Will home furnishings soon be a ‘digital-first business’?
Williams-Sonoma is working to rationalize its store base while TJX Cos. is adding e-commerce to its Homegoods website as home category purchases continue to move online during the pandemic.
Williams Sonoma, which operated 614 stores largely across the Williams Sonoma, Pottery Barn and West Elm banners at the end of its third quarter, announced last week plans to close approximately 40 stores this year with more planned in the years ahead.
“We have half of our leases coming up for renewal in the next three years, and we’ll be looking at each lease and keep only those stores where the economics of the deal makes sense and where they are brand enhancing,” said Julie Whalen, CFO, on its quarterly conference call. “Stores continue to be a competitive advantage as people like to see merchandise in-person. However, we are anticipating a future with fewer, better, more profitable stores.”
Laura Alber, president and CEO, added that, while the furniture and home décor sector has benefited from stay-at-home trends, the “bigger” pre-pandemic trend has been the industry consolidation away from brick-and-mortar. Williams-Sonoma’s online penetration had already grown to 56 percent of sales and is expected to reach “upwards of 70 percent” post-pandemic.
“We’ve been investing in e-commerce for so long that our platform is able to hold a lot more volume without these huge step-up investments that other retailers who’ve had only 10 percent to 20 percent took time to invest. So we fully see ourselves in the digital-first business with great stores, more profitable stores than ever,” she said.
TJX announced plans to launch a HomeGoods e-commerce platform after the chain belted out a 15 percent third-quarter comp gain.
A HomeGoods e-commerce platform, TJX’s CEO Ernie Herrman told analysts, would “satisfy our customer base and attract new shoppers.” He still felt the majority of market share gains in the home category will come from the accelerated expansion of Homegoods locations over the next five years.
“Not everybody wants to buy their apparel even online,” Mr. Herrman said. “They don’t always want to buy a sofa, a chair, an accessory item. They want to feel the fabric.”
- Williams-Sonoma, Inc. announces third quarter 2020 results – Williams-Sonoma
- Williams-Sonoma (WSM) Q3 2020 Earnings Call Transcript – The Motley Fool
- Williams Sonoma Inc.: The future is fewer, better stores – Home Textiles Today
- The TJX Companies, Inc. Reports Q3 FY21 Results – TJX Companies
- TJX Companies Inc. (TJX) Q3 2021 Earnings Call Transcript – Alpha Street
DISCUSSION QUESTIONS: Will home furnishings and décor purchases significantly shift online post-pandemic? Are stores any more or less important in supporting purchasing decisions around home goods versus apparel and other categories?