March 11, 2002, 12:00 AM

E-commerce driving direct-to-consumer sales growth at Williams-Sonoma

Online sales are now about 25% of Williams-Sonoma’s direct business – but about half of those customers place web orders after shopping the catalog first.


E-commerce is driving growth in Williams-Sonoma Inc.`s direct-to-consumer business, company executives told an analysts’ conference call held today to discuss the company’s fourth quarter and year-end results.

“The online channel continues to perform extremely well,” and is attracting "significant" numbers of new customers to Williams-Sonoma sites, said CEO Dale Hilpert. “During the peak season, for every 100 orders received at our call center, we received 50 orders online and the ratio is close to that now,” he said. Online sales are now about 25% of the company’s direct-to-consumer business, which also includes its catalogs, he added.

Catalogs remain critical to Williams-Sonoma’s’ Pottery Barn, Pottery Barn Kids and Williams-Sonoma brands not only in their own right, but as a complement to the online sales strategy. About half of online sales are coming from customers who are using the catalog to shop and the web to place their orders, Hilpert says. Pottery Barn Kids, for example, will increase catalog mailings by 20% this year. The year’s initiatives for the three leading Williams-Sonoma brands include cross-channel promotions and expanded use of electronic direct marketing to drive store traffic and increase brand awareness.

Williams-Sonoma posted net earnings of $70.4 million on net revenues, including shipping fees, that rose 17% to $787.4 million for its fiscal fourth quarter ended February 3. For the quarter, store sales increased 23% to $507.8 million over fourth quarter the previous year. Direct-to-consumer sales for the fourth quarter rose 5.7% to $238.9 million from $226 million the previous year.

For the year, net earnings rose 34% to $76.1 million on revenues that rose 14.6% from the previous year to $2.096 billion. Net store sales for the year increased 18.6% to $1.233 billion while direct-to-consumer sales for the year rose 8.2% from fiscal 2000 to $741.1 million. Results for Willliams-Sonoma also included those for the Pottery Barn, Bed + Bath, Hold Everything and Chambers brands. Williams-Sonoma operates 415 stores, six mail order catalogs and five e-commerce web sites.


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