Williams-Sonoma earnings down 27 percent
Williams-Sonoma saw net revenue increase 4.1 percent in the second quarter to $859.4 million from $825.5 million in last year’s second quarter.
Second-quarter earnings fell 27 percent after the company made major price reductions on products at Pottery Barn stores. Earnings were $26 million in the second quarter, compared with $35.6 million last year.
Pottery Barn saw comparable-store sales rise 1.8 percent in the second quarter. The high-end home decor chain had sputtered in recent quarters, including in last year’s second quarter when comparable-store sales fell 0.2 percent.
“What was particularly encouraging about these results was the strong performance of our emerging brands and the improving trend we saw in Pottery Barn, which we believe was driven by early successes in the rollout of our Pottery Barn revitalization initiatives,” said Howard Lester, chairman and CEO of Williams-Sonoma. Lester said the second-quarter results were “better than expected.”
In its other retail concepts, comp-store sales rose 1.1 percent at kitchen products retailer Williams-Sonoma and 9 percent at the company’s outlet stores. Comp-store sales fell 3.8 percent at Pottery Barn Kids stores.
Williams-Sonoma’s strong catalog and e-commerce sectors showed further growth, with a 2.8 percent increase in direct-to-customer net revenue, to $372.4 million from $362.2 million last year. Internet revenue increased 11.1 percent to $237.4 million compared with $213.8 million last year.
Williams-Sonoma operates 580 stores under the banners Williams-Sonoma, Pottery Barn, West Elm, Pottery Barn Kids, PBteen, West Elm and Williams-Sonoma Home. The company also has seven mail order catalogs and six e-commerce Web sites.
Fraser announces mill shutdown
Toronto-based wood pulp company Fraser Papers has announced the closure of a Juniper, New Brunswick-based mill that manufactures pulp-based supplies and lumber products for home builders.
The company will shut down the mill for up to 11 months starting Oct. 5. Fraser cited a weak housing market in the United States, continued oversupply of lumber and a strong Canadian dollar for contributing to Ounsustainable operating losses at the mill.O
In addition, reduced logging activity in recent months has significantly reduced the supply of wood from private lands,O the company said in a statement.
“Despite significant efforts by our employees to minimize costs and improve operations, we have been absorbing significant cash losses at our Juniper sawmill,” said Peter Gordon, president and CEO of Fraser Papers
Fraser said it expects tough market conditions will persist into 2008. The shutdown will impact approximately 175 employees at the mill.
Home Depot holds grand opening in China
Home Depot’s long-awaited entry into China became official Aug. 26 with grand opening festivities at rebranded stores in six locations. The former Home Way units, purchased in December 2006, were remodeled and remerchandised, according to the Atlanta-based retailer. Sales associates also received additional training over the past eight months.
Altogether, Home Depot will operate 12 stores in six cities: Tianjin, Beijing, Xi’an, Qingdao, Shenyang and Zhengzhou.
Annette Verschuren, president of Home Depot Asia and Canada, presided over inaugural ceremonies in Beijing. Also on hand was Yves Chen, president of Home Depot China.