Williams-Sonoma Inc. will close its Hold Everything brand by the end of the year and fold it into its other brands, the firm said today.
The announcement came as the company posted a 12% increase in net revenue to $868.7 million for the eight-week holiday period that ended Dec. 25, 2005, compared with the same span in 2004. Contributing to the increase was a 16.4% jump in direct marketing revenue to $316.7 million.
Hold Everything, a marketer of storage and other home products, is comprised of 11 retail stores and a DM unit that reportedly mails over 27 million catalogs a year. The brand has 156,860 one-year buyers on its list, with a unit of sale of $175, according to a Specialists data card.
Williams-Sonoma expects to incur a charge of between $10 million and $12 million for lease-termination costs for the Hold Everything stores, employee severance, the write-off of the brand’s Web site costs and inventory impairment charges, the firm said. The charge will hit primarily in the fourth quarter of fiscal 2005 and the remainder in the first two quarters of fiscal 2006.
Chairman Howard Lester said in a statement that the company found it “strategically and financially advantageous” to leverage its other brands, like Pottery Barn and West Elm.
A spokesperson declined to reveal how many jobs would be lost.
Meanwhile, the firm said its holiday direct marketing growth was mostly driven by the Pottery Barn, Pottery Barn Kids, Pbteen and William-Sonoma home-product brands, but not by Hold Everything.
Comparable store sales increased by 4.5% during the period.
The company projected net revenue of up to $1.22 billion for its 2005 fourth quarter, an increase over its prior forecast. As previously predicted, direct marketing sales are expected to range between $457 million and $464 million.
Annual 2005 revenue is projected to hit between $3.53 billion and $3.55 billion, including up to $1.51 billion in direct marketing revenue. This was in line with a previous guidance. Catalog circulation is projected to increase between 4.5% and 5%.
Despite the strong holiday sales, the San Francisco-based firm maintains “a conservative outlook,” due to the fact that 29% of its fourth-quarter sales and 40% of its catalog volume occur in January, CEO Ed Mueller said in a statement.
“We also continue to be cautious about intermittent postal service delays, which are continuing in the month of January and negatively impacting the in-home delivery dates of our catalogs,” Mueller added.
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