April 2, 2008, 12:00 AM

Williams-Sonoma cooks up $1 billion in annual web sales

Williams-Sonoma is among the new members of the $1 billion online sales club. In 2007, the Internet made up 28% of total sales, but represented 81% of revenue growth across stores, the web and catalog.

Williams-Sonoma Inc. is among the new members of the $1 billion online sales club.

For the year Williams-Sonoma posted web sales of $1.1 billion, an increase of 18.6% from web sales of $927.6 million in 2006. Fourth quarter e-commerce sales rose by 29% to $368.6 million from $285.5 million in Q4 of 2006.

E-commerce and the Internet also continue to be the fastest growing channel for Williams-Sonoma, No. 20 in the Internet Retailer Top 500 Guide. In comparison to e-commerce, overall sales grew by just 5.9% in 2007 to $3.94 billion from $3.72 billion in 2006. Comparable store sales increased year-over-year by just 0.3%.

In 2007, the Internet made up 28% of total sales, but represented 81% of revenue growth across stores, the web and catalog. “In the Williams-Sonoma and West Elm brands, we delivered the highest direct-to-customer operating contributions in the brands’ histories,” CEO Howard Lester told analysts on the company’s recent year-end earnings call.

Web sales are growing for Williams-Sonoma because the retailer is taking certain steps to cater to its core Internet shopper: higher income professional and serious casual cooks who prefer shopping online. Williams-Sonoma re-launched its flagship site, Williams-Sonoma.com, in January with advanced features and more videos and exclusive web-only merchandise. In 2008 the company also will redesign its other sites, including PotteryBarn.com.

“We will expand our e-commerce support, including natural and paid search and targeted electronic direct marketing,” Lester told analysts. “We will be strengthening our marketing message to the consumer by highlighting the quality, value and cultural authenticity of our exclusive product offerings.”

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