| Aug 26, 2021 |
Williams-Sonoma gains in the high-end market. Is it coming for RH’s share?

On a conference call this week, San Francisco–based retailer Williams-Sonoma reported another quarter of outstanding financial results, with leadership mentioning that its higher end of home furnishings has been one of the company’s biggest “growth drivers.” Executives anticipate becoming a more substantial player in that category in the months and years to come.

Without providing too many details, the leaders said that its Williams-Sonoma Home brand, specifically, is competing in what they feel to be an “underserved” market. That’s a quick turnaround for the line, which repositioned itself earlier this year, per CEO Laura Alber, by bringing in a new executive to run the division and focusing more on its e-comm position. (While the nameplate no longer operates any free-standing physical locations, it has maintained a small footprint in some stores operated by its sister brands.)

Even those in-person retail efforts are being diminished. “Our strategy is to position the brand as a premium online business,” said Alber on the call. Without releasing any specific numbers, she said the unit was responding well to the change, especially in outdoor products, where the company “saw a triple-digit demand increase,” she noted.

The high-end home furnishing division was launched more than a decade ago, first as a catalog and then with a handful of stores, including a high-profile flagship on Beverly Boulevard in Los Angeles. Of course, the company’s timing could not have been worse—its initial wave of store openings was soon followed by the real estate crash and great recession of 2008 and 2009. Eventually, all the stores were shuttered, and the Williams-Sonoma Home brand carried on online and in print catalogs. While the small shop-within-shops started several years ago, the company now seems intent on growing the brand through online efforts.

In referencing the high-end (but still mass-market) home sector, it’s possible that Williams-Sonoma might be positioning itself to face off with the biggest retailer in the space: RH. The latter has also been putting up outstanding financial results for the past year, taking market share and expanding its footprint with more of its large-scale, gallery-format locations.

The stepped-up efforts of Williams-Sonoma Home might also be put into a certain context: In going up against RH (even if the company won’t publicly state such a goal), it will be competing with CEO Gary Friedman, the former president at Williams-Sonoma. He left the company some 20 years ago after being passed over for the CEO job, and went to Restoration Hardware—a struggling specialty operation that, at the time, was better known for its quirky homewares and mission-style furniture than for upper-end home furnishings. Friedman has spent the past two decades transforming the company into what is generally believed to be the largest upscale furniture and decor retailer in the country.

I’m sure everyone involved will say it’s just business. Nothing personal! And while that is no doubt true, the irony in all of this is just too obvious to ignore.

Correction: August 27, 2021
An earlier version of this story misstated Gary Friedman's role at Williams-Sonoma, Inc. before leaving the company to lead Restoration Hardware.

Homepage image: © John Mantell Photo/Adobe Stock

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Warren Shoulberg is the former editor in chief for several leading B2B publications. He has been a guest lecturer at the Columbia University Graduate School of Business; received honors from the International Furnishings and Design Association and the Fashion Institute of Technology; and been cited by The Wall Street Journal, The New York Times, The Washington Post, CNN and other media as a leading industry expert. His Retail Watch columns offer deep industry insights on major markets and product categories.

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