move somewhat above that [model] and figure out how they can make it work."

"They are preparing themselves for the day when they will run out of new store sites [for Williams-Sonoma and Pottery Barn], and by that time they'll have gotten enough experience under their belts," Barnard said.
COPYRIGHT 1999 MacFadden Communications Group LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1999 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Comment:WILLIAMS-SONOMA SEEKS TO TAP BUDGET MINDED.
Author:Vincenti, Lisa
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Article Type:Brief Article
Geographic Code:1USA
Date:Jun 28, 1999
Words:449
Previous Article:NEWS BRIEFS.
Next Article:BED BATH & BEYOND SHUFFLES TOP MANAGEMENT.
Topics:

Terms of use | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters