Hold Everything Calls It Quits

"We expect to cease all marketing under the Hold Everything brand name by the end of 2006," said Howard Lester, chairman of Williams-Sonoma, explaining that the along with the closing of the stores the company will cease operations of the Hold Everything web site and other marketing efforts. Discontinuing the brand will cost the company an after-tax charge in the range of $10 million to $12 million, or about 9 cents to 10 cents per diluted share.

Williams-Sonoma expects to incur most of the charges against its fourth quarter fiscal 2005 financial results and the remainder in the first two quarters of fiscal 2006. The charge will primarily include lease termination costs and other expenses associated with the shutdown of the Hold Everything retail stores, the write-off of the Hold Everything web site costs, employee severance costs and other charges.

Hold Everything was the only Williams-Sonoma brand that did not produce positive comparable store sales results for the eight-week holiday period that ended Christmas Day. Overall, comparable store sales increased 4.5% for Williams-Sonoma during that period.

The demise of the Hold Everything brand marks the end of an effort that Williams-Sonoma launched in the fall of 2004 to revitalize the brand's name. It said at the time that it was going to re-tool the image of the 20-year-old Hold Everything brand, and it unveiled test stores too.

At the time of the re-tooling, Hold Everything was down to seven retail locations after the closing of 18 stores throughout three years, and the web site of the same name was part of the effort to revitalize the brand. Some indications of Hold Everything's fate have appeared in recent financial filings by Williams-Sonoma, which noted in a recent quarterly financial report that in its Internet and catalog sales, all brands except Hold Everything delivered positive growth during the quarter.

In that quarterly filing, Williams-Sonoma said that it was approaching the remainder of the year cautiously with respect to Hold Everything. It said in the filing that it was suspending all new store-opening activities, reducing catalog circulation, reducing existing 2005 and 2006 inventory commitments and suspending any new inventory commitments.

Williams-Sonoma announced Thursday's news about Hold Everything as part of a report on the company's sales results for the Christmas sales season. The company's sales roses 12% on a year-to-year basis to nearly $869 million for the eight weeks ending Dec. 25.