Williams-Sonoma’s Home Cooking Visionary
By Tom Ryan
Williams-Sonoma’s longtime chairman and CEO Howard Lester, who
saw an opportunity in home cooking aficionados before many others, passed away
last week at the age of 75.
In his first career, Mr. Lester founded and sold
two software businesses to become rich enough to retire at a young age and
focus on his golf hobby. In 1978, at the age of 41, he grew restless and acquired
Williams-Sonoma, which at the time had four stores in San Francisco and Beverly
Hills with annual sales of $4 million. Today, the company has 609 stores, seven
direct-mail catalogs and annual sales of $3.4 billion. Pottery Barn, acquired
from Gap Inc. in 1986, is now its largest division. It also operates Williams-Sonoma
Home, Pottery Barn Kids, PBteen and West Elm.
At the time of the purchase, the
four stores, specializing in items for gourmet kitchens, were popular with
local chefs and home-cooking enthusiasts, but failing. Founder Chuck Williams
stayed on as the company’s merchant but Mr. Lester’s business smarts quickly
turned the business around. By 1983, an initial public offering was completed.
"Howard was a shopkeeper at heart," said Mr. Williams in a statement
from Williams-Sonoma.
After taking charge, Mr. Lester initially focused on the
catalog business but soon began expanding Williams-Sonoma’s stores, which were
designed to resemble a French cottage. The business particularly capitalized
on a boom in cooking as a hobby.
"Chuck, when he started it, did it out of love," Mr. Lester told
the San
Francisco Chronicle in a 2004 interview, according to an obituary in
the Los
Angeles Times. "He loved to cook. Williams has a magnificent eye
and curiosity. He has incredible taste and created this wonderful little
store. … After about a year, I think I started to see that there was
much more here. There was a craze of cooking. We started to see that we
could build a national brand for the upscale customer."
According to an obituary
in The New York Times, Mr. Lester’s "grand
vision" developed in the eighties was to position Williams-Sonoma as
an "aspirational
store" for baby boomers "eager for a more luxurious, creative way
of life."
Tapping the software expertise of his former career, Mr. Lester
also developed a sophisticated database of 4.5 million customers.
"With a few keystrokes," Forbes reported in 1991, "the
company can tell you what you’ve bought from each of its five catalogs
(an estimated 60 percent of customers have bought from more than one), what
time of the year you tend to buy, what category of merchandise you lean toward,
and so on and so forth."
But Mr. Lester still believed product was critical.
Asked in the 2004 Chronicle interview
whether Williams-Sonoma would ever run out of ideas for new cookware items,
he said, "People replace old things, and it’s amazing how you can sell
food processors and KitchenAids in a dozen different colors and toasters in
different colors. I have great faith in the American consumer to continue to
buy."
Discussion Questions: What’s been the key to Williams-Sonoma’s success? How
has the company managed to capitalize on the home cooking boom seemingly so much
better than other retailers?
- W. Howard Lester, Chairman Emeritus of Williams-Sonoma, Inc. Dies at
Age 75 – Williams-Sonoma - W. Howard Lester, Williams-Sonoma Owner, Dies at 75 – The New York
Times - His Wares Brought Luxury to the Kitchen – The Wall Street Journal
- W. Howard Lester dies at 75; former chairman of Williams-Sonoma – Los Angeles
Times
The key to WS success is pretty straightforward. Howard took a simply stated vision–“an aspirational store” for baby boomers who were interested in luxury and creativity and then executed it brilliantly. His passion for the content, in this case cooking, never wavered, nor did he ever lose respect for the brand he and Chuck Williams created. WS never, ever, competed on price nor sacrificed quality to drive incremental volume (like so many other retailers). While this cost them business at times, it also ensured enduring loyalty from their customers and positioned their brand as the very best in its category–an “aspirational store” on many levels. The industry could certainly use a lot more Howard Lesters.
Walmart may get a lot of attention in these tough economic times but the market for quality-focused “price is no object” goods has grown steadily in recent decades and never been stronger. It should also be noted that after a brief pause at the beginning of the great recession, the luxury goods industry has exceeded all expectations.
