X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

SAN FRANCISCO-Pottery Barn’s sales were down during parent company Williams-Sonoma’s second quarter, posting a performance that Chairman and Chief Executive Howard Lester calls, “way below expectations.” Year-over-year same-store slid 0.2%, and revenues increased 5.6% for the period, which ended July 30.

Executives say the problems at the 191-store chain were fueled by general macro-economic conditions and not specific issues at Pottery Barn. They also blame a decrease in mall traffic. “We’re seeing a greater price sensitivity than we have in the past,” said Laura Abler, president of the company, during a conference call.

The company is now adjusting prices at the chain and changing assortment displays, among other initiatives. Furniture was the only category in which Pottery Barn posted a sales gain during the quarter, and management says that this is due to having lower prices than competitors in the segment.

The 91-store Pottery Barn Kids chain, however, recorded an 8.1% same-store sales gain. This is due to those stores targeting a wealthier demographic that is not impacted by the overall economy’s pressures, such as energy prices.

The 256-unit Williams-Sonoma chain logged a same-store sales increase of 2.3% on a total revenue dip of 0.2%. The company undertook the renovation of assortment in 31 stores during the quarter.

Executives say they are hopeful about the chain’s more urban, 14-unit West Elm concept, but expectations for next year’s expansion have been cut in half, to 10 new stores. “The challenge for us is finding the right real estate in the proper neighborhoods,” Lester says. “We are aggressively looking for it.”

Based on Pottery Barn’s performance, the company is dropping its full-year revenue guidance from between $3.83 billion to $3.9 billion to between $3.75 billion to $3.8 billion. The earnings-per-share forecast has fallen from $1.97 to $2.01 to $1.87 to $1.94.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt
Live Chat

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.