More store closings

From the OC Register:


Well-known home retailer to close more stores
March 22nd, 2010, 8:07 am · 12 Comments · posted by HANG NGUYEN, RETAIL REPORTER

Williams-Sonoma Inc., which also owns Pottery Barn and Pottery Barn Kids, said it will close more stores.

Here’s an excerpt from its recent Bank of America Merrill Lynch 2010 consumer conference:

Pat Connolly, executive vice president: We are committed to restoring our retail channel profitability to historical levels … We are working diligently to restructure our portfolio of stores and optimize our sales and costs per square foot. This will be accomplished by selective store closings and lease negotiations … Over the next three fiscal years, 25 percent of our store leases will reach maturity … E-commerce is 30 percent of our corporate revenue and it’s very profitable … even in this environoment. The Internet and e-commerce have become the focus of our capital investment.

Sharon McCollam, chief operating officer and chief financial officer: Every quarter last year, we increased the number of stores that we plan to close … If we could get the deals (with landlords) done, we would not necessarily want to close stores if you could get to the profitability levels you were historically. Our objective is not store closings per se. However, we don’t believe that that is a strategy that can be executed. So there will be additional store closings … We are retaining about 50 percent of the sales in the first year after we are closing these stores in a dense multi-store market. Of that 50 percent, about a third of it is going to the Internet, to the direct channel … we have very very few negative cash flow stores. That is not our issue. Our issue is that it’s not up to its historic profitability…

The company plans to close stores in dense multi-store markets, probably where it has three or more stores. These dense markets for Williams-Sonoma Inc. include New York, Chicago, Atlanta, Dallas, Southern California, Northern California, Denver and Arizona. During the conference, the company did not say how many more stores it will close.

Williams-Sonoma could not be reached for further explanation.