Lifestyles Live Large Online

June 30, 2007  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on July 2007 Lifestyle retailers like Restoration Hardware and Crate & Barrel have always had a strong online presence that pulls together the distinctive look of their respective stores and catalogs.

In today’s fast-paced, Internet-driven world, many of the industry’s top lifestyles retailers are turning an even closer eye to the Web as a way to increase business.

Both Restoration Hardware and contemporary specialist Design Within Reach have said publicly that the Internet is a major component of their futures. The parent of Pottery Barn and West Elm, Williams-Sonoma, is also continuing the building of its online empire as it marches closer to hitting the $1-billion mark in online sales.

Here’s a snapshot of the most popular lifestyle retailers and the presence they hold on the Internet.

Crate & Barrel

Chicago

crateandbarrel.com

With more than 140 stores in 21 states, Chicago-based Crate & Barrel’s online presence continues to grow. The company conducts about a quarter of its sales throught its Web site. Published reports have revealed that the retailer’s online sales jump up by 10 percent each year.

In 2006, a BusinessWeek article focusing on majority shareholder Dr. Michael Otto of the Otto Group pegged the retailer’s sales at $1.2 billion with about a quarter of that total coming from online sales.

Design Within Reach

San Francisco

dwr.com

The contemporary specialist has had a challenging couple of years since its inital public offering in 2004 in which it raised $49.2 million. The bright spot for the retailer that has more than 60 storefronts in 25 states has been its online store.

For 2006, the company reported total net sales of $178.1 million. Of that total, the retailer’s online sales were $30 million, 16.8 percent of the total. In 2005, total sales $158.2 million, and online sales accounted for $29.2 million or 18.5 percent of the total.

Ray Brunner, president and chief executive officer, during a conference call on the retailers’ 2006 financials called the company’s Web site its “vehicle for future growth.”

“We believe the Web offers the greatest potential for long-term sales and profit growth,” he said. “The Web enables us to expose the customer to our full product assortment and is an effective vehicle for low-cost customer prospecting, penetrating new markets, testing new products, and building a DWR community.”

Brunner said the company has more than 600,000 subscribers to its online newsletter, up from approximately 375,000 at the end of 2005. Later this year, the retailer plans to post a new Web site that Brunner said will better serve the needs of the company’s customers.

In its 10-K filed with the Securities and Exchange Commission for 2006, the company said its success depends in part on its ability to market, advertise and sell its products through its Web site.

Restoration Hardware

Corte Madera, Calif.

restorationhardware.com

It’s hard to imagine that a vintage fixtures operation that started in a home could have grown to what Restoration Hardware has become today.

The retailer, with more than 100 stores in more than 30 states and Canada, announced earlier this year that it would shift its strategy to focus on its online and catalog business for future growth.

The retailer’s direct sales, which include online and catalog sales, were $244 million, or 34 percent of the company’s total sales of $712.8 million in 2006.

Gary Friedman, chief executive officer, said the company has no plans to open new stores this year and that the direct business will become the majority of the retailer’s business in the next three years.

Next year, Restoration Hardware plans to introduce Restoration Hardware Kids, focusing on a premium line of children’s home furnishings. The catalog and Web site are set to debut in the spring of 2008.

comScore Networks, a company that tracks Web site traffic, reports more than 580,000 unique visitors per month to the retailer’s Web site.

In addition to slating e-Commerce higher on the list of priorities, Restoration Hardware is also launching a series of new and highly-targeted direct marketing efforts. In August the company expects to unveil Brocade Home, a brand targeting a “broader value market.”

Williams-Sonoma Inc.

Sonoma, Calif.

williamssonoma.com,
westelm.com, potterybarn.com

The Williams-Sonoma family of brands, including the Pottery Barn group, West Elm and Williams-Sonoma Home, is pushing toward the $1 billion mark. For fiscal 2006, the company grew Web sales by 21 percent to $927.6 million from $766 million in 2005. For 2006, Williams-Sonoma posted net earnings of $208.9 million on revenue of $3.72 billion, compared to net earnings of $214.9 million on revenue of $3.53 billion in 2005.

Overall the web accounted for 25 percent of sales in 2006.

“Although our fourth quarter and fiscal year 2006 results were not where we expected them to be when we entered the year, we do believe they demonstrate our ability to aggressively react to a rapidly changing business climate and our commitment to optimize profitability, even in difficult times,” said Howard Lester, Williams-Sonoma chairman and chief executive officer.

According to the company’s financial filings, its direct-to-customer net revenues, made up of catalog and Internet sales, jumped 4.5 percent to $1.574 billion compared to $1.506 billion in fiscal 2006.

The increase was attributed to jumps in net revenues generated in the Pottery Barn Kids, Pottery Barn, PBteen, Williams-Sonoma and West Elm brands.

The company said breaking out its Internet revenues isn’t precise, but it does estimate that about 45 percent of its companywide, non-gift registry Internet revenue is generated online. About 55 percent of the sales are

driven by customers who recently received a catalog.