Williams-Sonoma (WSM) Partners REI Co-op, Boosts West Elm

Williams-Sonoma, Inc.’s WSM West Elm business announced a retail partnership with an outdoor specialty retailer, REI Co-op, to enable people feel at home while exploring outside. The REI x West Elm lifestyle products aim at maintaining their quality, and enable people enjoy the comforts of home outside, whether close to home or in the greater outdoors.

The REI Co-op x West Elm suite of products includes folding outdoor chairs, a portable shade shelter, bright reusable tableware, a collapsible campfire table, a double-sided outdoor blanket, abstract patterned outdoor pillows, and others. Notably, this co-curated catalog of 35 products is currently available on their respective websites.

Strong West Elm Business

Williams-Sonoma’s West Elm business has been strong over the last few quarters. This is evident from its 10th consecutive year of double-digit growth and another year of strong comps growth of 14.4% in fiscal 2019. The growth was primarily driven by strong e-commerce and broad-based strength across product categories, mostly in made-to-order upholstery, along with key customer acquisition categories of textiles and decorative accessory. Meanwhile, the emerging businesses — Rejuvenation and Mark and Graham — continue to expand product offerings.

The company aims at maximizing growth and boosting profitability in the long term via substantial growth engines. Moreover, it expects to generate more revenues from the e-commerce channel, as it focuses on re-platforming mobile sites to progressive web app technology, streamlining checkout process, and implementing the next-generation of machine learning, on-site search as well as personalization experience. It intends to focus more on growth drivers that include West Elm, newly launched Business-to-Business offering, the emerging brands — Williams Sonoma Home, Rejuvenation, and Mark and Graham — as well as its largest brand Pottery Barn and namesake brand Williams-Sonoma.

Share Price Performance

Shares of the company have gained 11.6% in the past three months compared with RH RH, At Home Group Inc. HOME and Haverty Furniture Companies, Inc.’s HVT 9.3%, 2% and 1.3% growth, respectively. However, the Retail - Home Furnishings industry has declined 6.9% in the said time frame.

Williams-Sonoma has a history of driving market share gains, supported by strong e-commerce websites, direct mail catalogs and retail stores, along with shipping fees received for the delivery of merchandise. The company is expected to generate strong revenues from the e-commerce channel on account of shutdowns to stop the spread of COVID-19.

Its innovative efforts helped the company drive e-commerce revenues to an all-time high of more than 56% of total revenues in fiscal 2019.

Zacks Rank

Williams-Sonoma currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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