The Key Takeaways
- William-Sonoma executives have resisted the temptation to offer promotional prices at a moment when other retailers are slashing their prices in an effort to lure bargain-minded customers.
- For several years now, Pottery Barn’s parent company West Elm and Pottery Barn has been reducing discounts.
- CEO Laura Alber says Williams-Sonoma consumers may be "better off" than others.
Williams-Sonoma wants to stick with promotions from the past.
The parent of Pottery Barn, West Elm, and the luxury kitchen retailer Williams-Sonoma is sticking to its years-old strategy of easing off promotional pricing, executives said on the company's earnings call Wednesday. "We're absolutely committed to the stance of running the business without promotional pricing," said Williams-Sonoma CEO Laura Alber.
“We made the decision, as you know, to stop this up-down pricing and this constant promotion,” AlphaSense provided a transcript from the call. Alber spoke on this call. “Once you’re in that loop, you can’t stop it."
According to the company, customers have responded well to “consistent price”.” and may even appreciate that there is no longer an incentive to spend weeks checking whether the price of an item drops. The decision stands out at a time when some other retailers, including Walmart (WMT) and Target (TGT), are discounting items for customers who are seeking out sales.
Williams-Sonoma is catering to those with bigger budgets. The cheapest king beds available on Pottery Barn (about $750) and West Elm ($500), for example, cost hundreds more than the $72 frame on Walmart’s website or the $76 deal offered online at Target Wednesday.
Alber said Williams-Sonoma customers may be weathering the economy better than others. Shoppers are "probably a little better off than everybody thinks, especially our consumer,” Alber, Mr.
Williams-Sonoma experienced a wide range of results last quarter. Pottery Barn revenues fell 7.5% over the past year, while West Elm revenue was down 3.5%. Williams Sonoma revenue was virtually flat. Pottery Barn Kids and Teen’s revenue rose 3.8%.
The stock of the company rose today after beating analyst expectations, reporting adjusted earnings-per-share of $1.96 instead $1.77.
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