In the same Jan. 12 press release in which it announced a 12% rise in holiday sales, Williams-Sonoma said it would phase out its Hold Everything brand. The San Francisco-based cataloger/retailer will shut its Hold Everything stores, catalog, and Website by the end of the year.
Specializing in home storage accessories and furniture, Hold Everything is appreciably smaller than Williams-Sonoma’s core brands, which include the titular kitchen products business and home furnishings powerhouse Pottery Barn. For instance, whereas at the end of fiscal 2004 the company had 254 Williams-Sonoma stores, 183 Pottery Barn stores, and 87 Pottery Barn Kids stores, it operated just nine Hold Everything stores.
The company expects to take an after-tax charge of $10 million-$12 million, most of it in the fourth quarter of fiscal 2005, as a result of the Hold Everything shutdown.
“Although there is significant growth potential in the merchandising categories offered in the Hold Everything brand,” Williams-Sonoma chairman Howard Lester said in a statement, “it is strategically and financially advantageous for us to capitalize on these opportunities by leveraging the marketing authority, multichannel expertise, and scale of our other brands, particularly Pottery Barn and West Elm. Based on this decision, we intend to immediately begin transitioning Hold Everything’s merchandising strategies into our other brands while we wind down our current Hold Everything retail and direct-to-customer operations.”
Williams-Sonoma had started rebranding Hold Everything in late 2004, expanding its Hold Everything merchandise line to include more furniture, lighting, and tabletop items, shifting it more toward a “lifestyle” brand than simply a merchant of home-organization and storage items. Still, Craig Battle, managing director of Princeton, NJ-based investment bank Tucker Alexander, says he was caught off guard by the company’s decision.
“I guess it underperformed, and some of the products overlapped with Pottery Barn,” Battle says. “They’re not afraid to go beyond their two [core] brands, but they have a pretty rigorous standard to which they measure it. When they become disenchanted, they move pretty swiftly.” It was disenchantment with its upscale bed and bath catalog Chambers that contributed to Williams-Sonoma’s decision to fold the title into its Williams-Sonoma Home spin-off in 2004.
As for Williams-Sonoma’s holiday sales, net revenue for the eight weeks ended Dec. 25 totaled $868.7 million, up from $775.9 million for the comparable period of 2004. Catalog and Web sales rose 16%, to $317.7 million from $272.9 million. Comparable store sales grew 4.5%.