Williams-Sonoma has helped to turn home cooking into a hobby and art form for average people. In turn Williams-Sonoma has made home-cooking products a more enterprising business with higher margins and more profitability than it would otherwise be.
I know this is a bit off topic, but I personally think Howard Lester was a brilliant and almost unappreciated retailer. Three things about Howard Lester stand out to me.
1. He was a pioneer in using customer information to target marketing. As the New York Times reported in his obituary, “Drawing on his experience of developing computer software for banks, Mr. Lester developed a highly sophisticated database of 4.5 million customers to track 150 pieces of information per customer.” He got it before most other retailers, and it also enabled them to build other brands besides Williams-Sonoma.
2. He lived that retail is detail. The stores were impeccable, the managers were expected to manage payroll down to the penny, and their window and front displays were and continue to be some of the best.
3. He was smart enough to keep Chuck Williams as the chairman at the spokesperson for the brand. A man with a bigger ego would have pushed Chuck aside, but Howard understood how important Chuck’s vision and knowledge was to the company.
Williams-Sonoma was there selling gourmet and other cooking wares before The Food Channel took off to the heights it is now. Between the two of them they have found and created a market for selling the quality cookwares and building the interest in cooking to new limits. They, combined, have not begun to reach their potential for sales and marketing. Both profit from the other.
When many retailers were going down in merchandise quality (good, better & best), Williams-Somona was improving their quality. For real cooks, they become the only retailer with the quality they wanted in their kitchen. Additionally, their range made them the go to retailers for that hard-to-find item. The consumers’ only other option was a commercial equipment supplier which might have the item but not everyone is cooking for 100 people.
Williams-Somona really appealed to the weekend gourmet. These are consumers that eat-out or do take-out most days of the week but entertain on the weekend. Their guests were drawn to Williams-Somona for presents. What they proved is there is a consumer who wants quality products.
Williams-Sonoma knows their core customers extremely well and continues to delight them with products and service. For true cooks, WS is the place to find all the equipment and special ingredients supported by great customer service. Entertaining with at-home dinner parties is how many busy folks enjoy their weekends–WS is their destination store.
Howard is a retail legend. The achievements under his leadership range from building iconic brands to creating the much-followed concept of an aspirational lifestyle store to developing modern direct mail catalog retailing. He is clearly loved by folks who worked for him and in the city of San Francisco. All in all, what an impressive and inspirational life and legacy.
My family tells me I have enough stuff for two kitchens. They may be right, but I don’t care. I buy and use lots of cooking gizmos, and Williams-Sonoma is my drug of choice. “Hi, I’m Doc, and I’m a kitchen equipment addict.” Williams-Sonoma stumbled across me and millions of others like me and the rest is history. They found and mined a rich vein of cooks with upscale tastes. Contrary to the speculations of some, W-S did not create the market for top quality kitchen supplies – they just discovered it. Which turned out to be enough.
My family reminds me that there is a difference between kitchen equipment and kitchen gadgets, and chide me when I spring for a product that is obviously gadgety. It’s kind of recreational for me, but they’re right. And therein resides a truth which W-S must keep in the forefront of their merchandising. While W-S offers a few gadgets, the bulk of their offering must remain legitimate, high-quality cookware in a buzillion colors and sizes.
People (here) seem to have nothing but praise for Mr. Lester…and I’m not going to spoil the fun: obviously he did everything right (and then some). Still, I’m drawn to two related lines: “The business particularly capitalized on a boom in cooking as a hobby… There was a craze of cooking.” In a different time and place, would he have sought out whatever was hot and achieved similar success with a different product, or would the story have been that he grew WS into a nice little 8 store/$10M a year business? We’ll never know; but such is the meaning of serendipity.
Williams-Sonoma’s success is the result of their unique offerings and customer service. I, for one, have purchased their $25 bagel slicer as a gift for numerous friends, and then purchased it for myself. The quality is exquisite and I think it will last forever.